Sustainability, what is it good for?
A lot, actually.
In terms of your business, the more sustainable you are the more you can not only help the Earth but also build towards a more robust and profitable future.
In our current global situation, it’s increasingly important to pay attention to how your business is sustainable and what it means for your operations and bottom line going forward.
10 things sustainability means for business
Sustainability is all about reducing the environmental footprint of a business and making its processes more efficient, profitable and suitable for the long term.
“Sustainability in business refers to a company’s strategy to reduce negative environmental impact resulting from their operations in a particular market.”
1) Being better for the environment
Among the top things sustainability means for business is being better for the environment.
In other words, less pollution, less carbon emissions, less plastic and packaging waste, using renewable sources of energy and producing more biodegradable and eco-friendly products or services.
Large companies, including Walmart, for example, have promised to reach net zero carbon emissions by the year 2040, and it’s increasingly an integral part of marketing as well as corporate policy.
Ikea, Nestle and H&M as well as various other companies are also increasingly onboard with the zero net emissions goal.
Being better for the environment is increasingly something that consumers and clients also expect when they do business with an organization.
2) Being better for society
Another of the things sustainability means for business is being better for society as a whole.
This can sometimes mean thinking more of the long-term vision for a business rather than just short-term profits.
For example, looking at a very successful business like Whole Foods, you can see how the CEO built it up on a more sustainable model with healthy organic foods based on the starting idea of a CSA (community supported agriculture).
Although it started small without the short term profits of some businesses selling junk food or liquor, Whole Foods is now one of the healthiest and most profitable businesses in America.
This is an example of what being good for society and being more sustainable can look like, because ultimately providing a healthier product or service also leads to a healthier population, which means more happy consumers to buy or use what you make.
3) Energy is changing
Many of the changes in industry and other sectors are being pushed by changes in how energy is generated and used, particularly as fossil fuels are regulated and diminished through government regulation.
Solar energy and wind energy are growing, as are other promising areas like geothermal.
As the types of energy businesses and societies rely on change, so will the ways that businesses operate and make money.
This is especially true in countries like the United States or EU nations, where carbon emissions are increasingly subject to regulation.
The idea of carbon pricing has been controversial and not always worked well due to scammers rigging the markets, but the basic fact that emissions are going to be under more and more scrutiny going forward is indisputable.
4) Action over advertising
Many companies try to get away with “greenwashing,” which is using the branding of going green and related things without having to change much about the way they actually operate.
This can work well to boost the bottom line, but people have also caught on to it and are learning not to fall for flashy labels and fake environmentalism.
Advertising focusing on being green is one thing, but you also have to think about how green a company really is if they’re using large chunks of their money to say how green they are.
Why not use that money to upgrade facilities, make new and more sustainable partnerships and do things in new and better ways?
5) Business sustainability is external and internal
One of the most important things sustainability means for business is a dual-pronged approach.
It’s not just about becoming greener in practices, production and services that are offered.
It’s also about running the actual business internally in a more sustainable way.
The good news is this also puts up profits.
For example, say you run a large department store and are deciding which kind of lights to install.
Using sustainable and long-lasting CFL lights is not only more sustainable for the environment and lessening pollution, it will also save you a lot of money on buying new lights and on the work hours for installing new lights when they burn out.
These are all things to think about!
Writing for Switzerland’s International Institute for Management Development, Professor Knut Haanaes with Natalia Olynec explain that:
“Paying attention to environmental, social, and governance (ESG) issues is becoming increasingly critical for all companies across all industries…
“…Simply put, sustainability is a business approach to creating long-term value by taking into consideration how a given organization operates in the ecological, social, and economic environments.”
6) Aligning profitability with responsibility
The most important things sustainability means for business are all about aligning profitability with responsibility.
On the practical side this means putting more into infrastructure, technology and new ways of doing things instead of always taking the shortest route.
This includes working toward a better society as I mentioned earlier, as well as giving money to community initiatives, supporting projects the company finds worthwhile and being a party of the area you’re located in.
Sustainability isn’t only about how you produce your goods and services and get them to people, it’s also about how a business establishes its relationship with the community it’s in.
Is the business part of building a long-term happy, healthy place to live? Or is it just there for a quick profit or as a source of quick, offshore labor?
7) Transparency matters
Another one of the things sustainability means for business is being transparent.
Telling stakeholders, partners and customers or clients about your steps in becoming more energy efficient and eco-friendly is all a part of building momentum and progress.
For example, if you have a data center you can use free cooling, which is a pricey but renewable cooling technology that you can install instead of energy-intensive ventilation systems.
You can also try carbon offset strategies where carbon your business produces is offset by investments and donations you make to other initiatives that reduce or capture carbon.
8) Access to new investors
Investors are always looking for new opportunities and they are increasingly drawn to innovation and forward-thinking in the business sphere.
This is particularly so with regards to sustainability and certain banks and credit unions will even recommend ethical funds and certain companies which have more eco-friendly practices and standards.
Working sustainability into a business’ mission statement and business model isn’t always easy, but starting with small steps you can begin to make a big difference.
On the large side, companies are able to do a lot with sustainability.
Take Unilever, for example, which runs Ben & Jerry’s, Dove cosmetics, Axe deodorant and many more products.
They put in a project to be more sustainable over the next ten years and increase pay and benefits for workers in 2010.
By 2020 they had saved over $1 billion Euros in cost due to greener practices like cutting down on water and energy waste and overuse.
9) Coming up with alternatives
Neste is a company located in Finland which is working on new types of fuel and alternatives to things like plastic.
They recently partnered up with Marathon Petroleum to create and design a renewable fuel with global scope.
Other companies like Orsted in Denmark have also sought energy alternatives, working to divest investments out of coal power and put them into wind.
The airline JetBlue is also very committed to carbon offset which I talked about earlier, portioning money to initiatives such as reforestation for all the carbon it uses.
H&M is only going to use recycled materials for 30% of all its products by 2025 and 100% will be recycled or “highly sustainable” by 2030.
This kind of corporate responsibility and coming up with alternatives is very crucial for the kinds of ideas and things sustainability means for business.
10) The bottom line
Sustainability is all about making a win-win situation where a business can prosper while still serving as a responsible steward of the environment and its patrons.
By creating more sustainable businesses, we help work toward a world that’s less clogged with plastic pollution, air pollution, toxic soil and polluted water.
Every little bit counts, and the more that businesses start caring about sustainability the more that we’ll see real changes start to take place.
The new business reality
Being eco-friendly and thinking about sustainability is a part of the new business reality in most developed nations.
Companies which show forward thinking and initiative in cleaner energy and practices are surging forward, while dinosaurs are being left behind.
The industrial world is still run on fossil fuels, but that’s slowly but surely changing. And as it picks up pace, every business is going to change in accord.
Might as well get ahead of the curve!