Incorporating sustainability in business strategies is no longer an option today. Sustainability initiatives contribute to an organization’s overall success.
Sustainability has become more of a strategic and operational imperative. It is important that executives must lead the way to set up a sustainability organization that’s right for their companies.
Sustainability strategies might feel like a short-term investment, but it leads to long-term benefits. Studies have proven that most sustainable companies are also the most profitable ones.
What is sustainability in terms of business?
Sustainability in business means to operate a business without any negative impacts on the environment, community, or society.
More companies, and their investors, are recognizing sustainability as a strategic priority that involves significant business risks and opportunities. But historically, few companies have organizational structures that are designed to treat sustainability as a material business issue. Instead, sustainability activities—and the organizations that support them—have focused primarily on investor relations, PR, and corporate social responsibility.
The goal of a sustainable business strategy is to impact the environment or society positively. They ensure that their short-term profits don’t affect the long-term operations of the business.
Businesses usually pick up a global challenge and address it at organizational levels with their initiatives to create a positive impact.
What are the benefits of sustainability in business?
To get sustainability programs right, companies have big decisions to make.
To start, they should choose which issues under the broader sustainability umbrella should be the responsibility of their sustainability organizations and which issues should be left to other parts of their businesses.
The issues range widely, from building new low-carbon businesses and commercializing green products to managing environmental compliance and ESG reporting more proactively.
As companies mobilize to respond to increasing sustainability concerns, many have struggled with the differences between sustainability and other business issues in the trade-offs involved, decision-making and governance processes, and even employee and leader mindsets.
Examples of Sustainability in Business
- Unilever committed in 2008 to use palm oils from only certified sustainable sources for its packaged products. It led to industry-wide adoption of sustainable palm oil, and Unilever could thrive and reap the benefits of contributing to reducing palm oil’s greenhouse emissions.
- PepsiCo is about three aspects:
- Human sustainability – Promoting healthy food and beverages by reducing added sugar and fat in products,
- Environmental sustainability – Minimizing footprint and protecting resources by designing 100% recyclable packaging and reducing 50% waste,
- Talent sustainability – Attracting top talent and creating a diverse culture through advanced respect for human rights.
How to create a sustainable business strategy?
According to Euromonitor, there are five steps to create and build a sustainable business strategy:
- Create a business case that focuses on connecting sustainability initiatives and business benefits to engage senior leaders in sustainability.
- Assess and prioritize risks and opportunities across various markets because every industry has its challenges and opportunities. This step also helps to protect brand reputation.
- Set targets and work in partnerships with key stakeholders – NGOs, governments, suppliers, retailers, etc.
- Select the right metrics to measure the success of the sustainability initiative and keep the strategy on track.
- Finally, communicate the results and learnings with internal and external stakeholders to increase transparency and build credibility and trust in the brand.
Sustainability doesn’t mean sacrificing or reducing profits. A business without a sustainable business strategy is less successful in profitability, growth, employee retention, etc.
Many company websites these days have also included a separate section exclusively to update their sustainability initiatives. Global companies are also launching powerful messages and slogans to create awareness and build a more sustainable future.