Today’s business landscape requires organizations across all industries to prioritize sustainability. Strategic sustainability initiatives and practices should be designed to reduce and prevent negative environmental and social impact. Sustainability in business requires organizational leaders to acknowledge the shift in consumer and inventory expectations, address environmental concerns and acknowledge the fact that sustainability can drive innovation, efficiency and long-term profitability.
What Is Sustainability in Business? Beyond “Going Green”
Sustainability in business is commonly associated with eco-friendly efforts, but it’s important to recognize that sustainability in business goes beyond reducing the adverse environmental impact of the organization. IBM defines sustainability in business as an organization’s overall strategy to reduce not only negative environmental impact, but also adverse social impact as a result of the company’s actions and operations. Sustainability in business can be measured using ESG factors, which are defined as Environmental, Social and Governance metrics, highlighting the importance of data collection and analysis in achieving sustainability for business.
Why Is Sustainability Important in Business?
As professionals across all industries learn to grapple with the significant impact of climate change and the social changes reshaping society, sustainability in business has never been more crucial. According to Adobe, sustainability in business is essential because:
- Sustainable practices help an organization reduce its carbon footprint and conserve non-renewable resources.
- Sustainability initiatives can help ensure the long-term success of the organization.
- Sustainable practices can improve the reputation and brand image of an organization, which can increase profits and help attract top talent in the field.
The Three Pillars of Sustainability
Within corporate sustainability, there are three distinct pillars that anchor all sustainable initiatives. The three pillars of sustainability in business are environmental, social and governance. Together, these three pillars interact to create a framework for sustainable business practices.
- Environmental: In many ways, the environmental pillar anchors all corporate sustainability efforts, as these practices are often in the spotlight. The environmental pillar of sustainability focuses on reducing the overall carbon footprint of the organization through resource conservation, waste reduction, pollution prevention and the adoption of renewable energy resources.
- Social: Closely tied to the concept of social license, the social pillar of sustainability focuses on the organization’s stakeholders. The goal of social sustainability is to gain the overall support of employees, investors and the community at large. This pillar prioritizes the fair treatment of workers, community engagement efforts, ethical sourcing and respect for human rights throughout the supply chain.
- Governance: The governance pillar of sustainability aims to balance the profitability of the company with its overall governance, creating actionable solutions that fuel long-term success while promoting fair and transparent governance. This pillar prioritizes ethical decision-making, strong corporate governance structures and accountability to stakeholders.
Why Sustainability Benefits Your Business
Sustainability in business is essential to competing in today’s complex business landscape, as both consumers and investors expect companies to prioritize the overall ethical impact of their business. However, organizational leaders will find that sustainability for business can actually be quite beneficial, both in the short- and long-term.
Sustainability in business can help an organization:
- Attract and Retain Talent: An increasing number of professionals today identify as purpose-driven employees interested in working for organizations that prioritize sustainability in business. By highlighting the positive social and environmental impact of your organization, you will be more likely to attract and retain top talent in your industry.
- Enhance Brand Reputation: More than half of consumers today intentionally choose to interact with organizations that prioritize sustainability. By building a positive brand image associated with responsible practices, you will be able to improve your brand reputation and drive profits.
- Reduce Costs and Increase Efficiency: Sustainability efforts can also help you improve operational efficiency. By identifying opportunities for resource conservation and waste reduction, you can achieve cost savings and improved efficiency overall.
- Mitigate Risk: Sustainability for business is often a forward-thinking process that allows you to prioritize risk assessment. Through these efforts, you can create a risk mitigation strategy that helps you prepare for future regulatory changes and shifting consumer demands.
- Drive Innovation: Creativity is required to develop and implement sustainability solutions, and through these efforts, you can foster a culture of innovation as you work with your team to create new solutions for environmental and social changes.
How to Implement Sustainable Business Practices: A Practical Guide
Fortunately, creating, developing and implementing sustainable business practices are challenging, but very possible to implement. In fact, there are many new and exciting ways to incorporate sustainability into your business operations.
These steps and strategies can help you prioritize sustainability and improve your overall ESG metrics, ultimately allowing your organization to realize the full benefits of sustainability in business.
Conduct a Sustainability Audit
Sometimes referred to as a Corporate Social Responsibility audit or an ESG audit, sustainability audits are critical to effectively implementing any sustainability initiative in your organization. Sustainability audits are an assessment that evaluates the overall performance of any sustainability practice at an organization.
When a sustainability audit is performed, several internal and external factors are analyzed, such as:
- The organization’s overall carbon footprint
- Water usage at the organization
- Energy expenditures at the organization
- Impact of social responsibility practices
Organizations that opt to conduct a sustainability audit can rely on key metrics and benchmarks to evaluate their current progress and refine their sustainability initiatives to make a more significant impact in the months and years ahead.
Set Clear Goals and Targets
To fully realize the benefits of sustainability practices, your organization will need to set clear goals and targets. One of the best ways to set goals for sustainability in business is to use the SMART goal strategy.
SMART goals are those that are Specific, Measurable, Achievable, Relevant and Time-bound. You can set SMART goals for sustainability in business by:
- Establishing a long-term vision for what sustainability looks like at your organization.
- Dividing the vision into smaller, achievable objectives related to the three pillars of sustainability.
- Identifying indicators, metrics and targets to reach.
- Delegating assignments, tasks and responsibilities to team members and employees.
- Establishing deadlines for reaching sustainability targets.
- Conducting sustainability audits along the way to measure performance and results.
As you work to identify SMART sustainability goals for your organization, you will want to verify that your goals for sustainability in business align with the company’s overall mission and values.
Engage Employees and Stakeholders
Given the fact that a primary pillar of sustainability is governance, it’s important to engage both employees and stakeholders in the organization’s sustainability journey.
You can work to engage employees and stakeholders by:
- Engaging in collaborative dialogue about the areas of sustainability where the organization can have the most impact, setting the stage for the fact that your sustainability initiatives and practices will be a community effort.
- Collecting data related to current environmental and social impact and providing transparent information about the data to the community at large.
- Openly sharing the sustainability frameworks that you intend to put in place and soliciting feedback about those frameworks.
- Establishing short-term and long-term sustainability goals, allowing both employees and stakeholders to feel invested in the process.
Through open communication and transparency, you can create a collaborative culture that fosters sustainable change in your organization both in the near-term and long-term.
Integrate Sustainability Into Business Strategy
One of the most common mistakes that organizational leaders make when it comes to developing and implementing sustainability initiatives is that they separate these initiatives from the overall business strategy, creating a separate sustainability entity. Rather than keeping sustainability as an effort being conducted on the side, leaders should work to integrate sustainability into the overall business strategy. The process can be overwhelming and daunting, but Deloitte notes that you can successfully integrate sustainability into business strategy by:
- Investing in data collection efforts.
- Prioritizing transparency and accountability in governance.
- Engaging in stakeholder dialogue.
- Developing a collaborative strategic plan designed with all employees and stakeholders in mind.
Maintaining Sustainability: A Continuous Journey
Developing and implementing sustainability practices is not a one-off task. To maintain sustainability over time, your organization will need to make a commitment to ongoing sustainability efforts. As consumer demands and investor expectations shift and grow over time, you will need to work to continuously improve and redefine your organization’s sustainability efforts.
These are the steps that you can take to maintain sustainability over the course of the long-term:
Monitor and Measure Progress
Establishing sustainability goals and creating sustainability practices is only the first step in achieving true sustainability in business. To fully realize the potential of your initiatives, you and your organization must be committed to monitoring and evaluating your sustainability performance.
Your organization should utilize a variety of ESG metrics and other Key Performance Indicators (KPIs) to monitor and measure progress. Continuously evaluating your sustainability progress allows you to:
- Increase transparency about sustainability efforts at your organization.
- Perform effective risk mitigation.
- Always maintain regulatory compliance.
- Achieve the competitive advantage in your field.
In addition, monitoring and measuring your progress allows you to identify areas where your sustainability efforts can improve and adapt your strategies as needed to enjoy the full benefits of sustainability in business.
Embrace Innovation and Adaptation
Sustainability trends are expected to evolve over time, particularly as the impact of climate change is realized, and social change continues to demand more from businesses across all industries. Even once you have developed and implemented sustainability practices for your business, you will need to be willing to embrace innovation and adapt accordingly.
Environmental Resources Management notes that these are some of the up-and-coming sustainability trends in business:
- Increased need for decarbonization.
- Improved human capital strategies.
- Heightened demand for sustainability disclosures.
- Increased need to build a resilient and sustainable supply chain.
Evolving with the times and staying ahead of sustainability trends can help you maintain the competitive advantage in your organization and have the most impact across all three pillars of sustainability.
Expand Your Business Knowledge at Johnson & Wales University
At Johnson & Wales University, we offer an online bachelor’s in Business Administration as well as an online MBA program. The undergraduate program offers a solid foundation in core business disciplines, including accounting, economics, information technology, business law, finance, marketing, and management. Graduates will emerge with a well-rounded understanding of business operations, which can be applied to any industry.
The MBA program takes this further, developing critical thinking and analytical skills through a business lens, enabling graduates to solve complex problems and make strategic decisions.
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