Sustainability shouldn’t be just another trending marketing strategy for businesses trying to gain an advantage over their closest competitors. Instead, it should be a long-term commitment to large-scale change that effectively and efficiently reduces harmful industry impacts on the natural world.
From implementing green business strategies, such as eco-friendly packaging solutions, ethical sourcing, and lowering harmful environmental impacts, to supporting the global shift in the retail and manufacturing industries towards more beneficial operations, there are many ways a company of any size can adopt sustainable practices to improve its brand reputation and financial growth.
What is Sustainability in Business?
Corporate sustainability refers to the practice of operating a business and making decisions using the three pillars of sustainability: environmental, social, and economic. By doing so, corporate sustainability helps companies achieve an advantageous balance between short-term profitability and long-term ecological impacts while still facilitating positive organisational performance and healthy business growth.
Sustainability in business is not purely altruistic. It is impossible to use your company to do good in the world if you are not financially able to. Doing well and doing good are closely intertwined, and a successful business model should include both strategies.
Why is it Important?
Sustainability plays a crucial role in shaping the future of global industry. Sustainable business practices are critical not only at the micro-level for individual organisations but also at the macro-level, affecting society as a whole.
These business strategies support environmental and social responsibility and economic growth. By implementing them into operations, companies can minimise waste and pollution, reduce their carbon footprint, lower costs, improve their brand image, and conserve valuable, irreplaceable natural resources. Furthermore, they can build a loyal customer base and attract skilled employees with goals, ethics, and beliefs that align with theirs.
Key Benefits
The adoption of sustainable strategies into your business practice can result in a variety of short-term and long-term benefits.
Cost Savings
It may seem counterintuitive that spending more money upfront on sustainable practices and schemes can result in higher company profits, but multiple studies show that the most sustainable companies in the world are also the most profitable.
Cost reductions are often the result of implementing energy-efficient measures that can significantly lower utility bills, like reducing energy usage, lowering water and other resource consumption and minimising waste to lower disposal costs.
A Growing Market
A 2019 study revealed that 73% of global consumers were willing to shift their consumption habits to reduce their harmful impact on the environment. These numbers have only grown in recent years due to a noticeable increase in climate-related catastrophes and a worldwide shift in retail consumption thanks to the global pandemic. Millennials, in particular, are more willing to pay more for products and services that contain sustainable ingredients and are more likely to support brands that promote social responsibility and environmental awareness.
By shifting your company to a sustainable business model, you will be able to gain new market share by attracting an eco-conscious customer base, increasing your sales and growing your brand awareness on a global scale.
Regulatory Compliance
Many national governments worldwide have started implementing environmental and sustainability regulations that companies are required to follow. Failure to do so can often result in costly fines and other legal penalties that may affect business operations and growth.
Furthermore, some governments offer various enticing tax incentives, such as tax credits or rebates for using renewable energy sources, to companies that adopt sustainable practices.
Brand Reputation
Now more than ever, consumers are actively seeking out sustainable and ethical brands. A recent consumer study revealed that brands that publicly stated their social and environmental commitments are growing faster than companies that have remained silent on the subject.
Not only do improper business practices damage a brand’s reputation and cost it valuable customers, but the resulting public relations issues could divert vital human and financial resources from core operations. By implementing sustainable strategies, you protect the environment and your own workers and mitigate the risk of damaging incidents and controversies.
Finding a Competitive Edge
Incorporating sustainability into your company’s operations does not diminish your overall business goals. In fact, infusing your brand with a new purpose can help you attract motivated and skilled employees who will contribute to your financial success.
A recent study revealed that 89% of executives believe an organisation with a strong, shared purpose will have greater employee satisfaction. In addition, 85% stated they were more likely to recommend a brand with a clear and definitive purpose to others.
Building a brand that aims to positively contribute to the world, as opposed to just being a place that provides a paycheck each month, can give you the necessary competitive edge to attract the top talent in your industry.
Co-Operative Action
It can feel impossible to make meaningful, effective, and lasting change as a lone individual. However, that is not the case when the most innovative and influential companies in the world come together to solve the most pressing global issues. While governments struggle to address public goods problems, pollution, and climate change, large corporations with purpose-driven goals are experiencing greater success.
A fantastic example is Unilever, which committed to only using palm oil from certified sustainable sources in 2008. Palm oil is incredibly cheap and versatile and is found in nearly half of all packaged products, including soap, ice cream, and lipstick. However, palm oil is responsible for record greenhouse gas emissions and the destruction of crucial environmental habitats, which threatens the survival of many animal species.
The global brand worked alongside competitors, government organisations, NGOs and Indigenous peoples’ organisations to power an industry-wide adoption of sustainable palm oil.