Sustainable Business: The What, Why, and How
The world is changing rapidly, and so are people’s perspectives on consumerism. Back in the day, consumers didn't care about your company’s carbon emissions or plastic waste. But nowadays, they want corporations to behave responsibly. And when companies act recklessly, their stock prices can drop when the public turns its back on these businesses.
Unless you’ve been living under a rock, you have most likely heard of the term strategic sustainability. You have also probably heard how companies can use sustainability as a strategy. But what exactly makes a company sustainable? Does it just involve switching to LED bulbs and paper straws? Well, not quite. Actually, there’s way more to sustainability than that.
In this article, we’ll go through corporate sustainability step by step. We’ll start with understanding what sustainability is, why it is important, and how you can incorporate it into your business. So, let’s dive into it.
What Is a Sustainable Company?
A sustainable company (also referred to as a green business) is a company that has a negligible negative impact or a purely positive impact on the environment, economy, and society. The United Nations Brundtland Commission describes sustainability as “meeting the needs of the present without compromising the ability of future generations to meet their own needs.” A sustainable company follows progressive environmental and human rights practices. But there are other factors that count, too.
Characteristics of a sustainable company
In the book Build a Green Small Business, author Scott Cooney describes four attributes of a green company:
1. A green company incorporates the principles of sustainability in all its business decisions. This means every decision is made while keeping environmental, social, and economic sustainability in mind.
2. A sustainable company offers eco-friendly products and makes a contribution to replacing the demand for non-green products. For instance, Tesla is a company that is replacing traditional cars with electric vehicles that have lithium-ion batteries, which are recyclable.
3. A sustainable company is greener than its traditional rivals. Not everybody can afford to build expensive battery-run cars, but the good news is—they don’t need to. Even smaller steps towards sustainability count, like being one step ahead of your competitor. For instance, a supermarket that only uses paper bags is greener than a competitor that still offers plastic bags to customers during checkout.
4. And last but not least, a company that incorporates sustainability as a strategy conducts its business operations by keeping environmental principles in mind. In a book called Environmental Principles and Policies, Professor Sharon Beder, an environmentalist like Cooney, has discussed the six principles: the sustainability principle, the polluter pays principle, the precautionary principle, the equity principle, the human rights principles, and the participation principle.
Examples of sustainable companies
Now that you know what a sustainable company is, let’s quickly discuss some examples of strategic sustainability in the corporate world. While these companies are not “perfectly sustainable” (which is virtually impossible to achieve), they provide good starting points.
- Apple: The world-renowned tech company uses aluminum, and not other materials, in order to reduce emissions.
- IKEA: The Swedish-founded furniture giant is striving towards recycling or energy-recovering 90% of the waste from their operations.
- Intel: Another key player in the tech industry that recycles 75% of its waste.
- Unilever: The British consumer goods company is using sustainability as a strategy to reduce their carbon emissions by half by the year 2030.
- A business can be called sustainable if it incorporates the principles of sustainability at its core, offers eco-friendly products, is greener than its traditional rivals, and conducts its business operations by keeping sustainability in mind.
- Professor Sharon Beder includes six environmental principles in her book: the sustainability principle, the polluter pays principle, the precautionary principle, the equity principle, the human rights principles, and the participation principle.
- Companies should use sustainability as a strategy to attract younger consumers, improve their public image, and make operations more efficient.
- Businesses can incorporate sustainability by innovating, redesigning operations, and using fair trade strategies to source raw materials and manufacture products.
- Hiring a sustainability consultant can help kick-start a company’s sustainability journey, as these consultants are experts in creating sustainability strategies and have helped other companies become greener and more socially responsible.
Why Companies Should Use Sustainability as a Strategy
Now you know what a sustainable company can look like. But you may be wondering: What are the benefits of using sustainability as a strategy? Let’s dive into the reasons why strategic sustainability may be the best business decision you’ll ever make.
Attract younger talent and consumers
According to a survey by Nielsen, 75% of millennials are open to changing their habits to reduce their impact on the environment. The generations younger than millennials are no different. You can find a myriad of statistics on this topic, and you’ll find one common result: younger people want a sustainable future. So, businesses that are not eco-friendly and sustainable may have a hard time expanding their empire in the coming years. If a company wants to attract a vast majority of younger consumers as well as employees, it will have to use sustainability as a strategy in the future.
Become more efficient than competitors
Can strategic sustainability improve efficiency? Yes, it certainly can. For instance, McKinsey found through a survey that companies which were reducing energy use in their operations were 47% more effective than their competitors. Similarly, companies that were reducing waste from operations were 44% more effective, the ones that were reducing water use were 46% more effective, and the companies that were reducing emissions from operations were 48% more efficient than competitors. Again, this shouldn’t come as a surprise. Sustainability as a strategy is not just good for the environment and society, but it’s also good for your business.
Improve your company’s reputation
Let’s face it: Companies that emit tons of harmful gasses into the atmosphere, dump giant loads of waste into the environment, or source their raw materials unethically, aren’t really appealing to most people. As your business grows, public relations will become more and more important. Remember, just like people can choose who becomes the president through their votes, they can also choose which companies to buy from with their money. People are more socially conscious than ever before. So, if your company doesn’t have a positive public image, you may find yourself losing stock value and the support from investors. Consumers today have way more power than you may think.
As mentioned before, younger generations are more likely to choose a sustainable company if given an option to do so. That’s why first, you should strive to become a sustainable company, and then, promote your company’s image as a green and eco-friendly company through advertising—this is rapidly becoming the norm already and will continue in the future as well.
How to Implement Sustainability in Your Business
And that brings us to the final part of this article. So far, you’ve learned what strategic sustainability is and why businesses should employ sustainable practices. Now, let’s understand some ways in which you can turn your company into a more sustainable one.
And that brings us to the end of this article. Hopefully, you now have a better idea of what strategic sustainability is and how you can incorporate sustainability as a strategy in your business. If you want to start your own sustainability journey, then the link in the paragraph above has all you need to get started. So, what are you waiting for?