With the threat of climate change looming over the whole world, there’s been greater emphasis on the importance of sustainability. Not just environmental sustainability, but also economic and social. This means sustainability is also becoming increasingly important for corporations. People’s perspectives are changing, and so does consumer behavior.
Corporate growth without concern for the depletion of natural resources no longer has a place in this age. Corporations that seek to remain standing in the future would need to take a sustainable approach towards business. Instead of looking at it like a liability they are forced to take, it should be viewed as an opportunity for increased efficiency and long-term investment. Simply put, being sustainable should be seen as an advantage instead of a handicap.
What is corporate sustainability?
In the context of corporations, being sustainable means implementing a business strategy that puts the ethical, social, environmental, cultural, and economic aspects of business at the forefront to provide long-term value for stakeholders. These strategies aim to transform businesses into organizations that are long-lasting, transparent, and allow for proper employee growth.
Corporate sustainability has three pillars: environmental, social, and economical. Environmental sustainability receives the most attention since it’s the one directly tied with the threat of climate change. Under this pillar, corporations strive to reduce the adverse effects (e.g., carbon emissions, use of plastics) of their operations on the environment.
Social sustainability is the pillar focused on people. This pillar represents the responsibility of corporations in supporting their employees, stakeholders, and the community where they’re established. This support boils down to the fair treatment of employees and being a good community member.
The last and third pillar, economic, centers on corporations’ financial stability. A business that’s economically sustainable should be capable of making a profit without compromising the two other pillars. It’s also referred to as good corporate governance, meaning corporate leaders should serve the interests of stakeholders without harming the community, violating company values, and sacrificing the welfare of its employees and customers.
Why corporate sustainability is so important
Businesses play a major role in society, which means their actions will have a significant impact on the world’s fight against climate change. Like world leaders, the decision of business executives can shape the world we live in. Society understands this, and so it’s been pushing corporations to become sustainable. Those who display concern for the community and the environment, not only through words but through action, receive support from governments and their people. Those who don’t are admonished and lose the trust of the people.
Aside from being a major player in the fight against climate change and bettering communities, another reason businesses should adopt a sustainable strategy is because of the benefits it brings. The primary reason most companies hesitate to take a sustainable approach in their business is that they’re not certain if it’s beneficial, which really shouldn’t be a dilemma since the benefits of corporate sustainability aren’t hard to see.
The benefits of corporate sustainability
- Improves efficiency – In more ways than one, being sustainable is akin to being efficient. A sustainable company doesn’t waste resources and makes sure everything it consumes will have an overall positive impact on the company, the environment, and society. Sustainability strategies can lead to significant cuts in expenses and considerable bumps in profit.
- Improves brand identity – Millennials, who comprise much of today’s population, place more value on principles and are more willing to align their habits with eco-friendly practices. Generation Z, which succeeds them, shows as much willingness. This means companies who adopt a sustainable strategy are more likely to receive support, thereby increasing their value.
- Helps meet consumer demands – The demand for products manufactured sustainably is increasing, and only those who make the shift to sustainable strategies can meet that demand. Simply put, businesses that don’t prioritize corporate sustainability management will lose a lot of their market share.
- Attracts the best people – Talents are less likely to work with a company with a bad reputation regarding sustainability. On the other hand, sustainable companies will find it easier to attract talents, given that Millennials make up much of the workforce. Moreover, knowing they’re working for a sustainable company can increase morale and motivate better employee performance.
- Opens new opportunities – As everyone shifts towards a sustainable lifestyle, businesses that are already operating sustainably will get more business opportunities. They will be in the best position to grab opportunities such as government projects for the environment and take advantage of the increasing demand for eco-friendly products.
- Attracts more investment – Sustainable businesses will have higher ESG (environmental, social, and governance) ratings, which is one of the primary factors investors consider before giving businesses their money.
How to implement a corporate sustainability strategy
Existing companies should approach the shift toward sustainability gradually. They can start with small changes and take on bigger ones along the way. What’s important is to start the change internally, looking at their own processes and culture and determining what needs to change. Then, they can proceed to make external changes. Starting from establishing partnerships with sustainable businesses and organizations and eventually working with the community and the government.
Conclusion
No company can achieve sustainability alone. All industries should work together. How can a manufacturer transition to plastic-free packaging if there are no businesses to supply them with biodegradable materials? A brand that wants to build an eco-friendly image would need to choose an ad agency that aligns with its sustainability goals. But what if such an ad agency doesn’t exist? People, governments, and businesses need to collaborate if sustainable development is to be achieved.