“Encourage employees to select greener suppliers to reduce the overall burden your products and services have on our planet.”
Large companies and organisations including KPMG Australia and The Australasian Centre for Corporate Responsibility have been making good on their recent commitment to corporate citizenship by dedicating resources to help the globe overcome some of its most pressing challenges.
Sustainability in business: an overview
Sustainability has been among these key areas of focus, leading to environmentally friendly corporate initiatives from Apple’s commitment to closed-loop supply chains to Patagonia’s next-generation responsible business venture capital arm.
While it’s crucial for these organisations to make top-down commitments to sustainability, business units, groups, and individual teams within them can also take their own steps in playing a pivotal role in sustainability in the new normal.
1. Commit your team to your corporate purpose
At the corporate level, a clear statement of purpose from executive leadership has become a critical tool in supporting sustainability. Unit and team managers can use the same concept to empower their employees to act.
“This process of defining purpose makes it clear that businesses exist to serve society and not the other way round, and the link to sustainability becomes clear,” University of Pittsburgh School of Business professor CB Bhattacharya wrote in an article for the World Economic Forum.
Bhattacharya recommends that companies bring their purpose to life in the pandemic era by pursuing concrete sustainability goals and focusing on a few material areas.
Unit managers can follow up on that commitment by asking:
- What new sustainability developments will impact our products’ demand and the supply of our materials?
- What type of sustainability do stakeholders expect from our business?
By adding a sustainability variable to the business unit decision-making equation, middle management can help make good on big corporate promises.
One way to do this is to evaluate your immediate team’s carbon footprint. Although you might have policies in place already, the application may need some ground-level execution. You can start by examining how your electricity, gas emissions output, and water intake were measured in the past and consider re-measuring with a new reduction target in mind.
Encourage your senior leaders to reiterate your corporate purpose, sustainability objectives and reduction targets to all constituents, but especially the employees implementing them “on the ground.
2. Empower your employees
Getting employees to buy into sustainability measures is critical. Motivate your employees — and build enthusiasm for your efforts — by explaining why sustainable business practices benefit everyone. Tell them how they can make a difference by incorporating these new processes into daily operations.
Empowering your team requires communication. It’s something the leadership team at major home health product manufacturer Sunstar learned first-hand during COVID-19.
What is sustainable business?
In business, sustainability refers to doing business without negatively impacting the environment, community, or society as a whole.
Sustainability in business generally addresses two main categories:
- The effect business has on the environment
- The effect business has on society
The goal of a sustainable business strategy is to make a positive impact on at least one of those areas. When companies fail to assume responsibility, the opposite can happen, leading to issues like environmental degradation, inequality, and social injustice.
Sustainable businesses consider a wide array of environmental, economic, and social factors when making business decisions. These organizations monitor the impact of their operations to ensure that short-term profits don’t turn into long-term liabilities.
Examples of Sustainability in Business
Many successful organizations participate in sustainable business practices, however, no two strategies are exactly the same.
Sustainable business strategies are unique to each organization as they tie into larger business goals and organizational values. For instance, sustainability in business can mean:
- Using sustainable materials in the manufacturing process
- Optimizing supply chains to reduce greenhouse gas emissions
- Relying on renewable energy sources to power facilities
- Sponsoring education funds for youth in the local community
WHY IS GREEN BUSINESS IMPORTANT?
Beyond helping curb global challenges, sustainability can drive business success. Several investors today use environmental, social, and governance (ESG) metrics to analyze an organization’s ethical impact and sustainability practices. Investors examine factors such as a company’s carbon footprint, water usage, community development efforts, and board diversity.
Research shows that companies with high ESG ratings have a lower cost of debt and equity, and that sustainability initiatives can help improve financial performance while fostering public support. According to McKinsey, the strongest motivating factors to adopting a sustainable mindset in 2017 were to align with a company’s goals, missions, or values; build, maintain, or improve reputation; meet customer’s expectations; and develop new growth opportunities.
The overlap between social and environmental progress and financial gain is called the shared value opportunity. In other words, “doing good” can have a direct impact on your company’s ability to “do well.” Due to this opportunity, it’s clear why many businesses have adopted these practices. Find out how to make your business more sustainable by following these four steps to align your strategy and mission to create shared value.