This guide will discuss: what is business sustainability, its importance, examples, and how to implement an effective sustainable business strategy
Published 28 Apr 2022
Business sustainability is the strategic approach of companies in doing business and creating long-term value products while ensuring that their operations and output do not negatively impact society. The general goal of a sustainable business strategy is to integrate environment and social factors into business goals, while still benefiting its stakeholders with financial gain.
A sustainable business follows the principle of the Triple Bottom Line which is the commitment of businesses to the three pillars of sustainability referred to as planet, people, and profit.
Three Pillars of Sustainability/Triple Bottom Line | iAuditor
In other words, sustainability is the concept of operating business as usual while still committing to environmental and social responsibility.
According to the research conducted by the Governance & Accountability Institute, 92% of the S&P 500 companies released a sustainability report in 2020 and based on the study conducted by KPMG, 80% of the world’s leading companies are now incorporating sustainability into their operations and goals. Meanwhile, almost a third of Europe’s largest listed companies pledged to reach net-zero by 2050.
These all show that sustainability is increasingly becoming a key priority of corporate governance and a part of their long-term objectives. But why is it really an important practice to businesses?
Reducing a company’s carbon footprint helps contribute to the common goal of lessening greenhouse gas emissions. It also helps companies commit to their energy efficiency goals and ensures that businesses consume energy responsibly.
One of the primary characteristics of engaging in sustainable efforts is the capability of creating and managing products or services with longer value. Committing to sustainability is often seen as an expensive practice for businesses but the lasting result it brings helps companies maximize resources, which eventually results in lower production cost.
International business standards and industry regulations change according to the current needs of the industry and this includes policies about sustainability. Proactively and constantly engaging in sustainable strategies helps companies comply with these requirements.
According to a recent study, 85% of the world’s consumers prefer buying from ‘green businesses’ or those who use sustainable materials in their production. Companies can use this to their advantage while reaching their own sustainability goals.
As more consumers become environmentally-conscious, the companies that are known to practice sustainability are perceived more favorably. Going green shows the world that you care about factors that affect the society such as the climate, proper use of resources, and equality. This can all help improve and develop your brand’s identity.
Committing to sustainability also affects good waste management practices, helping companies better manage waste, conserve resources, and lessen energy use.
Companies that integrate sustainability into their business strategy perform better than those that don’t. Research found that a stronger Environmental, Social, and Governance (ESG) rating is associated with better financial performance and lower cost of debt and equity.
Sustainable strategies may vary depending on the goals and key objectives of an organization. What works for a big company may not be as effective for a smaller business, and a sustainable approach for a particular industry may not be applicable to another. These attempts are largely tied to organizational values and must be tailored specifically to each unique entity with the goal to integrate sustainability with business strategies. For instance, sustainability in business can mean:
Based on the recent studies that focus on the importance and benefits of going green, businesses should have a plan in place as a guide in reaching their sustainability goals. These strategies will serve as a standard in assessing if they were able to successfully commit to their key objectives and efforts. Below are the steps and ideas on how to maintain a sustainable business:
Research about sustainability and its importance. There’s no specific strategy that fits all, so learning which sustainable efforts can work with the industry that your business is in is a good starting point.
If the concept of sustainability is at the heart of how a business operates, this can contribute to achieving the company’s sustainability goals a little more easily.
Once you recognize what strategies are applicable to your business, evaluate the current state of the areas for improvement and work from there.
Identify what other parts of the business can be improved and which operations can be executed more efficiently. Employee input is also valuable since they play a critical role in implementing these efforts.
Innovation is at the core of making your business sustainable and company strategies may need to be changed in order to achieve the sustainability goals. From discussing best practices to discovering efficient ways of doing things, innovation ranges from simple process changes to installation of technologies that could help maximize resources.
Being a sustainable business doesn’t only focus on the environment but other societal factors like equality, fair wages, and diversity. A report released in 2018 titled Better Leadership, Better World: Women Leading for the Global Goals, showed that gender equality in the workplace can help unlock more than US$12 trillion in new market value linked to the UN Sustainable Development Goals.
Once you’ve identified rooms for improvement and recognized sustainable opportunities, set a target that your organization can work towards. These goals may include reducing energy consumption, implementing waste management, or utilizing solar panels for production facilities, among others.
Ensure that the changes are implemented across your organization. Results may not be immediate so consistency is key to ensuring the plan’s effectiveness.
Businesses can also consider proactively complying and following the best industry standards, practices, and regulations to achieve their sustainability goals. Some of these are legal requirements from regulating bodies while some are industry best practices that can help businesses accomplish their sustainable goals. Check the following and see if they apply to your organization:
Environmental, Social, Governance or ESG is an assessment of a company’s leadership and management which considers factors ranging from environmental, social, and governance. It focuses on how the executives of a company run the business and if it’s done in an ethical and fair way. As previously mentioned, a strong ESG rating is associated with higher company performance.
Energy Savings Opportunity Scheme or ESOS is a mandatory energy assessment scheme for large organizations in the UK which aims to ensure that businesses are running and consuming energy as efficiently as possible. Following this assessment can help companies achieve their energy efficiency goals.
ISO 14001 is a series of international standards designed to help organizations operate with sustainability, adhere to environmental regulations, and continuously improve processes. This also contains ISO 14001:2015 which specifies the requirements for an effective Environmental Management System (EMS).
Sustainable Manufacturing is the strategic method of creating products through economical means and using components that minimize waste and reduce negative environmental impact. This is one of the practices that businesses do to implement and practice sustainability.
Circular Economy is the optimal use and reuse of resources in the various stages throughout production chains and the systematic solution to reducing waste from being created in the first place. Companies can use this concept as a guide in accomplishing their sustainability goals.
Businesses can further observe their sustainability progress by regularly monitoring the conformance of employees and tracking sustainable implementation in facilities. This can help in proactively catching inefficient areas in operations that need to be addressed, rooms for improvement, or non-conformance with implemented changes in your organization.
All these may be daunting to manually keep track of but companies can always utilize tools that can help monitor the progress and trends of their sustainability goals in an efficient and effective manner.
Leverage the use of technology in implementing your sustainability goals and objectives. iAuditor by SafetyCulture is a powerful inspection and auditing platform used by industry leaders to monitor sustainability practices in their operation. Use iAuditor templates and checklists to ensure that best practices are observed. Proactively identify issues and opportunities, and ensure that sustainable solutions are implemented in all processes of the organization. iAuditor can also help you do the following:
Sign up to iAuditor for free.
Use this template to monitor your organization’s sustainability practices and ensure that they are consistently implemented and updated as needed. Identify rooms for improvement and other opportunities by noting if your business is compliant or non-compliant to the mentioned items. This template is from the City of Melbourne's sustainable business plan and converted using the iAuditor app.
This template by Erith Group—a sustainable business enabling service provider, can be used by assessors to inspect sites and record any environmental hazards or any issues identified. This can also include positive notes or practices that are observed during inspections.
Jaydee Reyes is a content writer and researcher for SafetyCulture. Her six-year experience in the field of data research and media monitoring adds expertise and quality to her work. She is also a champion of leveraging technology to promote a culture of safety in workplaces around the world. As a content specialist, she aims to help companies adapt to digital changes through interesting and informational articles.
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