If you have read much news coverage over recent years, you may have concluded that sustainability and business are more or less a contradiction in terms.
The general consensus seems to be that large corporations are intent on grabbing what they can, at whatever cost, and handing it to their executives and shareholders. There is, or rather was, perhaps a kernel of truth in that perception.
The sustainability movement has, after all, grown out of a recognition that businesses needed to consider more than profits.
However, for a large number of businesses, sustainability can, and should, simply be part of the way that they operate. After all, to survive, businesses by definition must be sustainable. Business leaders want to be able to make plans for the future and be relatively sure that the business will survive. They also want to treat their staff well because they want to retain their skills and talents.
This page explains more about how businesses can achieve these aims.
Understanding Sustainability in Business
Our page on sustainability explains that there are three elements, or ‘pillars’ to sustainability (see box).
Three Pillars of Sustainability
These three elements of sustainability are equally important:
Economic sustainability is the idea that our choices and actions must be financially viable. There is no point in making commitments that we cannot afford to keep.
Environmental sustainability is the idea that our actions must not have a long-term detrimental effect on the planet. This includes both not over-using resources and cleaning up after ourselves.
Social sustainability is the concept that we must be fair to other people, and ensure that we all have access to the resources that we need.
These three are sometimes known as ‘profits, planet and people’.
In business, economic sustainability is relatively simple to understand. Businesses need to make enough money to cover their costs, and to provide an income to the owners of the business. If they do not do so, then the business will not survive.
Environmental sustainability, in business, will vary with the company and sector. However, the key is to look at both:
- The resources that you are using (raw materials, energy, water and so on) and how you apply them; and
- What happens to what you don’t use (your waste products).
Sustainability is about not using more than your fair share of anything, and also ensuring that its extraction, generation, use and/or disposal do not have adverse consequences for the environment. This element that has been largely discretionary in business until fairly recently—and continues to be a problem area in many countries.
Social sustainability is two-fold: it covers both your own employees, and how you treat them, and how you treat those around your business: your customers, your suppliers and your neighbours. It includes concepts like fair trade, equity, community support and employee relations.
The precise actions taken to become more sustainable will vary across industries and businesses. However, the ‘common core’ is to treat people well and equitably, use resources effectively and minimise waste, and become more efficient.
Benefits of Sustainability in Business
In the past, it has often seemed as though corporate managers believed that social and environmental sustainability were the enemies of economic sustainability.
There is, however, growing realisation that the three go together, and can provide significant benefits to companies.
These benefits include:
Direct financial savings. Using fewer resources is, perhaps unsurprisingly, cheaper. Cutting down on packaging, for example, is both environmentally friendly and cost-reducing. Turning off computer monitors saves energy, and that saves money. There are many more examples where doing the ‘right’ thing is also cheaper.
Attracting customers. Many customers are actively looking for companies that are trying to operate mores sustainably. Over time, this is only likely to become more important. Companies that take early, strong action to improve their sustainability are likely to gain market share.
A stronger reputation for investors. Investors and other stakeholders are looking for companies that are prepared to go further to achieve sustainability. A strong environmental and social record can make it easier to gain investment for new projects, improving the company’s financial position.
Attracting and retaining good employees. We all want to work in companies that are good employers. Those who have taken deliberate action to become more socially responsible are much more attractive to potential employees, and so they have access to the best and biggest talent pools.
Achieving Sustainability in Business
With all these potential benefits, it is not surprising that so many businesses are taking steps to move towards sustainability. What, though, is required in practice? The owners and managers of sustainable businesses have some traits and beliefs in common. These include:
1. A genuine belief that sustainable is better
Businesses cannot simply pay ‘lip service’ to the idea of sustainability. Investors, customers and employees will all realise very quickly if you are not genuine, and your business will suffer as a result.
The owners and managers of truly successful businesses genuinely understand and believe that being sustainable is the right thing to do: that it will make their businesses better. These businesses are founded on the principles of sustainability, and ethical ways of working.
For more about this, you may like to read our pages on Ethical Leadership and Living Well, Living Ethically.
2. An ability to plan for the future
Sustainability is about the long-term. Really successful and sustainable businesses are planning many years ahead, not just for the next month or year. Consider a forestry business: it needs to be thinking about planting young trees now that will not be mature enough to cut down for at least 20 years.
Sustainable businesses may need to make that kind of investment on that kind of timescale. This may require a different approach to decision-making and problem- solving, because few businesses are used to operating at that level.
For more about these skills, you may like to read our section on Decision-Making and Problem-Solving.
3. A willingness to work with others and to change when necessary
Sustainable businesses may be planning ahead, but they are also flexible and open to change.
Their leaders and managers want to make the business more sustainable, and are always willing to ask and learn from others.
They are prepared to cooperate and benchmark themselves openly against others. They contribute to sustainable business indexes as a way to both learn and help others to learn. They recognise that sustainability cannot be achieved by one business working alone. Suppliers and customers are perhaps the most obvious sources of information—but many industries are seeing the benefits of cooperation across peer groups too.
Most importantly, sustainable businesses change what they do when they find a better way.
For more about managing change in business, you may find it useful to read our section on Change Management.
There is more about achieving sustainability in business in our guest post on the skills needed to make your business sustainable.
Finding the Right Way
There is undoubtedly growing belief in the business world that a more sustainable approach is beneficial.
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