Great Ways to do Sustainable Business in 2022
May 12, 2022
Table of Contents
Sustainability is becoming increasingly crucial for all businesses, regardless of industry. A sustainability strategy is considered necessary by most executives today.
In this article, read more about sustainable business and how to apply it to your business model.
What is sustainable business?
A sustainable business has little or no negative influence on the world (or local) environment, society, or economy. It is often known as a green business.
It is thus one that aims to satisfy the triple bottom line. They are grouped together under many headings, and the entire phenomenon is sometimes referred to as “green capitalism.”
Often, progressive environmental and human rights policies are found in sustainable enterprises. Green business is defined as one that meets all four of the following criteria:
- It incorporates sustainability ideas into all of its business decisions.
- It provides environmentally friendly products or services to meet the demand for non-green goods or services.
- It is more environmentally friendly than traditional competition.
- In its commercial operations, it has demonstrated a long-term commitment to environmental ideals.
In general, there are two types of sustainability in business:
- The impact of industry on the environment (for instance, carbon dioxide emissions)
- The impact of business on society
The purpose of a long-term business plan is to have a positive impact in at least one of these areas. When businesses refuse to take responsibility, problems such as environmental degradation, disparity, and social injustice can arise.
When making business decisions, sustainable enterprises evaluate a wide range of environmental, economic, and social concerns. These businesses keep a close eye on the effects of their activities. They do so to ensure that short-term gains don’t turn into long-term liabilities.
Free cooling for data centres is one approach, which uses naturally occurring events to control temperatures. The technologies involved may need an initial financial investment. Yet, the renewable resources they rely on are abundant and stable and will pay off in the long run.
Why is sustainable business important?
Sustainability may help businesses succeed in addition to addressing global issues. Several investors now evaluate a business’s ethical impact and sustainability practices.
- a company’s carbon (neutral) impact
- water usage
- community development activities
- board diversity
These are among other things.
According to research, organizations with strong ESG ratings have reduced loan and equity costs. Sustainability activities can help companies improve their financial performance while gaining public support.
The most driving elements for employees to be part of a sustainable business are:
- aligning with a company’s aims, missions, or values
- building, maintaining or improving reputation
- meeting customer expectations
- developing new development prospects
To put it another way, being a sustainable business has many advantages for environmental and social reasons. Yet, it has advantages for the business itself.
Examples of sustainability in business
Many successful businesses engage in socially and environmentally sustainable business practices. Yet, not every tactic works for everyone. It might also depend on the industry your business operates in.
Because they are tied to bigger corporate goals and organizational values, sustainable business strategies are unique to each organization. Here are a few illustrations of what a sustainable business may look like.
- Using sustainable materials and nontoxic raw materials
- Reducing greenhouse gas emissions and carbon emissions by optimizing the supply chain
- Replacing fossil fuels to reduce the carbon footprint
- Using renewable or clean energy sources to power infrastructure
- Sponsoring education grants for local youngsters
Sustainable business initiatives are exemplified by the following industry leaders.
Walmart, IKEA, and H&M
They have all taken steps toward being more environmentally friendly retailers. They did it mostly through fostering collaboration across their supply chains to
- decrease waste
- boost resource productivity
- optimize material usage
It has also taken initiatives with emerging market suppliers to address local labour conditions.
Pepsi and Coca-Cola
They have adopted ambitious ambitions. These include a greater focus on water conservation and the establishment of water replenishment targets.
Biogen and Novo Nordisk
They have both pushed to improve
- energy efficiency
- waste reduction
and other environmental initiatives in their industry. They’ve also prioritized social effect through collaborations in the areas of health and safety.
ANZ and Westpac
Banks in Australia, such as ANZ and Westpac, are advancing local communities through good sustainability practices. They are also integrating sustainability into their business operations and culture.
BMW and Toyota
Automobile manufacturers have made significant progress in terms of energy efficiency and emission reduction. Tesla, as an outsider, poses a serious threat to the industry’s overall footprint.
Nike and Adidas
They have both taken significant steps forward.
Adidas has established a greener supply chain and targeted specific concerns like dyeing and abolishing plastic bags.
Nike has concentrated on decreasing waste and minimizing its footprint.
Unilever and Nestlé
They have both made significant promises.
Unilever will focus on organic palm oil and its overall waste and resource footprint.
Nestlé will work on:
- product life cycle
- water efficiency
- waste management
These are all examples of sustainable businesses.
These sustainable businesses have all made significant contributions to sustainability, largely through increased openness and the resolution of tangible difficulties. They’re taking a more sustainable path, and over the next decade, other businesses should follow suit.
Steps for a sustainable business strategy
There are various approaches you can take to turn your business mission into results. Here are a few actions to take in order to develop a better long-term business strategy.
Determine the problem and set goals
Assessing what sustainability means to your team, company, industry, and client is the first step in creating change. Consider the major issues that each of these groups considers to be a top concern.
Consider asking questions like these to help steer this process:
- How much waste is the organization creating?
- Are our hiring practices attracting diverse job candidates?
- Is our product targeted to help a certain audience?
- What impact does our company have on the local community?
Answering these types of questions will help you transform your company into a more sustainable business.
Define Your Mission
You’re ready to define your company’s mission once you’ve decided on concrete goals. A clear mission statement is a crucial component of establishing a more sustainable company.
Your company’s focus on “doing” is outlined in an effective mission statement. It should effectively convey the values and purpose of your organization. It also should serve as a guiding light for why you do what you do.
In other words, your company’s five W’s should be defined in its mission statement:
Develop a strategy
You’re ready to realign your firm with a sustainable business strategy once you’ve produced a clear mission statement.
It’s critical to guarantee your firm stays profitable while developing a long-term business strategy. If you can’t stay in business, you can’t help your cause. Your sustainability efforts may assist you in becoming more profitable.
Consider the triple bottom line: how a company’s actions affect profit, people, and the environment. With this framework in mind, you may create a profitable and long-term business strategy.
Small changes might serve as a springboard for larger changes. For instance, if it is common for your organization to leave the lights and heat on overnight. Even when no one is on the premises.
Consider how much money and energy resources could be saved if the last person in the workplace just turned them off. Or if you set a timer or motion sensor to turn them off after the last person departed.
A good slice of customers is willing to pay a higher price for a product produced in a sustainable manner. According to a Unilever study, 33% of consumers want to buy from businesses that are “doing social or environmental good”. This indicates an untapped market for sustainable goods.
Put the strategy into action and evaluate the results
It’s one thing to talk about a newfound desire to do well and do good. It’s quite another to take a public stand and promise concrete outcomes. And then follow through with your proposition. You’re ready to make progress toward your goals now that you’ve established your mission and approach.
Remember to examine your strategy’s implementation process on a regular basis. You have to ensure that your objectives, mission, and progress remain aligned. You should implement a sustainability report.
Strategies for sustainable business
Sustainable business plans might strive to capitalize on long-term income potential. In the meanwhile, sustainable businesses might try to safeguard the company’s value from:
- rising energy costs
- regulatory compliance expenses
- shifts in customer perceptions of brands and products
- resource price variation
Not all strategies can be quickly integrated into a company’s portfolio.
Reporting on sustainability
Reporting on the company’s performance in regard to its objectives on a regular basis. These objectives are frequently included into a company’s mission statement (as in the case of Ford Motor Co.).
Make supply chains eco-friendly
Because a company’s environmental effect is considerably greater than the things it consumes, sustainable procurement is critical for any sustainability strategy. A good example of a model that encourages corporations to focus on this is the B Corporation (certified) concept.
Companies should also think about putting in place a solid measuring and management system with readjustment methods. They might think of a regular forum for all stakeholders to discuss sustainability issues as well.
The Sustainability Balanced Scorecard is a performance evaluation and management method. Its aim is to balance financial and non-financial measures, as well as short and long-term goals.
Challenges of sustainability
Companies must overcome two crucial gaps in order to properly handle a sustainable business:
“The knowing-doing gap”
According to a BCG/MIT study, 90% of executives believe sustainability is important.
Yet, only 60% of organizations include sustainability in their strategy. And only 25% have sustainability integrated into their business model.
“The compliance – competitive advantage gap”
While more businesses are perceiving sustainability as a competitive advantage, it remains a minority – only 24%. All businesses, however, must be compliant.
These issues should be addressed individually by management, rather than combining them. Compliance is a holistic concept and a “must do.” Only a few material issues matter when it comes to gaining a competitive advantage.
Sustainable businesses are also aware of the dangers of getting it wrong. For example, promising but failing to deliver, or addressing substantial issues but failing to follow through on compliance.
Main threats in doing sustainability
The phrase “doing more with less” can be used to describe the concept of sustainable business. It also means:
- becoming more efficient
- maximizing beneficial results
- minimizing negative impacts on the environment, society, and mankind
Managing and developing sustainable businesses necessitates going above and beyond what is required by laws and regulations. It necessitates you taking responsibility for long-term development.
Sustainable development addresses today’s requirements without jeopardizing future generations’ ability to meet their own.
Concerns about the economy
Businesses need to be profitable. It ensures their continued existence.
This could include, for example, ensuring that your company can continue to develop, hire staff, and run profitably in the future.
As a result, what you do in terms of the environment and social responsibility must be aligned with your company’s profit.
Concerns about the environment
Running a sustainable business from an environmental standpoint necessitates that its operations do not harm the environment (energy and water). As an entrepreneur, you can, for example, ensure that you use renewable energy.
You also reduce your negative environmental impact by
- decreasing emissions
- streamlining travel
- holding more digital meetings
- turning off equipment automatically at night
How do you deal with rubbish? Is it possible to lower your water consumption? These are some instances of important environmental issues. Dealing with them may also help you save money and enhance your profits.
Concerns about the community
Your company should be run as a “good citizen” when it comes to the social aspects of sustainable business management. This implies that your company must bear both “internal” and “external” liability.
One of the most important rules is that no one should be exploited in the manufacturing of the products you offer.
Two examples of external accountability are:
- paying taxes in the countries where you operate
- evaluating manufacturing conditions in the countries where you manufacture
You might also make sure that your vendors are certified in the areas that matter to you.
You can gain a competitive advantage by focusing on sustainability. Having a sustainable business is not only important for ethical reasons but can actually bring you many economic advantages.
As an entrepreneur, you can benefit much from environmental management. Sustainability obligations may be imposed by your stakeholders.
You can obtain a competitive advantage by demonstrating how you work with the relevant aspects. Increased ability to attract staff, clients, and suppliers could be one part of this.
Sustainable business and CONNECTS
CONNECTS is a SaaS platform that allows you to connect with other companies and Chambers of Commerce worldwide.
On CONNECTS, you can find communities and events as well. There is the “ESG for SMEs” community where you can discuss the theme of ESG and where it is heading.
You can even create your own community where you can host networking events, with each event focusing on a different topic. You can invite those you want to be part of your community.
You can focus on what really concerns you about sustainable business. It can be either the social aspect or the environmental one.
You can compare your approach to those of others with similar views. You can better each other and grow your businesses. You can find a sustainable business partner.
On our platform, you can find
- business communities
- online leads
As one single platform, it will save you a lot of time and effort. You can really boost your online business efforts.
Join CONNECTS and discover a world of new opportunities you can trust. The platform is a Business and Chamber Directory.
You can try our free trial for new members.
Are you a member of a participating Chamber? Join our Business Development Platform for free.