Business Articles

Great Ways to do Sustainable Business in 2021

August 2, 2021

Sustainability is becoming increasingly crucial for all businesses, regardless of industry. A sustainability strategy is considered necessary by 62 percent of executives today, and another 22 percent believe it will be in the future.

Simply expressed, sustainability is a business strategy for generating long-term value by considering how a company works in its environmental, social, and economic contexts. The concept behind sustainability is that establishing such measures promotes firm lifespan.

In this article, read more about sustainable business and how to apply it to your business model.

What is Sustainable Business

Visual of Sustainable business

A sustainable business, often known as a green business, is one that has little or no negative influence on the world or local environment, community, society, or economy—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 goods or services to meet 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.

Sustainability in business refers to conducting business, without having a negative influence on the environment, community, or society as a whole.

In general, there are two types of sustainability in business:

The impact of industry on the environment

The impact of business on society

The purpose of a long-term business plan is to positively impact at least one of these areas. When businesses refuse to take responsibility, problems such as environmental degradation, inequality, 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 to ensure that short-term gains don’t turn into long-term liabilities.

The goal of sustainability necessitates a longer return on investment (ROI) timeline, yet initial investments can actually lead to improved profitability. Free cooling for data centres is one approach, which uses naturally occurring events to control temperatures. Although the technologies involved may need an initial financial investment, the renewable resources they rely on are abundant and stable and will pay off in the long run.

Why is sustainable business relevant?

Sustainability may help businesses succeed in addition to addressing global issues. Several investors now evaluate an organization’s ethical impact and sustainability practices using environmental, social, and governance (ESG) measures. Investors consider a company’s carbon impact, water usage, community development activities, and board diversity, among other things.

According to research, organizations with strong ESG ratings have reduced loan and equity costs, and sustainability activities can help companies improve their financial performance while gaining public support. Nearly 3,000 employees told McKinsey that aligning with a company’s aims, missions, or values, building, maintaining, or improving reputation, meeting customer expectations, and developing new development prospects are the most driving elements for adopting a sustainable mentality.

The prospect for shared value doing well on the left and doing good on the right is depicted in a Venn diagram.

The shared value opportunity is the intersection of social and environmental development and commercial gain. To put it another way, “doing good” has a direct impact on your company’s potential to “do well.” To integrate your business strategy with your goal and produce shared value, follow these four actions.

Examples of Sustainability in Business

Many successful businesses engage in sustainable business practices; yet, no two tactics are identical.

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 business sustainability may look like.

  • In the manufacturing process, using sustainable materials
  • Reducing greenhouse gas emissions by optimizing the supply chain
  • Using renewable energy sources to power infrastructure
  • Education grants for local youngsters are being sponsored.

Sustainability initiatives are exemplified by the following industry leaders:

  • Walmart, IKEA, and H&M have all taken steps toward being more environmentally friendly retailers, mostly through fostering collaboration across their supply chains to decrease waste, boost resource productivity, and optimize material utilization. It has also taken initiatives with emerging market suppliers to address local labour conditions.
  • Both Pepsi and Coca-Cola have adopted ambitious ambitions, including a greater focus on water conservation and the establishment of water replenishment targets.
  • Biogen and Novo Nordisk have both pushed to improve energy efficiency, waste reduction, and other environmental initiatives in the biopharmaceutical industry. They’ve also prioritized social effect through collaborations in the areas of health and safety.
  • Banks like ANZ and Westpac in Australia, for example, are advancing local communities through good sustainability practices and by incorporating sustainability in their business operations and culture.
  • Automobile manufacturers such as BMW and Toyota have made significant progress in terms of energy efficiency and emission reduction, with Tesla, as an outsider, posing a serious threat to the industry’s overall footprint.
  • These companies 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.
  • Nike and Adidas have both taken significant steps forward. Adidas has established a greener supply chain and targeted specific concerns like dyeing and eliminating plastic bags, whilst Nike has concentrated on decreasing waste and minimizing its footprint.
  • Unilever and Nestlé have both made significant promises, with Unilever focusing on organic palm oil and its overall waste and resource footprint, and Nestlé on product life cycle, climate, water efficiency, and waste management.

Sustainability: A must for your business model

Visual of Sustainable business model

There are various approaches you can take to turn your organization’s 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 being a top concern.

Consider asking questions like these to help steer this process:

  • How much waste is the organization creating?
  • Is our company culture struggling?
  • 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 establish your company’s sustainability objectives.

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 and 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: who, what, when, where, and why.

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. As has been demonstrated, 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 modifications might serve as a springboard for larger changes. Is it 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.

What about the customers who are willing to pay a higher price for a product that is 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,” indicating an untapped market for sustainable goods.

There are various industry-specific solutions that can help you boost operational efficiency while also delivering societal and internal value. Long-term, putting in the effort to develop a solid sustainability strategy can benefit both your organization and the environment.

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, promise concrete outcomes, and then follow through. 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 to ensure that your objectives, mission, and progress remain aligned.

Strategies for sustainable business

Visual of strategies of sustainable business

Corporate sustainability plans might strive to capitalize on long-term income potential while safeguarding the company’s value from rising energy costs, regulatory compliance expenses, shifts in customer perceptions of brands and products, and resource price volatility.

Not all eco-strategies can be quickly integrated into a company’s eco-portfolio. Innovation, collaboration, process improvement, and sustainability reporting are some of the most often used tactics.

Technology & Innovation

This introverted approach to sustainable business practices focuses on a company’s ability to adapt its products and services to produce less waste and follow sustainable principles.

Cooperation

Knowledge sharing and innovation are aided by the creation of networks with comparable or partner companies.

Enhancement of the process

Waste reduction requires continuous process surveying and improvement. The incorporation of new and better procedures is aided even more by employee awareness of the company’s overall sustainability plan.

Reporting on Sustainability

Reporting on the company’s performance in regard to its objectives on a regular basis. These objectives are frequently incorporated into a company’s mission statement (as in the case of Ford Motor Co.).

Improving the Supply Chain’s Eco-Friendliness

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, as well as a regular forum for all stakeholders to discuss sustainability issues. The Sustainability Balanced Scorecard is a performance evaluation and management method that aims to balance financial and non-financial measures, as well as short and long-term goals. It promotes strategic sustainability management by clearly integrating strategically important environmental, social, and ethical goals into the overall performance management framework.

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 in which I participated, while 90% of executives believe sustainability is important, only 60% of organizations include sustainability into 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 independently 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.

Companies that excel at sustainability handle both of these issues. They’ve progressed from awareness to action, from compliance to competitive advantage. They’re 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 while minimizing negative impacts on the environment, society, and mankind. Managing and developing businesses in a sustainable manner 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.

Your sustainability management can be divided into three elements that all contribute to long-term development: economic, environmental, and social.

Each of the three dimensions has an impact on the others. Reduced resource usage, for example, frequently lowers costs and raises profitability.

Concerns about the economy

Businesses need to be profitable. It ensures their continued existence. Living up to all of the objectives of sustainable development as an entrepreneur might be overwhelming. It is, nonetheless, necessary to start someplace. 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 profitability.

Concerns about the environment

Running a sustainable business from an environmental standpoint necessitates that its operations do not harm the environment, climate, or natural resources. As an entrepreneur, you can, for example, ensure that you use renewable energy.

Can you also reduce your negative environmental impact by decreasing emissions, streamlining travel, holding more digital meetings, and 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 to follow is that no one should be exploited in the manufacturing of the products you offer.

Paying taxes in the countries where you operate and evaluating manufacturing conditions in the countries where you manufacture are two examples of external accountability. You might also make sure that your vendors are certified in the areas that matter to you.

Paying taxes in the countries where you operate and evaluating manufacturing conditions in the countries where you manufacture are two examples of external accountability. 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.

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.

Sustainability and CONNECTS

On the business matchmaking platform CONNECTS, companies of all sizes who want to learn how to improve their environmental performance can interact with other companies that can help with sustainable business. It is possible to find people who are interested in or operate in the low-carbon or environmental sector.

You can even create your own community where you can host networking events, with each event focusing on a different topic, invite who you want to be part of your community. There you can discuss with industry experts as well as analysing case study businesses that have improved their environmental performance.

If you are already a member of the Chamber, you have free and complete access to CONNECTS, our online business matchmaking platform.

Are you an entrepreneur wanting to develop your business? Join our Business Matchmaking Platform and start your free trial now!

If you are a member of a participating chamber, then join our Business Matchmaking Platform for free.

Want to learn more about CONNECTS? Find us on Google maps! For more information, don’t hesitate to contact us.

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