What Is Sustainability In Business? Ready to integrate sustainability into your business? Keep reading to learn how to implement effective practices and which companies do best.
Sustainability, on its own, is a term that refers to living productively toward a healthy environment for current generations and the ones of the future.
Sustainability is a term that might automatically correlate to thoughts about the environment. So, what does that have to do with business? Read on to find out how sustainability and business directly relate.
A more sustainable country
In 1969, while NASA was making giant steps for mankind in space, the United States was also taking massive steps in commitment to the earth's environment.
The National Environmental Policy Act of 1969 was enacted and promised that the U.S. would "create and maintain conditions under which humans and nature can exist in productive harmony, that permit fulfilling the social, economic and other requirements of present and future generations."
This policy brought a new wave of focus and care for the environment and citizens' everyday practices. As science has progressed, the world has found new ways to maintain more sustainable practices.
Sustainable practices include:
- Protecting natural resources like energy, water, air and ecosystems.
- Integrating programs and incentives for individuals and corporations to adopt sustainable habits.
- Preventing pollution and reducing waste by considering the complete life cycles of natural resources.
A more sustainable workforce
The workforce has shifted its priorities as the world's practices have progressed. Studies show that Gen Z and Millennials care about three factors when searching for their ideal company:
- Wellbeing and inclusion.
Vital statistics to note about these two generations include:
- 51% indicated they would not work for a company with weak or nonexistent policies on social and environmental issues.
- 74% reported that a job is more fulfilling for employees when they can make a positive social or environmental impact.
- 70% said they'd have stronger loyalty for a company that facilitates opportunities to create a positive impact.
- 96% expect employers to take actionable steps in sustainability initiatives.
Why do these statistics matter? Because Gen Z and Millennials make up 46% of the workforce and are projected to make up 75% of the workforce by 2025.
As the number continues to rise, companies must live up to sustainable standards to do what's best for the environment and have a chance to recruit the best employees.
What does sustainability in business look like?
A sustainable business, or a "green business," does not negatively affect the environment or society. It is a business that has or strives towards a net zero carbon footprint. A carbon footprint is the number of greenhouse gasses emitted by an individual, group, event, or business.
Having a carbon footprint at net zero means eliminating harmful emissions that contribute to climate change, like greenhouse gasses, to be as close to zero as possible.
10 examples of sustainability in business
Businesses that use sustainable practices consider environmental sustainability and social and economic factors when establishing business decisions and operations. Sustainable practices require constant monitoring and reevaluation by stakeholders to ensure the impact of operations stays at net zero.
Examples of sustainability in business include:
- Utilizing sustainable materials during manufacturing.
- Reducing greenhouse gas emissions by optimizing supply chains (factories and transportation).
- Transitioning to renewable energy sources (solar and wind) to power facilities.
- Giving back to local communities by sponsoring education.
- Creating a carbon accounting system to monitor and improve the footprint.
- Designing infrastructures that reduce emissions, preserve water and eliminate waste.
- Promoting sustainable consumption.
- Protecting natural resources.
- Empowering a circular economy.
- Exceeding expectations of external regulations.
Benefits of sustainable business practices
While the obvious benefit of operating a sustainable business is protecting the environment, there are several other non-environment-related benefits for companies that make concerted sustainability efforts.
As people learn how to practice personal sustainability, they care more about businesses that operate as such.
Customers want to do their part in positively impacting the environment and are increasingly choosing businesses that care about the environment and practice sustainability.
55% of consumers report that sustainable products and practices dictate their brand decisions. Improve your brand awareness and attract new customers by maintaining sustainable practices.
Much like consumers, investors are also turning their attention toward business sustainability. Whether you run a small business storefront or an ecommerce startup, ensuring your business model is positively affecting the environment can boost your chances for funding with those interested in sustainable investing.
In 2015, members of the UN joined to create the Paris Agreement, an environmental pact through which nations promised to strive for:
- Reducing greenhouse gas emissions to reduce the rising global temperature.
- Reviewing progress, practice and commitment every five years.
- Offering financing and resources to developing countries to achieve the overall goal.
The Paris Agreement is legally binding, and countries must comply with the rules. Compliance ensures your business can continue its operations, which can be just as important as the social impact of taking sustainability issues seriously.
Employees are looking for more than just a place to work. The workforce is now driven by generations that care about their company's social and environmental impact.
Improve your chances of hiring the best employees by ensuring your business can be one people would be proud to work for.
As companies optimize operations and reduce resource consumption, their bottom lines can improve. While taking the time and money to implement these new practices at first can be costly, the overall long-term payoff can ultimately benefit companies.
How to create sustainable business practices
1. Assess and define
Before a business can create a plan, it must assess its current situation. Questions to guide that assessment include:
- What is the company's existing carbon footprint?
- Which smaller operations can be altered immediately (packaging and shipping)?
- Which larger operations can be changed over time with a specific plan?
- In what amount of time can the company achieve a net zero carbon footprint?
In addition to these questions, companies must schedule time-bound check-ins that allow progress monitoring.
2. Make it the mission
It's never too late to alter a mission statement. If your business recommits to sustainability but does not mention that in its mission statement, it's time to edit.
Including sustainability as part of the company mission statement can be a way to promote accountability and front-facing that mission to consumers.
3. Create a strategy
Creating a sustainable business is not always cheap. As a company begins to alter its practices, there must be a rollout within budget. Start small with everyday things like electricity and heat and work your way up to larger practices that can take some more strategizing.
4. Implement and assess
As you implement your strategy, it is essential to monitor your progress. Create time-related check-ins to assess quantifiable results.
Where have you made progress? Where can you still improve? Is there room in the budget to speed up any processes? Your company does not have to be perfect immediately, but ensuring it is still striving toward its mission is essential.
The most sustainable businesses
For the last five years, Barron's, a publication owned by Dow Jones & Company, has produced a list of the 100 most sustainable companies worldwide. They examined 1,000 of the world's largest publicly traded companies by market value to create their list.
Then, Barron's considered factors including:
- Workplace diversity.
- Data security.
- Greenhouse gas emissions.
Barron's top five most sustainable businesses of 2022 are:
- Best Buy.
Keep reading to learn more about how each business practices corporate sustainability.
Intel has committed itself to sustainability by striving toward global net zero greenhouse gas emissions by 2040. They have named their corporate social responsibility strategy RISE, which stands for responsible, inclusive, sustainable and enabled.
Clorox has committed to global net zero emissions by 2050 and reducing its virgin plastic and fiber packaging by 50% before 2030. Their corporate responsibility strategy is IGNITE, which aims to improve critical areas of their business, including growth, experience, operations and portfolio.
Ecolab has concrete sustainability goals. The company focuses on four areas: water, food, health and climate. Their yearly goals consist of the following:
- Help customers conserve 223 billion gallons of water.
- Provide safe, high-quality food to 1.5 billion people.
- Help clean 62.7 billion hands.
- Reduce company and customer greenhouse gas emissions by 3.7 million metric tons.
4. Best Buy
Best Buy has pledged to be carbon neutral by 2040 and has already reduced its carbon emissions by 40% since 2009. The company is also focused on helping its customers practice sustainability by creating goals and products to help reach $5 billion in energy efficiency savings.
PVH is one of the world's largest fashion companies that owns many of the world's best-known brands. While much of the fashion world has a less-than-shiny reputation for fast fashion and detrimental practices, PVH is changing the game.
PVH has pledged its properties to be powered by 100% renewable electricity, eliminate single-use plastics and emit zero waste by 2030.
How you can integrate sustainability in your business
As technology forges forward, sustainable practices are more reachable than ever. While implementing sustainable practices might cost more in the short term, the long-term payoffs are undeniable.
More sustainable business practices are not just vital to the environment; they are also a critical factor in attracting new customers and investors and staying compliant.
Remember, you don't have to make every change immediately, but refocusing some time, energy and funding towards a more purpose-drivensustainability program can make a massive impact on your business and the world.