Organizations are increasingly integrating sustainable business model strategies. Although it’s believed to stem from a feeling of doing good for the planet, such integrations are happening because businesses have realized that sustainable business practices can be successful. According to a recent survey by McKinsey, 70% of people said that their organizations have formal governance of business sustainability in place. Today, across all industries, business and sustainability have to go hand in hand as most executives believe that a sustainable business strategy is necessary to survive in a competitive market. The rest believe it will become unavoidable in the near future.
Here we’ll discuss why business and sustainability is a crucial combination and discuss some of the benefits, principles and examples of business sustainability.
What Is Business Sustainability?
Business sustainability refers to practices for operating businesses that don’t impact the environment negatively. A green business follows a sustainable business model that operates in the best interest of the environment, locally and globally. A business that is environmentally aware looks beyond profits and tries to impact the environment and society positively. A sustainable business strategy plays a vital role in improving the structure within which it operates and constructing an environment where businesses can thrive.
Principles of Business Sustainability
A sustainable business strategy must, in practice, consider these three things in operations:
- Organizations have to recognize the impact they have on their employees and the community. This means that organizations with a sustainable business model have to commit to ethical treatments and practices, fair wages and a safe and clean environment.
- They have to respect natural resources by reducing consumption. Organizations have to reduce resource extraction, rely on recycling and make operations more efficient in reducing waste.
- Businesses have to look past immediate profits and invest time and money in technology and people. Business sustainability practices demand patience, as benefits can take time to show. Organizations must look at sustainable business practices as an investment in people and society instead of fixed assets.
Many fossil fuel businesses have made major investments in clean and renewable energies that are clearly less profitable in the short run but constitute a major step in protecting the environment.
Importance Of Business Sustainability
Society is constantly pushing organizations to shift to business sustainability practices. The importance of business sustainability is, however, not limited to pleasing shareholders and customers to protect revenue. The following are also crucial:
- Reducing waste through energy-efficient investments can produce savings quite often
- ESG rating stands for environmental, social and governance rating, which shows investors, shareholders and customers how effective the sustainable business model of an organization is
- It’s becoming common for individuals to seek employers who are committed to business sustainability and they are even willing to take a pay cut if a business is sincere in its sustainability practices
Business sustainability has its benefits in this new market that demands fresh approaches such as:
- A sustainable business model can reduce costs as it focuses on efficient energy consumption, reuse of products and reduction of waste
- An organization’s reputation is a key factor in deciding how well it does in the market. In a world where people are demanding sustainable practices, it contributes to customer retention and investor satisfaction
- Using sustainable materials to manufacture products can give an organization a competitive advantage since people are increasingly drawn towards products that are environment-friendly
- Innovative strategies, better reputation, reduced business costs and new customers are the perks of sustainable practices that only increase the bottom line of an organization.
We have reached the point where business sustainability is no longer a point of debate. Keeping in mind the urgency of climate change, businesses have to move in a sustainable direction to adapt to this rapidly changing world.
Examples Of Business Sustainability
Let’s look at some sustainable business examples:
Nike And Adidas
Nike and Adidas have shifted their focus to sustainable practices. Nike is focusing on reducing waste and minimizing its carbon footprint. Adidas has set up a green supply chain by eliminating plastic use and finding alternatives for manufacturing processes such as dyeing.
Nestle And Unilever
Nestle and Unilever are big industry players that are being looked at as successful sustainable business examples. Unilever has made commitments to produce organic palm oil and reduce waste and carbon footprint. Nestle has focused on its product life cycle, waste management and water efficiency.
Big names have made strong commitments to business sustainability largely by addressing material issues and transparency.
As the world is embarking on a journey to shift to more sustainable practices, it’s becoming fundamental for managers and leaders to follow suit and develop strategies for business sustainability. Harappa’s Executing Solutions program is a strategy execution course that teaches how to effortlessly take solutions from idea to execution. Work with frameworks to mind cost, quality and time. Learn the PACE toolkit to assign tasks, the BLAST approach to implement solutions and SANE response to focus on actions. Enroll to get neat ideas for strategy execution and to learn crisis management techniques in detail.
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