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Business Sustainability – What Is It And Why You Should Consider It

Apr 30, 2024 | Business, News

Business Sustainability

Sustainability refers to the level by which processes can be maintained without severely depleting the availability of the resources provided by the economy.

An economy provides 4 types of resources: natural, manpower, technology, and capital.

If these resources are depleted to a significant degree, the needs of future generations might not be met.

For example, in previous years, oil companies have been criticized for causing oil spills that have contaminated oceans and destroyed ecosystems.

These oil companies generated billions of dollars in profit but their careless and thoughtless practices have compromised the livelihood of people who rely on the ecosystem for survival.

Communities that depend on the ocean for food and commerce end up impoverished and bankrupt. Fishing businesses, restaurants, lodges, and food markets close down resulting in a trickle-down effect in the economy.

In 1987, the United Nations drafted a charter that defined sustainability as the capability of the present generation to meet its needs without compromising the needs of the future generation.

The UN’s Brundtland Commission issued a call to action to all 140 developing economies to continue their growth initiatives but at the same time, be more conscientious about protecting the environment and preserving natural resources that can benefit forthcoming generations.

What Is Sustainability In Business?

In the context of business, sustainability refers to the ability of the organization to maintain its operations without negatively impacting the environment in which it operates.

As you’ll discover in this section, many businesses have taken the sustainability initiative one step further.

Not only do they engage in business practices that don’t harm the environment but they also implement programs designed to contribute to the growth of the local economy.

Here are 5 businesses that embraced and successfully implemented sustainable practices.

1. Unilever

Unilever CEO Paul Polman created and implemented the Sustainable Living Plan in 2010.

The goal of the Sustainable Living Plan is to set standards in the sourcing of supplies, the manufacturing of goods, the performance of services, and the utilization of resources that do not negatively impact the environment.

Within 10 years of the program’s implementation, the company has developed processes that keep 75% of its non-hazardous waste from getting disposed of in landfills.

Likewise, agricultural partners in the value chain have adopted sustainable business practices.

2. IBM

The technology giant has been a proponent of business sustainability practices since the 1960s. IBM focused on building energy-efficient data centers that reduced the emission of environmentally harmful greenhouse gasses.

In 1990, the European Commission awarded IBM for the success of its data centers.

However, the company did not stop there or slow down its efforts. Instead, IBM took its sustainable strategy a few levels higher by designing smart buildings.

These smart buildings required less energy, incorporated environment-friendly practices for water management, and implemented policies that contributed to the health and economic well-being of the surrounding communities.

3. IKEA

Customers might see only the wonderful furniture and the tasty meatballs, but IKEA has been a practitioner of sustainable business strategies since it began its business in 1943.

50% of the wood used to build IKEA’s furniture is sourced from sustainable foresters. Meanwhile, 100% of the Swedish company’s cotton is sourced from farms that meet the standards established by the Better Cotton organization.

While shopping at IKEA, you might be pleasantly surprised that its global stores are powered by more than 900,000 solar panels.

4. Starbucks

The green-colored logo of Starbucks has taken on a new meaning other than “freshness”.

Starbucks has been a champion of green policies for years.

  • Unlike other coffee shops, Starbucks’ disposable coffee cups don’t contain polyurethane plastic.
  • While you’re enjoying your cup of Starbucks coffee, you might notice that the temperature of the shop is set at the environment-friendly temperature of 72 to 75 degrees Fahrenheit.
  • The cabinetry you see in their shops are most likely sourced from 90% post-industrial materials.
  • The company takes pride in purchasing its coffee from Fair Trade Certified sources.

Are you looking to create compost for your garden? Talk to the barista on duty and he might give you some of their used ground coffee that can make an excellent organic compost.

5. Google

Google is not just a giant among search engines but also in environment-friendly sustainable practices.

  • The technology company’s offices are exclusively powered by renewable energy sources.
  • Similar to IBM, Google’s data centers use 50% less energy.
  • Google’s green strategies have kept 91% of its non-hazardous waste away from landfills.

Google also remains actively involved in providing programs to nearby communities that are intended to improve education, boost productivity, and streamline business costs.

How To Create A Business Sustainability Strategy

You don’t have to wait for your business to become as big as IBM, Google, or Starbucks before adopting a business sustainability strategy.

Creating a sustainability strategy before you officially open for business will help build a purpose-driven path to success – one that aligns with your values and vision.

Having a sustainability strategy in place gives your business a moral and ethical compass – a conscience that keeps unconscionable practices driven by greed, selfishness, and materialism away from the boardroom.

Likewise, managing a business with policies that support sustainability at the startup stages will make it easier for you to institute changes as you grow.

Here are 5 steps on how to create a sustainability strategy for your business.

1. Organize Your Business With Right-Fit People

Are you looking for partners to help you run the business? Look for right-fit people to partner with.

Right-fit people are those who share the same or similar values as you. Decisions are made without compromising these values. As such, they will embrace your purpose and support your vision.

They will place the interest of the group ahead of the individual’s.

Think of having the right-fit people onboard your business like a crew that will confidently navigate your ship through choppy waters until you safely arrive at your destination.

2. Identify the Advocacy You Want to Support

Typically, a sustainability strategy addresses 3 areas of concern:

  • Society
  • The Environment
  • The Economy

The keyword is “sustainable”. You don’t have to cover all 3 areas in your sustainable strategy. If you adopt a strategy that’s too ambitious, your business might not be at the scale necessary to support it.

Build your sustainable strategy from the ground up by identifying the advocacy you can confidently support and grow to a point that its success will have a trickle-down effect.

For example, your primary advocacy is to create jobs in your community that has been hit hard by unemployment.

If your business can generate a significant number of jobs in the community, it can enhance the purchasing power of consumers, stimulate demand, encourage spending, help businesses in the community, and stimulate the local economy.

When your business becomes more profitable, you can identify another advocacy to support under your sustainability program.

 

 

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3. Define the Objectives of the Sustainability Strategy

Let’s pick up where we left off from the previous section and assume that your advocacy is to generate more jobs in the community. Before you can define the objectives of the sustainability strategy, you’ll have to do a deep dive with your team and find the best answers to these questions:

  • What percentage of our manpower complement can we reasonably recruit from the community?
  • What types of employment opportunities can we offer to the community?
  • Can we offer jobs to a community that has varying degrees of educational attainment and work experience?
  • Can our personnel needs/manpower complement accommodate a diverse workforce?
  • Is our HR department qualified or equipped to recruit/select/hire/train the right people from the community?
  • Is our current business model capable of reaching such a scale that we can improve employment levels in the community by an average of 3% per year?

Finding the best answers entails doing comprehensive research that involves surveys, interviews, and data gathering.

When you have the numbers, you have to analyze and be confident enough that your business can sustain its efforts to support the advocacy. Once you’ve developed a better understanding of the challenge ahead, you’ll be able to outline your set of objectives.

4. Create a Mission Statement

A Mission Statement isn’t just a set of empty words that were crafted to create an image of the company. Rather, a Mission Statement is the substance that powers the company to accomplish its various objectives to fulfill its purpose.

Think of a Mission Statement like a creed or a mantra that puts everything into perspective. It’s the statement that inspires every person in the organization to soldier on during the most difficult times and stay the course.

What are the qualities of an effective Mission Statement?

  • It must represent aligned values, purpose, and vision.
  • It must define the “what”, “why”, “when”, “where”, and “who”.
  • It must be realistic and actionable.
  • It must depict an objective that is scalable with the business.

An example of a good Mission Statement for a business that wants to give more employment opportunities for the community is as follows:

“Our mission statement is to introduce a hiring process that fills up a wide range of positions, generates jobs for the community and focuses on job fit without discriminating against age, gender, educational background, work experience, and social status, and offers the successful employees career pathing and succession planning opportunities as the business becomes more profitable.”

  • What – A Hiring Process
  • Why – To generate jobs for the community
  • When – Now
  • Where – Within the community
  • Who – The community members regardless of age, gender, educational background, work experience, and social status.

The sustainability aspect is covered by the goal of offering employees “career pathing and succession planning opportunities as the business becomes more profitable.”

In other words, as the business grows so do the career opportunities for the employees.

5. Map Out Your Business Sustainability Strategy

If the Mission Statement encapsulates the 5 W’s – what, when, where, why, and who – the Business Sustainability Strategy outlines the “how”.

How do you plan to meet the objectives established by your Mission Statement?

Let’s stay on our case study that focuses on improving employment levels in the community.

  • Here are some courses of action that could support this type of Business Sustainability Strategy:

In addition to the resume, interviews, and tests, use HR Software to pre-qualify applicants for employment as well as a post-hiring assessment tool to determine the best candidates for future promotions.

These tools include a questionnaire that creates a behavioral profile of the candidate.

Thus, in addition to work experience and educational attainment, you’ll know if the candidate will be a good fit personality-wise for your business.

Research has shown that many businesses consider Emotional Quotient (EQ) more important than Intelligent Quotient (IQ).

To support this contention, 61% of respondents in a survey shared their opinion that soft skills – or the behavioral traits that define someone’s personality – are more important than technical or hard skills.

Using these software-based HR tools can help you find candidates from the community that best fits the available jobs even though they don’t have the most impressive resumes.

  • Implement a remote work program that can provide employment opportunities for stay-at-home parents and retirees. The remote work program could also include full-time employees who can telecommute or work at home on a part-time basis.
  • Create programs that can identify and harness talent from schools located in the community. For example, introduce a program that offers special courses to K-12 students.

These courses include subjects that aren’t typically taken up in school such as business acumen, entrepreneurship, and basic office skills.

Then, include an incentive whereby the top performing participants will get rewarded with a paid apprenticeship during summer or after graduation.

  • Set aside 2% of net profits to support On-the-Job Training and skills development programs for members of the community. Successful participants can be considered for future job openings.

It might take time to create a Business Sustainability Strategy. Don’t rush it! Keep in mind that the finished version is not set in stone. It will continue to evolve and grow with your business.

That’s why the next point plays a very important role.

6. Track the Performance Numbers and Measure the Results

How will you know if the sustainability strategy isn’t affecting the business bottom line? You’ll have to keep track of key performance numbers and measure the results against your achievements.

Continuing with our example of a business that wants to give the economy’s employment rate a boost, here are a few metrics to look out for.

  • Employee Performance – HR must monitor the performance of the employees and implement a grading system. At the end of every quarter, analyze the results of the employee performance review. Identify which employees are leaders and which ones are laggards.
  • Calculate Employee ROI – Measure the ROI of each employee. Identify the ones who have generated positive returns on the investments your company made in them.
  • Review Financial Statements – Summarize your employee-related costs such as payroll, benefits, training, and recruitment.

Similarly, analyze opportunity costs or foregone costs due to employee absences and timekeeping. Find out if the sustainability programs are weighing down company profitability.

  • Track Attrition Level – Find out if the employee turnover rate of the people you hired from the community is trending upward or downward.

The results of the review could help you make adjustments to the sustainability program.

For example, to address productivity issues and high attrition levels, you could implement a slight increase in the percentage of remote workers in your manpower complement.

Studies have consistently shown that remote workers are more productive because they have better work-life balance and are less stressed than office workers.

Likewise, studies have revealed that businesses with a remote working or telecommuting program in place experience 25% lower attrition levels.

Incentivize the employees with an assurance that anyone who meets or exceeds the performance benchmarks will be assigned remote work duties for 6 months.

A combination of increased productivity plus a lower employee turnover rate will definitely improve your bottom line.

Remember, you’re still a for-profit organization. It’s noble for a business to embrace sustainability practices but you still have to make money.

Conclusion

If you’ve reached this section of the article, you might be asking this question:

“So what are the benefits of having a business sustainability strategy?”

The obvious benefit is that you have the financial means to support an advocacy you’re passionate about and still have a profitable business.

Having a sustainable strategy in place will also help your brand-building efforts. A 2020 study by McKinsey & Co. showed that more than 60 percent of US consumers would pay a premium for a product that uses environment-friendly packaging.

For that reason, you don’t have to wonder why Starbucks remains profitable even though the coffee chain giant has raised prices by an average of 1 to 2% each year.

Consumers view the price increase of Starbucks as their way of supporting the use of biodegradable packaging products and ensuring the health of Mother Earth.

Thus, when the state of the economy isn’t favorable for your business and a price increase is warranted, many of your customers will welcome the move because the extra dollar they pay will support a cause they believe in.

If you found this article informative and want something similar for your website, give us a call or send us an email. We offer content writing services in addition to web design and development.

 

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