Sustainability is not just a buzzword or a trend. It is a strategic imperative for any business that wants to thrive in the 21st century. Sustainability means meeting the needs of the present without compromising the ability of future generations to meet their own needs. It encompasses environmental, social, and economic aspects of business performance and impacts.
Why is sustainability important for businesses?
Here are some of the benefits that sustainability can bring to your business:
- Innovation: Sustainability challenges businesses to rethink their products, services, processes, and business models to reduce their environmental footprint and create positive social value. This can spark creativity and innovation that can lead to new opportunities and competitive advantages. For example, Unilever has launched more than 1,000 sustainable innovations since 2010, such as plant-based meat alternatives, biodegradable packaging, and water-efficient products.
- Growth: Sustainability can help businesses access new markets, increase customer loyalty, and enhance brand reputation. Consumers are increasingly demanding products and services that are environmentally and socially responsible, and are willing to pay a premium for them. According to a 2019 survey by Nielsen, 73% of global consumers said they would change their consumption habits to reduce their environmental impact, and 66% said they would pay more for sustainable goods. Businesses that can meet these expectations can gain a loyal customer base and differentiate themselves from competitors.
- Reputation: Sustainability can also help businesses build trust and credibility with their stakeholders, such as investors, employees, suppliers, regulators, and communities. Investors are increasingly looking for businesses that have a positive environmental, social, and governance (ESG) performance, as they believe this can indicate long-term value creation and risk management. According to a 2020 report by BlackRock, sustainable investing has become a core component of its investment approach, and it expects its sustainable assets to grow from $1.2 trillion today to more than $1 trillion by 2030. Employees are also more engaged and motivated when they work for a company that has a clear purpose and a positive impact on society. According to a 2019 study by Deloitte, 79% of millennials said they would consider a company's social and environmental commitments before deciding where to work. Suppliers, regulators, and communities are also more likely to support and collaborate with businesses that demonstrate sustainability, leadership and transparency.
How can businesses become more sustainable?
Here are some steps that businesses can take to start or accelerate their sustainability journey:
- Define your sustainability vision and goals: The first step is to articulate your sustainability vision and goals, aligned with your business strategy and stakeholder expectations. You can use frameworks such as the United Nations Sustainable Development Goals (SDGs) or the Science Based Targets initiative (SBTi) to guide your goal-setting process. You should also communicate your vision and goals clearly and consistently to your internal and external stakeholders.
- Assess your sustainability performance and impacts: The next step is to measure and evaluate your current sustainability performance and impacts across your value chain. You can use tools such as life cycle assessment (LCA), carbon footprint analysis, or social return on investment (SROI) to quantify your environmental and social impacts. You should also benchmark your performance against your peers and best practices in your industry.
- Identify your sustainability opportunities and risks: Based on your assessment results, you can identify your sustainability opportunities and risks that can affect your business performance and reputation. You can use frameworks such as the SWOT analysis or the materiality matrix to prioritize your opportunities and risks based on their importance and urgency. You should also engage with your stakeholders to understand their perspectives and expectations on your sustainability issues.
- Implement your sustainability actions and initiatives: The final step is to implement your sustainability actions and initiatives that can help you achieve your goals and address your opportunities and risks. You can use approaches such as design thinking or lean startup to develop innovative solutions that are user-centric, feasible, viable, and scalable. You should also monitor and evaluate your progress and outcomes using key performance indicators (KPIs) or balanced scorecards.
- Report your sustainability results and impacts: The last but not least step is to report your sustainability results and impacts to your stakeholders in a transparent and credible way. You can use standards such as the Global Reporting Initiative (GRI) or the Sustainability Accounting Standards Board (SASB) to guide your reporting process. You should also seek external assurance or verification of your data quality and accuracy.
Sustainability is not only the right thing to do for the planet and society but also the smart thing to do for your business. By embracing sustainability as a core value and a strategic driver, you can unlock new sources of innovation, growth, and reputation that can give you a competitive edge in the business
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