Published 11 May 2018 Category: Entrepreneurs, SMEs, Startups, Business

What Exactly is Business Sustainability?

Nowadays every business must become sustainable, but what does it even mean to be sustainable? Why must businesses be sustainable and how do they do it?

Often referred to as managing the “triple bottom line”, business sustainability has become a must for any company looking to maintain any sort of success and longevity. In short, corporate sustainability is a process by which companies manage and coordinate their social, environmental and financial responsibilities. Often called managing “profits, people, and planet”. In a purely accounting way of thinking, a bottom line is one of solely financial aspirations; the company’s end profit. This is not enough for a business to succeed in the long run however as the triple bottom line is a more wholesome way of thinking about the future success of the company.
 
What are the benefits of a sustainable business?
Along with the protection and conservation of the planet, sustainable practices also help a company to:

  • Gain Market Share: Investors, customers, and the press all have an eye on how the company operates and if they are eco-friendly or not. Employing eco-friendly technologies and eliminating as much waste as possible shows investors and customers that you are committed to protecting the environment and enacting cost-saving measures. Between similar products and services where one company is sustainable and one is not, almost always will the customer choose the one using sustainable practices.

  • Save Money: Remember your parents yelling at you to turn off the faucet while you are brushing your teeth? They are not saying it just to bug you. There is validity to what they’re saying, as not only is it conserving resources, it’s also saving money. While investing in renewable resources and eco-friendly technologies may have an initial expense, in the long run cutting down on waste in resources, energy, and time will result in significant savings. Businesses must look towards the future and have an extended timeline for their return on investment.

  • Attract Employees: If you treat your employee’s right and institute fair and ethical practices, your current employees will love working for you and you will attract highly skilled potential employees. The more they love working for you, the harder they work and in most cases, the better the work will turn out. Yet another way that this will save you money, because the hiring and firing process can be expensive!

  • Create a Strong Brand Image: Year in and year out more and more customers and investors care about the business’s presence in creating a sustainable model. Investors are not only looking towards profit and returns anymore, they are increasingly looking at the initiatives that the business is taking to become sustainable. By investing in eco-friendly technologies, eliminating waste where possible, instituting fair and admirable business practices and putting efforts towards becoming sustainable, the company’s brand will strengthen. We all know that stronger brands generate more money.

 
How does a business become sustainable?
Sustainability in its core definition means “the ability to be maintained at a certain rate or level”. The World Commission on Environment and Development defines sustainable development as "A process of change in which the exploitation of resources, the direction of investments, the orientation of technological development and institutional change are all in harmony and enhance both current and future potential to meet human needs and aspirations" so in order become sustainable, a business must address the issues already stated: economic efficiency, social equity, and environmental conservation. There are a number of ways in which businesses do this. Some examples include:

  • Creating an Environmental Management System (EMS): According to the United States Environmental Protection Agency, an EMS “is a set of processes and practices that enable an organization to reduce its environmental impacts and increase its operating efficiency.” Each EMS is specific and tailored to each company’s goals and industry. Because of this individuality, it can optimize company performance across all of the triple bottom line dimensions.

  • Transparency in Reporting: Businesses have access to a plethora of information and are constantly measuring and analyzing their efficiency and sustainable practices. In order to build a sustainable business, they need to be transparent with investors and anyone with a stake in the business. By being transparent, a business will build trust and hold itself accountable for its own progress in becoming sustainable.

  • Engagement with Employees and Stakeholders: Companies can learn from the community within their business and the community outside of their business as well. Employees may know of ways to save energy, time, and/or money and can provide valuable feedback and insight. Engaging with the community is not only a chance to share your success stories and your sustainability initiatives, but also receive feedback and issues. If you understand the stakeholder’s issues, you can work towards solving them and jointly coming to a solution.

Each industry has its own standards and techniques towards becoming a sustainable business, but the common them is investing in the future. Investing in renewable resources and eco-friendly technologies will satisfy a business’s environmental accountability and in addition lead to increased economic efficiency along.

Social equity strengthens when a company invests in ethical business practices, including transparent reporting and engagement with its stakeholders. When a business manages to do all of these, they will satisfy their triple bottom line and enjoy success and longevity as they reap the benefits of being a sustainable business.
 
Want some examples? Check out the results for the 2018 100 Most Sustainable Corporations in the World!