The challenges around sustainability are the biggest of our generation, and businesses can no longer ignore the issue. Humans emit a staggering 40 billion tonnes of CO2 into the air annually, contributing to the global climate change and our valuable ice caps are melting at an alarming rate. The great pacific garbage patch is now estimated to be 1.6 million square meters in size, and 18.5 million acres of forest is lost annually to deforestation. Both these factors increase climate change and destroy the precious ecosystems. The social side of sustainability is also in disarray, with an estimated 21 million to 46 million suffering in slavery today.
It is clear that sustainability is a complex issue which will require collaborative action from different units, from governments, corporations, charities and individuals to mitigate the detrimental impact. Not least of all, businesses – being one of the key entities large and powerful enough to tackle these issues. Although it may be the duty of a business to behave sustainably, it is certainly in their own interest to have a clear sustainability strategy.
Why is incorporating a sustainability strategy important?
Sustainability simply makes good business sense.
A new generation of the consumer class is sweeping in, who are willing to pay more for sustainable products, and this number is persistently increasing.
Customers are becoming more interested in the impact of the goods they buy, and as such are more aware of the actions of the companies they buy from. Research by Unilever has backed this, which unveiled that there is a potential market worth €966 billion for brands that are clearer about their sustainability credentials.
The increase in consumer consciousness is affecting businesses that are further down the supply chain. It is likely that businesses’ supply chains hold the biggest opportunities for breakthroughs in sustainability performance. As a result, an increasing number of responsible retailers are devising stringent policies that their suppliers must adhere to, from having complete workers’ rights policies to offering ‘green services’ such as fuel-efficient delivery methods. In order to stay competitive in the current market, businesses should, therefore, consider integrating sustainability into their strategies.
Sustainably minded consumers also include current employees who have the same views about the companies’ they work for as the companies’ they buy from. Millennials increasingly do not want to be associated with companies that do not behave responsibly. Not only do more people want to work for a responsible company, a report by SAP indicates that an integrated sustainability strategy boosts business success by increasing productivity and long-term retention in employees.
Lastly, it is also in a business’s interest to integrate sustainability in order to mitigate risks and reduce operating costs. Unilever estimates that is loses €300 million per year as worsening water scarcity and declining agricultural productivity leads to a rise in food costs. On the other side, many businesses are making enormous savings by installing renewable energy technologies and self-generating energy.
Why isn’t everyone doing it?
It is imperative that businesses act now to reap the benefits of an effective sustainability strategy. However,
implementing a sustainability strategy may appear notoriously difficult, expensive and time-consuming.
There is an excess of buzzwords, guidelines and goals which make it inherently difficult to know what to do. You’d be forgiven for confusing your SDG’s with your SBT’s, or the ISO14001 and the ISO50001. This begs the question: how do you create an effective sustainability strategy?
There are a number of simple steps that can be taken to ensure your sustainability strategy both, help the drive towards sustainability and boosts your bottom line. The main thing to remember is to ensure that the sustainability strategy aligns well with your business, allowing it to be part of the businesses strategy as a whole.
Competitor review: In order to do this, the first step is to look at the wider industry, in order to identify:
- What are your competitors doing?
- What are your customers demanding from their suppliers?
- What are the regulations in the market?
By doing this, you can realise what is important to your customers in order to reap the biggest benefit from your sustainability strategy. And by finding out what works well for your competitors, you will likely find what can work for you.
Align to business goals: To ensure your sustainability strategy works long term for your business, look at the areas where you can make an impact, and that aligns to the business’ goals. Carlsberg, for example, a very water intensive business, is working towards reducing water consumption by 50% by 2030. This is particularly important as many of Carlsberg’s breweries are in high water-security risk areas. Not only does this reduce Carlsberg’s environmental impact but reduces their water costs and helps to mitigate the risk of water scarcity on the business. By taking actions such as these, you ensure your commitment to sustainability can be truly sustainable over the long term.
Implement goals and targets: What also makes Carlsberg’s water policy effective is the use of goals. Carlsberg has set a definite goal of reducing water consumption by 50%, in a given timeframe.Additionally, goals give the business something to aim for and are motivating and aspirational for employees. All goals should be achievable in order to be credible, however, should also aim high. Only by aiming high can businesses make the necessary changes to overcome the complex sustainability challenges we face.
Measure and report: Lastly, measure your impact and report on it. The importance of this step is often overlooked and is treated as a mere ‘tick box’ exercise rather than an important step in becoming a sustainable business. Measuring and reporting provide valuable insights, it shows you if you are achieving your goals, and if not, allows you to identify the areas you need to improve on.
By taking these simple steps, you can ensure your business is working towards a sustainable future – for your business and the world. An effective sustainability strategy will increase profits, cut costs and boost your work force, all while helping to tackle the world’s toughest challenges.
If you are an SME, you may also be interested in our small business blog -‘How can small businesses join the route to sustainability?‘