Business Sustainability - definition and strategy
Business Sustainability - definition and strategy
In the last few years, there are excellent examples of companies committing to business “sustainability”. There are still a vast number of businesses that are keen to commit to sustainability. However, they need a clear understanding of what is required to develop and deliver corporate sustainability goals. The definition of an opportunity or a problem is a crucial step towards the solution.
Given this, we define business sustainability and its importance to the people, company, society, and the climate. Sustainability has many facets such as stakeholder management, disclosure, reporting, accreditation, legitimacy for employees and customers, and overall strategy and stewardship. No two companies will be the same, even those operating in the same sector. Thus, companies need to use the insight of their organisation processes and operations to develop and deliver business sustainability [1].
Corporate sustainability is not the same as corporate social responsibility.
Corporate social responsibility is a term that may be familiar to most companies and their employees and customers. It is essential to note that corporate social responsibility (CSR) and corporate sustainability (CS) are different. Both CSR and CS suggest creating shared value that benefits society and the environment. CS implies accountability inside the organisation and externally, e.g., via the supply chain. Also, CS covers both the short-term and the long-term outlook and opportunities [2]. Thus, an excellent existing CSR can be integrated into a holistic corporate sustainability strategy and practices within organisations.
Definition of Business Sustainability
There is no universally accepted definition for corporate sustainability. However, we select Investopedia's definition for Business Sustainability because it springs from the United Nations definition of sustainable development. Sustainable development requires society to use finite resources conservatively to be sufficient for future generations without compromising the current quality of life.
Sustainability is therefore defined as “meeting the needs of the present without compromising the ability of future generations to meet theirs. It has three main pillars: economic, environmental, and social. These three pillars are informally referred to as People, Planet and Profits” [3]. This definition underscores why sustainability encourages organisations and businesses to consider the long-term environmental, economic, and social impact in addition to short-term benefits.
Delivering Business Sustainability Strategy
Companies must develop their sustainability strategy that reduces business risks and maximises short, medium, and long-term opportunities. A critical success factor is to engage internal and external stakeholders so that financial, environmental, and social benefits are well communicated. An effective business sustainability strategy is tailored to the company’s unique processes and goals. Some companies apply the 17 United Nations sustainable development goals (SDGs) principles to identify opportunities to deliver financial, environmental, and social benefits to the People, Places, and Planet. A real incentive is to highlight the economic benefits of implementing sustainability initiatives regarding the environmental and social benefits. For example, installing a solar photovoltaic power system or energy-efficient lighting in buildings save money on energy consumption long term. Likewise, installing an energy-efficient window or building roof insulation means less energy consumed and thus less energy costs. An effective company sustainability strategy ensures that:
- Sustainability strategy creates value for the company.
- Senior company leadership are engaged from the outset.
- The corporate strategy aligns with business objectives.
Sustainability that caters for the “People” ensures more opportunities to provide safe and reliable indoor temperature and pollution-free indoor air. A strategy that considers the Planet includes climate change mitigation measures. A sustainability policy that looks after Places is about delivering initiatives that ensure building occupants' health and well-being and that waste is correctly removed and recycled. The United Kingdom government, for example, sets out guidance on sustainability reporting for the public sector. On the other hand, some large organisations use compliance reporting on initiatives such as Streamlined Energy and Carbon Reporting (SECR) and Energy Savings Opportunity Scheme (ESOS) to build a long-term plan towards business sustainability.
Companies invest money and resources into collecting data for compliance reporting. Thus, such data is valuable to make informed decisions on developing and delivering a business sustainability strategy. Also, organisations can develop NetZero carbon initiatives using science-based targets to decarbonise the business facilities and reduce the carbon footprint from the value chain.
Corporate sustainability is embedded as part of the organisational culture.
Corporate sustainability transcends different departments in the organisation. Organisational culture is critical to business success or failure. It has been known to be a precondition for developing a sustainable corporation [4]. Organisational culture begins with a vision statement that communicates corporate values, core beliefs, and a purpose that orientates business decision making, behaviours and mindsets. Likewise, corporate sustainability must be embedded in the business vision and strategy and must be widely shared throughout the organisation [5, 6].
Universally agreed definition required.
There is a need to have a robust, universally agreed definition for business sustainability. Companies must showcase that they have developed and continue to deliver practical corporate sustainability, long-term and short-term.
Contact us if your business needs expert support to develop or deliver its sustainability strategy.
References
[1] Rezaee, Z., 2016. Business sustainability research: a theoretical and integrated perspective. J. Account. Lit. 36 (C), 48-64.
[2] Ashrafi, M., Adams, M., Walker, T. R., & Magnan, G., 2018. How corporate social responsibility can be integrated into corporate sustainability: A theoretical review of their relationships. International Journal of Sustainable Development & World Ecology, 25(8), 672-682.
[3] Grant M, Sustainability, https://www.investopedia.com/terms/s/sustainability.asp, (accessed 1 September 2021).
[4] Baumgartner, R. J., 2009. Organisational culture and leadership: Preconditions for the development of a sustainable corporation; Sustain. Dev. 17, 102-113.
[5] Coleman, J., 2013. Six components of a great corporate culture. Harvard business review blog network. Available at: http://blogs.hbr.org/cs/2013/05/six_ components_of_culture.html. (Accessed 1 September 2021).
[6] Kantabutra S. Toward an Organizational Theory of Sustainability Vision. Sustainability. 2020; 12(3):1125.
Electric Vehicles Business News - 4 July 2020
Solar roofs for electric vehicles – Lightyear showcase it's technically feasible.
Two Dutch companies Lightyear and Royal DSM, are collaborating to integrate solar-powered roofs to electric vehicles, including cars, vans, and buses. Lightyear has a mission to design and manufacture electric vehicles with a long-range around 725 kilometers and more significantly charged by the sun.
According to DSM, “Today, the global EV market has enormous growth potential. It was valued at $160-plus billion in 2019; and is projected to reach $800-plus billion by 2027 according to international market assessments from Bloomberg, IDTechEx, and TIME. To accelerate this growth, the EV industry now needs to overcome the twin hurdles of limited range and grid-dependency.”
The benefits of integrating solar panels on the roof of an electric vehicle is very encouraging. A roof-mounted solar panel concept for electric vehicles such as being introduced by Lightyear and DSM has merits that include:
- The electric vehicle is charged during the day with electricity derived from the sun. The electric vehicle is charged whether it is parked in the workplace, at home, or whether it is driven on the road.
- The cost of an electric vehicle roof is offset by replacing it with a solar roof. The solar panels effectively take the space of the roof of the electric vehicle so that the total costs of the solar panel component and integration is minimised.
- Instances where the battery onboard the electric vehicle is fully charged, the excess electricity is fed into the electricity grid or used locally for example in building premises.
- Compared to business models utilised in solar and battery storage in buildings, electric vehicles embedded with solar panels pose an opportunity for electric vehicle owners to have reduced energy demand required to charge the electric vehicle. Thus, the electric vehicle does not depend entirely on energy from the national grid but can also utilise the electricity generated from the solar panels on the roof of the electric vehicle.
Ebbah EV continues to follow Lightyear’s example to review the opportunities for improving the business model of electric vehicles embedded with solar roofs. Shading considerations will be essential for vehicles equipped with solar roofs, to maximise capturing sunlight. IM Efficiency is another company that is working to integrate solar roofs on vehicles.
Globally, other vehicle manufacturers will undoubtedly follow suit, as further details about the solar roof design emerge over the coming years.
It is encouraging to see practical showcasing of the technical feasibility of solar-powered roofs to electric vehicles. Looking at the maturity of solar photovoltaics, embedding solar roofs in electric vehicles is long overdue.
Renewable energy could stimulate economic growth in COVID-19 recovery
IRENA report states that advancing green energy initiatives could spur economic growth, tackle climate emergency, and create millions of jobs.
Renewable energy can boost economic recovery from COVID-19 by boosting global GDP gains of $98 trillion (£79.5tn) between now and 2050. This is according to an in-depth report, by the International Renewable Energy Agency (IRENA) that supports countries in their transition to sustainable energy future in the pursuit of low-carbon economic growth and prosperity.
The agency’s Director-General Francesco La Camera, said: “Governments are facing a difficult task of bringing the health emergency under control while introducing major stimulus and recovery measures. The crisis has exposed deeply embedded vulnerabilities of the current system. IRENA’s Outlook shows the ways to build more sustainable, equitable, and resilient economies by aligning short-term recovery efforts with the medium-and long-term objectives of the Paris Agreement and the UN Sustainable Development Agenda.”
Whilst transitioning to a climate-safe green economy would require a cumulative energy investment of $130 trillion (£106tn) by 2050, IRENA projects this green investment would pay off 8 times more than costs with improved global health and environment accounted for.
Governments and institutions can accelerate investment in renewable energy and make energy transition an integral part of the major stimulus and recovery measures for bringing COVID-19 health emergency under control.
Investment in clean energy would generate 42 million jobs in the sector over the next 30 years, and achieve multiple health and social objectives, according to the report.
Clean hydrogen, advanced biofuels and carbon management are among the energy technologies that will be crucial to cut CO2 emissions beyond 2050 to net-zero, along with systematic changes and innovative business models. Green hydrogen is viewed as a key potential game-changer in decarbonizing a transport energy system especially the types of energy demand that are difficult to directly electrify, as outlined in the report.
So, could today’s crisis compromise bold clean energy transition? Better still, should this window of opportunity to align economic stimulus with climate goals, be taken now, or it will still be around ten or twenty years from now?
The risks of air re-circulation in buildings- Covid-19 prompts a wake-up call?
CIBSE and REHVA have issued recommendations to those responsible for managing building services, to reduce airborne exposures by reassessing building operations, including the process of heating, ventilating, and air-conditioning. REHVA- is the Federation of European Heating, Ventilation, and Air Conditioning Associations, CIBSE – is The Chartered Institution of Building Services Engineers.
CIBSE recommends that “any ventilation or air conditioning system that normally runs with a recirculation mode should now be set up to run on full outside air where this is possible.” Air recirculation principle has been widely used over the years because of its energy-saving potential.
CIBSE and REHVA guidance documents emphasise exposure mechanisms based on small droplets and particles that can transmit through the air within buildings.
So, with CIBSE and REHVA guidance on Covid-19 in mind, how can HVAC professionals and facility managers minimise the spread of other airborne diseases such as the flu, in buildings that apply air-recirculation?
Is a fundamental change in building air circulation strategies approaching? or, as noted by Bere: Architects, “Covid-19 should be a wake-up call for the building industry, for governments and for statutory regulators of the construction industry.”