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.