Few strategic business plans in the 21st century are conducted without the concept of sustainability in mind. Here we take a look at what business sustainability involves, and why it’s become a buzzword in industries of all sizes and types.
Increasingly, organisations are understanding that applying sustainable business methods helps them secure the long term prosperity of the company, and also build better relations with stakeholders across the board. Furthermore, problems caused by climate change, resource depletion, and population growth have increased the pressure on governments to take legal measures to ensure businesses work towards meeting certain sustainability targets, making the topic of sustainability more pertinent than ever before.
What is business sustainability?
So, what exactly is business sustainability? The term refers to how a company balances the management of its financial, social, and environmental risks with its obligations and opportunities - with the long-term in mind. It means making decisions that will not only benefit the company and its stakeholders now, but that will also ensure positive effects in the future.
Businesses that apply good sustainability processes are able to survive shocks, as they’re intimately connected to healthy economic, social, and environmental systems to which they are tied. Most would argue that sustainability is the key ingredient for defining the long-term success of any business.
Today, the majority of sustainability challenges businesses face are linked to the environment. As we’re waking up to the manmade effects on global warming, there is more public pressure than ever on governments to push through environmental sustainability laws and initiatives for businesses to work towards.
Why is it important?
Business sustainability is important for a variety of reasons. Firstly, there are the social and environmental obligations that businesses should meet to ensure they have a positive impact on the economies and environments they influence. Therefore the bigger the organisation, the more important it is for them to be seen to be working towards sustainability goals. Failing to do so means failing to meet unwritten but nonetheless vital social responsibility obligations, not to mention the negative PR consequences can arise from what the public may view as a disregard for sustainable practices.
Another reason is for the long-term prosperity of the company itself. Harvard Business School recently concluded an 18-year study which highlighted the importance of sustainability and its positive effects on businesses employing high sustainability standards. The evidence published demonstrated that companies who adopt sustainable business models do make significantly better profits.
The study categorised businesses into two groups – those who employed a high sustainability model against companies who did not. They classified those companies who fell into the ‘high-sustainability camp’ in three ways. The first behaviour trait was that these companies measured and reported on environmental and social metrics. Secondly, they found that high-sustainability companies paid particular attention to the relationships they maintained with their stakeholders. Thirdly, they adopted a governance structure that explicitly and directly took into account the environmental and social performance of the company, on top of the overall financial performance.
The results of the 18-year study were fairly conclusive. High-sustainability companies that adopted the three behaviours identified dramatically outperformed the low-sustainability ones in terms of both stock market and accounting measures. As the report established, ‘’failure to have a culture of sustainability is quickly becoming a source of competitive disadvantage. The argument about sustainability is over.’’
Examples of businesses developing sustainability
It’s easy to talk a good game when it comes to sustainability, but what are the practical steps businesses actually take to ensure they’re working towards these goals? What does sustainability look like in action? Many multi-national companies have examples of how they’ve approached sustainability problems in the past ten years.
The pharmaceutical and consumer goods manufacturer Johnson & Johnson demonstrated their commitment to human rights by having detailed policy that incorporates the Universal Declaration of Human Rights (UDHR), International Covenant on Civil and Political Rights, and International Covenant on Economic, Social and Cultural Rights - applied to all its workplaces.
Software company Adobe targeted a 75% reduction in company greenhouse gas emissions by adopting renewable energy technologies such as hydrogen fuel cells and solar arrays. Drinks giant Coca Cola improved the efficiency of its water use by 20% and identified the need for a rigorous third-party evaluation of its water management approach.
What are the career prospects in sustainability?
The demands of the modern age means professionals with a concise understanding of the importance of business sustainability, and how to implement financially viable changes to a company’s sustainability goals, are hugely sought-after. The type of roles professionals with an interest in working within this area of business include; Sustainability Consultant, Sustainability Implementation Specialist, Environmental Planner, Sustainability Analyst, Economic Development Specialist, to name but a few of the many interesting career paths available.
To rise to the challenges posed by sustainability, businesses need employees with a new range of soft and hard skills. It almost goes without saying that a requisite for success in this area is being able to have a long-term vision and inspire change to meet this vision. Being able to ‘see the bigger picture’, and where your organisation falls into this is invaluable for leaders in business sustainability, as is having a commercial awareness to identify risks and opportunities.
How to start a career in business sustainability
Such is its importance in the modern business environment, most business degrees today, both at bachelor’s and master’s level, include modules on sustainability. However, for those not looking to commit to full length degrees, and want to supplement their existing qualifications with a deeper insight into sustainability, there are also many professional short courses that can be taken, which are solely focused on developing your sustainable thinking skills.