It feels like the world has been stopped in its tracks as our social and economic systems are going through massive change and disruption. In reality, however, we are moving faster than ever before. As the fault lines in our economy have been exposed there is a groundswell of innovation waiting to be unleashed, that’s because we have more sustainability challenges heading our way.
The global sustainability threat we face is not taking a break and we must face it head-on through collective decisive action. Protecting your business and ensuring that it can continue to thrive is essential. That is why it is time for businesses and organisations to get serious about sustainability.
Businesses are being asked to step up and take responsibility to demonstrate how they can improve peoples’ lives through sustainable fair practices. Profitability and resilience still matter but with sustainability and purpose, this now adds a new dimension. The best-run companies of the future will embrace these key principles.
Incorporating a sustainability strategy isn’t important, it’s imperative
If given the choice does anyone want to buy a product that harms the planet? Customers are quickly 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 IBM shows that seven in ten consumers deem sustainability as extremely important, with seventy percent of them expressing a willingness to pay a premium of up to thirty-five percent for sustainable brands.
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. A rising number of companies have pledged to work only with suppliers that adhere to social and environmental standards. Typically, these companies expect their first-tier suppliers to comply with those standards, from having complete workers’ rights policies to offering ‘green services’ such as fuel-efficient delivery methods. They in turn ask their suppliers for compliance from their suppliers, who ideally ask the same from their suppliers. The aim is to create a flow of sustainable practices that run smoothly throughout the supply chain. 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. It is a fact that those students on the verge of entering the labour market are part of a generation extremely concerned about the planet. Millennials and Gen Z 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 HP 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. Risk management, if executed properly, can be an essential management tool in driving innovation and value creation. The world’s most pressing problems have significant impacts. This, coupled with evidence that many of these problems are occurring more frequently, is a clear signal that businesses need to understand how these risks (and opportunities) affect their businesses. A recent study, focusing on a limited number of sectors, found that damage from climate change in the US alone will cost about 1.2% of GDP per +1°C average, without considering the impacts on lives and livelihoods. With globalized supply chains, climate change will be affecting more and more businesses in the coming years.
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 would be forgiven for confusing your SDGs with your SBTs, or the ISO14001 and the ISO50001. This begs the question: how do you create an effective sustainability strategy?
There are several 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.
Making your sustainability strategy work for your business
Competitor review: The first step is to look at the wider industry, in order to identify:
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. Goals are imperative to a sustainability strategy as they hold the business accountable, meaning they are more likely to keep to their word. 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 workforce, 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?‘
more than a word.