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In business, sustainability refers to doing business without negatively impacting the environment, community, or society as a whole.
Sustainability in business generally addresses two main categories:
The goal of a sustainable business strategy is to make a positive impact on at least one of those areas. When companies fail to assume responsibility, the opposite can happen, leading to issues like environmental degradation, inequality, and social injustice.
Sustainable businesses consider a wide array of environmental, economic, and social factors when making business decisions. These organisations monitor the impact of their operations to ensure that their short-term profits don’t turn into long-term liabilities.
Many successful organisations participate in sustainable business practices; however, no two strategies are exactly the same.
Sustainable business strategies are unique to each organisation as they tie into larger business goals and organisational values. Below are a few examples of what sustainability in business can look like.
Beyond helping curb global challenges, sustainability can drive business success. Many investors today use environmental, social, and governance (ESG) metrics to analyse an organisation’s ethical impact and sustainability practices. Investors look at factors such as a company’s carbon footprint, water usage, community development efforts, and board diversity.
Research highlights that companies with high ESG ratings have a lower cost of debt and equity, and that sustainability initiatives can help improve financial performance while fostering public support. Employees are saying that the strongest motivating factors to adopting a sustainable mindset are to align with a company’s goals, missions, or values; build, maintain, or improve reputation; meet customers’ expectations, and develop new growth opportunities.
The overlap between social and environmental progress and financial gain is called the shared value opportunity. In other words, “doing good” can have a direct impact on your company’s ability to “do well.”
HOW TO CREATE A MORE SUSTAINABLE BUSINESS STRATEGY
Here are four steps you can follow to align your business strategy with your mission and create shared value to create a more sustainable business strategy.
There are several ways you can go about transforming your organisation’s purpose into performance.
The first step to driving change is assessing what sustainability means to your team, company, industry, and client. Consider the big problems each of these groups thinks are a priority.
To guide this process, consider asking questions, such as:
Answering these types of questions will help you establish your company’s sustainability objectives.
Once you’ve agreed on concrete objectives, you’re ready to define your company’s mission. A distinct mission statement is an important part of becoming a more sustainable business.
An effective mission statement outlines your company’s focus on “doing.” It should effectively capture your organisation’s values and purpose and serve as a guiding light of why you do what you do. In other words, your mission statement should define your company’s five Ws: who, what, when, where, and why.
Consider how your mission statement will grow as your company scales. A mission statement should help a business evolve with the market, not hinder internal capabilities to innovate and disrupt. For this reason, make sure your objectives can be extrapolated from your mission statement.
Once you’ve created a strong mission statement, you’re ready to realign your organisation with a sustainable business strategy. In crafting a sustainable business strategy, it’s important to ensure your company remains profitable. You can’t help your cause if you can’t stay in business. As proven, your sustainability efforts may help you become more profitable.
Consider the triple bottom line, which refers to how a company’s actions impact profit, people, and the planet. With this framework in mind, you can develop a sustainable business strategy that’s also profitable.
Small changes can be the starting point for big change. For instance, does your company typically leave the electricity and heat on overnight, even when no employees are on site? Imagine how much savings could be realised, in both cost and energy resources, if the last person in the office simply shut them off, or if you used a timer or motion sensor to automatically turn them off after the last person left.
What about the consumers who are willing to pay more for a sustainably produced product? Studies have shown that consumers want to buy from brands “doing social or environmental good,” creating an untapped opportunity in the market for sustainable goods.
There are several strategies specific to your industry that can increase your operational efficiency while driving social and internal value. Putting in the work to build a robust sustainability strategy can help both your company and the environment in the long term.
If you need a starting point for crafting your strategy, consider internal and external opportunities to create value around your mission. Ask your team questions like, “will our customers pay more for our product if we produce it more sustainably?” or “can an enhanced business process decrease our emissions?” If the answer to either of those questions is “yes,” you may have the beginnings of your strategy, while simultaneously increasing your productivity and profit.
It’s one thing to talk about a newfound motivation to do well and do good, but it’s another to take a public stance, pledge quantifiable results, and actually achieve them. With your mission and strategy solidified, you’re ready to make strides toward reaching your objectives.
As you’re implementing your strategy, remember to revisit your process periodically to assure your objectives, mission, and progress remain aligned.
Unsure of where to start? Ask yourself if there are any areas where your mission can quickly have a great impact. Consider partnering with an organisation that has a similar mission to yours. Aligning your missions can help drive progress fast. Partnering with an established player can also enhance your credibility.
TYING IT ALL TOGETHER
You’re now equipped with four simple steps—from purpose to performance—that can help you create a more sustainable business.
When objectives become a purpose, a powerful story is established. That story will drive your mission and allow you to create an actionable plan. This plan is then ready to drive results and make you a true doer. Don’t worry if results don’t come immediately; the road to 100 per cent sustainability is long and may take testing a few different approaches for you to make your greatest impact.
If you are interested in learning more about how your organisation can be more sustainable, explore the SETsquared fully funded Sustainable Technologies Scale-up Programme.
The content available as part of this programme explores how to turn purpose into profit and how to create business models that drive change.
Fully funded through the European Regional Development Fund the support is available to organisations in the West of England region.
Learn more and submit the online expression of interest form:
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