If you look at Fortune 500’s ranking of America’s biggest companies, you may notice that almost all of them had corporate social responsibilities listed as a core objective. What was once an HR obligation has become a major maker of success for today’s fastest-growing companies.
If your business is falling behind in the sustainability department, we are going to cover some of the best ways you can successfully integrate sustainability measures into your business plan.
The Importance of Sustainability in Business
The outlook on sustainability has changed substantially in recent times. In fact, a recent survey by IBM found that 51 percent of respondents from ten major economies said they value environmental sustainability more than they did a year ago. The reasons for this go beyond the altruistic.
“Businesses have to realize that sustainability is no longer something that sets you apart from the rest. If you don’t practice sustainability, you are actually falling behind the majority,” advises Anthony Siskos, COO of HypeBlvd.
When businesses implement sustainable practices, there will be an obvious impact on the planet. Interestingly, some of the unexpected benefits of eco-friendly business practices are also reaped by the business itself. It not only creates business value, but it will help you meet your customers’ needs while simultaneously meeting investor demand and slashing business costs.
What Does Sustainability Mean for Businesses?
Each company’s sustainability practices will depend on the nature of the individual business. Overall, a sustainable business strategy aims to impact the environment or society as a whole positively. Some of the global issues that sustainable business practices should address are climate change, income inequality, human rights issues, fair working conditions, pollution, racial and gender inequality, and depletion of natural resources.
“Sustainability is no longer about doing less harm. It’s about doing more good,” says Jochen Zeitz, President and CEO of Harley-Davidson.
Many of today’s most successful businesses focus on more than just the bottom line, which is traditionally profit-driven. Instead, the focus is on “the three Ps”: people, planet, and profit. Some studies show companies that have the best sustainability practices are also the most profitable.
How Will It Affect Your Bottom Line?
Plenty of evidence supports sustainability practices driving positive results to the bottom line. There is a common misconception that investors and stockholders couldn’t care less about how sustainable you are as a business. This is simply not the truth.
“If you think your investors can’t be persuaded by sustainability, you have to move away from that line of thinking. Investors understand that sustainable practices significantly impact a company’s bottom line. Don’t let this go unacknowledged,” says Monte Deere, CEO of Kizik, a company innovating the footwear industry with their line of slip on shoes.
Consumers value businesses that engage in sustainable practices, so your investors will, too. This helps tie sustainability to real and tangible outcomes on the bottom line. Frankly, businesses that fall behind in sustainability will be in the minority in the years to come. Stay ahead of the game with sustainability to keep your profit margin high in the long run.
Conduct a Sustainability Audit
A sustainability audit is necessary for your company’s journey to sustainability. When done right, it will help you to identify inefficiencies in your operations and help increase your profits. A sustainability audit can help identify opportunities for energy conservation, waste reduction, or water preservation.
“Don’t think of a sustainability audit as a responsibility. Think of it as a fantastic opportunity for growth. Your audit will provide a clear lens through which you can scrutinize your operations and build a path forward. It is a crucial step if you want to get serious about sustainability,” explains Brandon Adcock, Co-Founder and CEO of Nugenix.
When the changes are implemented after the audit, your company will save money on utility bills and reduce its overall operating costs. The audit can also help your business to maintain its social license to operate as consumers continue to place high importance on sustainability.
Identify Areas To Improve
Your audit will help you identify which areas of your business need improvement in the sustainability department. However, you will have to decide which areas you would like to prioritize, especially if an initial cost is associated with the changes. It can be beneficial to align your priorities with your values as a company.
“No business is perfect when it comes to sustainability. There are always going to be areas to improve upon. As technology evolves, companies need to be willing to make changes as new systems are developed continuously,” states Shaun Hinklein, Head of SEO, Ramp, a company known for their line of business credit cards.
For example, if your company prides itself on employee welfare, the first issues you’ll want to address may start with your supply chain. If you are purchasing supplies from companies that use forced or child labor, cutting ties with these entities should be your first priority. Figure out who you are as a company when it comes to ethics, and use that as your guide.
Gather Data on Resource Usage and Social Impact
While your sustainability audit will focus more on the environmental impact, you should also gather data on the social impact that your resource usage has. As previously mentioned, consumers in 2023 place a high value on spending their money on environmentally and socially conscious brands, so make sure you are emphasizing social impact.
“Corporate social responsibility is a hard-edged business decision. Not because it is a nice thing to do or because people are forcing us to do it… because it is good for our business,” points out Niall Fitzerald, former CEO of Unilever.
This data should include an evaluation of your company’s social responsibility, ethical practices, and engagement with your local communities. You also want to assess employee welfare, diversity and inclusion policies, and your business’s overall impact on its community and society.
Establish Short and Long-Term Objectives
© Adobe Stock
If your company is new to sustainability, a full-out overhaul is going to be daunting and potentially expensive. This is why it can be helpful to establish short- and long-term goals for your business. Having these goals in place will help you follow through and appease your customer base and potential investors.
“Goal setting is key when taking on a major project like a sustainability overhaul. There are things that you can address immediately and things that will have to take a backseat. As long as your customers and investors know you have plans to take those steps, you can start reaping the benefits,” shares Miles Beckett, Co-Founder and CEO of Flossy.
Once you have a roadmap set, you can include your future plans toward sustainability in your marketing objectives to show your consumers that you are taking the necessary steps to implement these practices. This is especially helpful for companies that aren’t able to cover the upfront costs of a total overhaul.
Align Your Goals With Overall Business Objectives
This starts with identifying which practices are the most relevant to your business. Your audit and data on resource usage is the first step to identifying your needs, but you also need to align those needs with your business objectives.
“Who are you as a business? What defines you? These questions will help you determine which sustainability initiatives to pursue. Be true to yourself and the nature of your business and use that to your advantage, especially in marketing,” explains Maegan Griffin, Founder, CEO and nurse practitioner at Skin Pharm.
Ask questions such as “Where does your company have the biggest opportunity to contribute?” or “How can your organization make the most impact?” to better align your goals. Additionally, set yourself up for success by finding the areas where your business has the most potential to achieve significant progress and success.
Common Areas of Focus
While each business will have its own unique set of needs and requirements on the road to sustainability, there are some common areas to focus on. Product design overhaul, supply chain sourcing, and energy efficiency are some of the companies’ top concerns when increasing sustainability. These areas are always a good starting point for any business.
“There are some things that every business should be doing to practice sustainability. Whether you are a small or large operation, all companies can benefit from a few key initiatives,” says Hetal Dodeja, Senior Brand Manager of Avenue B.
Look at these common systems that frequently need improvement to get an idea of what sustainability looks like once implemented. Keep in mind, however, that these are more general ideas, and your business will have a unique set of needs or issues that need to be addressed.
Product Design Overhaul
There is no shortage of ways to overhaul product design to increase sustainability. Sustainable design is an approach to creating products and services that consider environmental, social, and economic impacts through each phase of development.
“If you are in the business of single-use products, repurposing and recycling should be a major part of your operation. Try different materials and get creative with your product design to get around the inherent wastefulness of single-use products,” suggests Mara Dumski, Chief Fragrance Experience Officer of Pura, a company known for their fragrance car diffuser.
Some examples of sustainable product design include products that are designed for reuse and recycling. This can also include products that are easy to disassemble so the parts can be repurposed for new products. This is especially important when it comes to products that have a short life cycle and will need to be repurchased time and time again.
Supply Chain Sourcing
Supply chain sourcing is one of your company’s most significant footprints. Sustainable companies ensure they are not using suppliers whose values are not in line with their own. This can include just about everything from pollution to workers’ rights to climate change.
“Businesses cannot look the other way at what happens while their product is making its way to the warehouse. Especially if they want to preach sustainability. You have to make it your business what is happening every single step of the way, from source materials to labor to transportation,” advises Matt Masiello, Chief Marketing Officer of BabyBuddha.
A sustainable supply chain must use environmentally and socially responsible practices at every stage of production and transportation of products. From raw materials to production, storage, and delivery, businesses are responsible for ensuring sustainability each step of the way.
Energy Efficiency
Energy efficiency is the practice of using less energy to provide the same product or service. This can include energy for lighting, heating, transportation, and beyond. You can become more energy efficient by conserving water and reducing, recycling, and repurposing materials. Once implemented, these practices can free up capital to invest in other areas of your company.
“Energy efficiency isn’t just about cutting costs; it’s about the responsibility towards the planet that will be left behind for future generations,” says Christian Kjaer, CEO of ElleVet Sciences.
Companies should focus on sourcing green materials, cutting operational emissions within their own operations, and developing a long-term sustainable production procedure. It is also a good practice to start utilizing energy-efficient equipment. Once you start saving money in other areas, you can reinvest that money to purchase better equipment.
Becoming More Sustainable
It has become increasingly clear that to be a successful business today, you must practice corporate social responsibility. Successful companies now look at sustainability from a point of considering how they can leverage it to have better financial returns both operationally and commercially. Don’t be late to the party, and start implementing sustainability practices today.
