Historically, traditional business models have prioritized maximizing profit over any other parameter without much concern about its impact on the community. Currently, businesses are entering a reality where environmental and social awareness predominates.
Corporate sustainability is vital for turning a business into an actual change agent. Its objective is to minimize the adverse effects on ecology, demography, and finances that our economic activity may cause.
What Is Business Sustainability?
The definition of sustainability refers to implementing a business model that does not harm future generations through its activity. In business, this definition applies to expense management and company policy focuses on reducing “collateral damage.”
Organizations of all kinds and from various industries often generate more harmful effects on communities and the ecosystem than the solutions they can provide through their products or services. However, thanks to the generational change of recent decades, more and more users and customers are demanding greater awareness from companies, which is why businesses have been integrating the concept of sustainability into their strategies.
Sustainability In Companies
Consequently, there is an increasing need for organizations to align their values and culture with the new priorities of the vast majority of the population. The type of sustainability that is defended can range from social to financial and environmental.
Such is the importance of this concept within business news that, according to Forbes magazine in 2018, more than 80% of consumers positively value brands committed to sustainability. Those that contribute or are concerned with reducing the environmental impact of their operations.
Innovation And Pandemic
The global impact of COVID-19 forced several companies to resort to innovation in terms of sourcing materials. This is primarily due to the sudden closure of borders and the difficulty of accessing specific material distribution flows. Although before the pandemic, the main focus was on efficiency today, and due to the months of the pandemic, it is focused on diversity and redundancy.
The COVID-19 crisis has also rethought the role of companies in society in terms of responsibility and as a critical agent in ensuring an inclusive recovery in a post-COVID-19 context, says the entity in the report concerning sustainability in business.
Steps Towards Business Sustainability
Build and Strengthen Trust
More than a trend, a reality. Directive 2014/95 already provided a future obligation in the transparency of our business activity concerning sustainability.
Non-financial disclosure is essential to managing the transition to a sustainable global economy that combines long-term profitability with social justice and environmental protection.
Especially in what refers to the field of Human Resources, since building a solid base of arguments will strengthen our brand quality in the face of the employee. Working on trust is essential, and teaching, in which we beat a strategy focused only on saying what we do.
Focus on Climate Concerns
Climate risk is one of the leading global challenges this year. According to the United Nations, this year will be essential to set the foundations to follow in the fight against climate change. After the celebration of the COPE26 (UN Climate Change Conference) in Glasgow, this year will be full of events that will define the companies’ strategy for the following years.
Integrate Innovation Into Your Strategy
Once the two previous points are clear, it is time to think about strategies that respect them. On the one hand, emphasis can be placed on the source of resources, opting for renewable energy sources until achieving carbon neutrality. However, a business’s relationship with its surroundings is also meaningful. This is transmitted through improving the living conditions of its workers and, therefore, of its community through fair wages.
On the other hand, integrating a circular economy model makes it possible to reduce the consumption of natural resources and waste production. For example, working with recycled materials or materials with a minimal pollution footprint.
Benefits of Sustainability
If we conceive the business reality as an activity directed towards efficiency, it isn’t easy to find a place for sustainability. However, the benefits provided by a strategy focused on business sustainability can mark a before and after in our business.
However, a sustainability strategy adds exceptional value to our business. In this way, a company that cares about this strategy will have a series of economic, social, and environmental assets that others will not have.
Positively Impact Sales
Users are increasingly demanding, thanks to the wide variety of offers depending on which products. Therefore, a sustainability strategy can directly impact sales, mainly thanks to the brand reputation it builds. On the other hand, a study by Harvard University states that the sales of sustainable products increase six times more than those of a traditional company.
Improve Employer Branding
Committing to waste reduction and being transparent about progress helps build credibility and trust-based relationships with customers, partners, and employees. Sustainability in business is a source of values and, therefore, of competitive advantage when it comes to standing out among the companies in the sector.
On the other hand, in the current era, and in the same way with Corporate Social Responsibility, a sustainability strategy is vital for clients.
Avoid Legal Hassles
Opting for environmentally responsible practices helps companies anticipate possible future legal regulations. With more and more countries and regions pushing new environmentally friendly restrictions, this reduces operational risks and can translate into a competitive advantage.
Types of Business Sustainability
The three types of sustainability in business, or the three pillars of sustainability, ultimately make up the so-called “triple impact companies.”
Not all projects have models likely to fall into this category. However, private organizations can rely on at least one of these concepts to optimize their operations and contribute positively to the well-being of workers, consumers, and the environment.
This type of methodology is undoubtedly the best known. It refers to the responsible interaction between companies with the environment to avoid the depletion or degradation of natural resources. All this is to preserve the environment in the long term.
Its objective is to promote and guarantee economic growth without its activity having repercussions on the ecosystem in which it operates. Innovation is a fundamental element of this strategy.
The concept of business sustainability-oriented to the social is accepted and conceptualized by the United Nations Organization as the ability to identify and manage the effects of private activity (whether positive or negative) on people.
Directly or indirectly, private activities impact what happens to workers, clients, and local communities.
It is possible to define economic sustainability as the ability of companies to start, develop and maintain their operations within a range of stability in the medium and long term. When we refer to human resources, this means having a low turnover rate, a high ROI, and the highest possible productivity.
We understand economic sustainability as a balance between the needs of the human being and how he satisfies them and achieves his business objectives without damaging the ecosystem.
Also Read: Four Types Of Employees In Every Office
Objectives of Sustainable Companies
There are several ways to apply this element within companies. One example of sustainability is the search for or creation of alternative mechanisms that reduce the generation of rights in the production chain.
With the rise of this movement, in 2015, the United Nations Organization adopted a set of objectives to be met globally. Each of these goals has its particular purposes, and the year 2030 is the deadline to be achieved.
Sustainable Development Goals
- End of poverty SDG: It is the main objective of the Sustainable Development program. It aims to put an end to it. Poverty in all its forms around the world.
- Zero Hunger SDG: Almost 10% of the world’s population suffers from hunger, about 10 million people in one year and about 60 million in five years. If estimates continue, the number will exceed 840 million people by 2030.
- Health and well-being SDG: After the COVID-19 health crisis, the world’s governments are focusing on guaranteeing a healthy life and promoting well-being for all ages.
- Quality Education SDG: This sustainable development goal focuses, above all, on ensuring inclusive, equitable, and quality education throughout life and for all. It also places particular emphasis on equal learning opportunities.
- SDG on Gender Equality: The fifth sustainable development goal focused on achieving equality between all genders and the empowerment of women and girls.
- Clean Water and Sanitation SDG: One out of every three people does not have access to safe drinking water. Therefore, one of the sustainable development goals for this decade is to guarantee the availability of water and its sustainable management and sanitation for all.
- Affordable and clean energy SDG: Energy sources are increasingly accessible and sustainable. Although access to electricity in the poorest countries is accelerating and renewable energy is doing very well, there are still 3 billion people who need access to clean and safe energy sources.
- SDGs on Decent Work and Economic Growth: Before the pandemic, one in five countries was already expected to see their per capita income decline or stagnate. For this reason, after the passage of COVID-19, it is a priority to promote inclusive economic growth and, above all, employment and decent work for all. In this way, business sustainability becomes a key element to take care of.
- SDG on Water, industry, innovation, and infrastructure: It is essential to introduce and promote new technologies focused on innovation and sustainability to efficiently allow international trade and production to use the resources within their reach.
- SDG to Reduce Inequalities: There is a plan to achieve the sustainable development goals, but it is also a priority to ensure that no country or population is left behind on the path to a more sustainable world. Therefore, this section is intended to assist those vulnerable countries that need help to respond to the impact and consequences of COVID-19.
- SDG of Sustainable Cities and Communities: The role of cities in the new world order is unquestionable. By 2030, 60% of the population will reside in cities. Cities account for 70% of CO2 emissions, so it is vital to set an urbanization plan that is inclusive, safe, resilient, and respectful of the surrounding ecosystem as a sustainable development objective.
- SDG on Responsible Production and Consumption: Countries must find a way to ensure that the production of food and products meets the minimum standards of business sustainability. This means doing more and doing better but using fewer resources. For this reason, it is an objective of sustainable development to decouple the economic growth of a country or a company at the cost of environmental degradation.
- Climate Action SDG: Adopting urgent measures to combat climate change is also one of the priorities in the 2030 plan. The effects of this phenomenon have already been seen in recent years since this decade has been the hottest registered.
- Underwater Life SDG: Another sustainable development goal is to respect and understand that the ocean is a source of life for human beings. Therefore, correctly and sustainably managing this resource is vital in this new decade.
- SDG of Life of terrestrial ecosystems: Another of the main objectives in the plan for sustainable development is to stop and reverse the degradation of terrestrial biodiversity. Therefore, one of the world’s concerns is achieving sustainable management of forests, combating desertification, and preventing the deterioration of the planet’s biodiversity.
- Peace, Justice, and Strong Institutions SDG: Over the years, the number of conflicts has increased, as has the reputation of government institutions. But on the other hand, more than 70 million people worldwide have had to move from their homes, fleeing due to wars or other armed and political conflicts.
- SDG of Partnerships to achieve the goals: All these sustainable development goals can be achieved through international cooperation. For this reason, having a solid alliance is vital for many countries to recover from the passage of COVID-19 and even from their situation before the pandemic.
Business Sustainability Indicators
As we have seen in previous articles, KPIs (key performance indicators) or key indicators are valuable instruments in human resources that, among other things, help us measure the performance of employees and are vital in performance evaluations.
But in addition to this crucial role, KPIs are also essential when implementing a sustainability plan. If you are considering implementing resource conservation strategies and do not know where to start, you can start by considering these indicators:
Environmental Sustainability Indicators
- Effective use of natural resources.
- Measurement of the depletion of resources and raw materials.
- Minimize the use of materials and products that are harmful to the environment.
- Prevention of negative impacts on ecosystems.
- Production and use of environmentally friendly products.
Social Sustainability Indicators
- Percentage of employees who consider that the company acts responsibly.
- Several full-time employees are dedicated to social investment projects.
- Humanitarian and nonprofit organizations raised funds.
- Percentage of operating income dedicated to social contribution.
- Salaries, contracts, and benefits for employees.
- Donations and other social expenses.
- Total investment in the community.
- Satisfaction, retention, customer loyalty.
- Employee satisfaction, competence, and commitment.
Financial Sustainability Indicators
- Company balance sheet.
- Stock prices.
- Occupational risk management.
- Accounting policies.
- Passive and active expenses.
- Budget evaluation.
Corporate sustainability is vital to contribute to the preservation of the environment and the communities where the organizations are inserted. It is also a fundamental arm for the health of companies, the improvement of the professional life of employees, and, in addition, it brings significant benefits to the relationship with consumers and users.