How to Embed Sustainability in Your Business Strategy
Sustainability has evolved from a mere buzzword to a critical element for success in today’s dynamic business landscape. Everyone from corporate leaders and investors to entry-level employees can recognize the need to incorporate environmental, social, and governance (ESG) considerations into core business strategies and processes.
Integrating sustainability into business operations requires some fundamental changes at the company culture level. These six strategies provide guidance on how to go about it.
Identify Existing Issues
The journey to seamlessly embedding sustainability in business begins with a comprehensive review of current practices to identify improvement areas. This involves researching the environmental impact of the company’s operations along with what policies are in place to address them.
Identifying specific sustainability gaps and lapses in everyday operations can help companies narrow their efforts on areas with the most profound impacts. It also enables them to prioritize resources better to achieve their eco-friendly goals and maintain a healthy bottom line.
Set Realistic and Specific Targets
Clearly define what the business’s sustainable strategy aims to achieve. These objectives must be realistic and attainable over a given period.
They must also be specific and publicized. Setting vague goals is unlikely to motivate action on a business-wide scale. Defined goals keep the company focused and accountable.
Generate a Data-Driven Action Plan
The operative word here is ‘action,’ meaning there shouldn’t be any time spent on needless back and forths. Create a budget to implement the sustainable strategy, set a timeline, and assign a person to hold answerable.
Sustainability is a complex topic, which is why many Fortune 500 companies have created a Chief Sustainability Officer position to oversee their efforts. A PwC survey of 1,640 companies showed the number of CSOs hired between 2020 and 2021 was nearly the same as the figures from the last eight years.
Incorporate Sustainability into the Corporate Mission
Making environmental consciousness a core business value can help introduce and enforce the concept in the company culture. Even established brands can benefit from updating their mission statements to include their commitments to sustainability.
It’s equally important to begin practicing these principles from the top. Corporate leadership is crucial in driving an eco-friendly culture by incorporating practices into their own routines and decision-making. They must also educate employees on the significance of sustainability and its relevance to their work.
- Collaborate Across the Value Chain
Collaborate with vendors, financiers, and even customers to amplify sustainability efforts. For example, businesses can partner with suppliers who share similar values about minimizing environmental impact. They can also engage with local communities to promote cooperation for collective progress.
- Define Milestones and Track Progress
Corporate sustainability is an ongoing endeavor, one that requires periodic review to ensure current strategies align with set goals.
Keep customers and other stakeholders informed on milestones achieved. This demonstrates the company’s commitment to following sustainable practices.
Benefits of Integrating Sustainability in Business
Implementing greener policies and procedures in business offers several long-term advantages. These include:
Roughly 55% of consumers are willing to spend more to buy sustainable products. Nearly 40% say they’ll boycott a business that doesn’t prioritize eco-friendly practices. Being an eco-conscious business can boost brand awareness and attract more potential customers.
As calls for environmentally friendly practices in business gain traction, it’s likely that governments will continue to expand regulations on sustainable development goals. For example, the EU began setting up the framework for the Corporate Sustainability Reporting Directive (CSRD) initiative in 2023 to enforce specific ESG requirements for intending businesses.
Today’s investors are more interested in sustainable investing funds and projects than ever. According to a recent Gallup study, 7 in 10 investors would include green investments as part of their 401(k) if the option was made available.
Adopting a sustainable business model can reduce operating costs in the long run. For example, replacing office appliances with Energy Star-certified systems can cut energy use by up to 60%, which means lower utility costs.
Employment seekers are starting to factor in eco-consciousness when deciding where to work. According to an IBM survey, 71% of job seekers and employees want to work for sustainable and socially responsible companies.
Embed Sustainability in Business
Integrating sustainability into the fabric of business operations is now a strategic imperative among forward-looking companies. Looming regulatory changes and seismic shifts in market sentiment toward green practices mean businesses must foster a culture that values environmental responsibility and drives positive impact.