Ever once in a while we get a new Buzz word in the business corporate world and all of a sudden it is almost forcefully inserted into every single sentence spoken within the workplace. Recent examples of such Buzz words are digital transformation, innovation and automation to name a few.
If you’ve been paying attention lately, then you probably would have noticed that one of the newest and most popular Buzz words to have recently exploded onto the business scene is “Sustainability”
What is Sustainability in Business?
In the context of business, sustainability is basically the ability to conduct business successfully regardless of the nature of said business, but without having any negative impact on the environment and/or society and to actually benefit at least one of them.
Accordingly, Sustainable businesses need to carefully examine a significant number of factors that are directly associated with the well-being of the environment and society prior to making any business decisions so as to ensure they remain complaint with sustainability goals
So how do Businesses Apply Sustainability?
Organizations simply need to include sustainability goals into their business strategy which in turn could result in any of the below example practices.
- Leveraging the usage of clean renewable energy that has no negative impact on the environment.
- Enhancing supply chain to keep greenhouse gas emissions at a low level
- Developing corporate recycling programs and policies
The above are just a few examples but there are many more methods with which business organizations can embrace sustainability and they can simply pick the methods that work best with their business model and corporate strategy
Why is it Important?
Well beyond the clear answer that it benefits society and is environmentally friendly, sustainability may actually also drive business success. Awareness surrounding sustainability has skyrocketed recently to the extent that in many case, the inclusion of sustainability into a company’s strategy has already become a condition that needs to be met by a business for investors to consider investing in it.
The ESG (Environmental, Social and Governance) metric can now be used by investors to gauge and analyze the sustainability practices of businesses. Such analysis would typically involve measuring an organization’s carbon footprint, energy and water efficiency, diversity & inclusion…etc among many other factors.
Studies have shown that organizations with positive ESG ratings typically deal with a lower cost of debt and equity and that sustainability practices have the potential to improve the overall business performance of an organization.
Embracing sustainability is becoming less of a choice and more of a critical condition for the success of an organization. Today’s Market is simply placing a significant amount of weight on sustainability and those who fail to accommodate it simply lose relevance within the market.
As such, sustainability should form an integral part of an organization’s business strategy. Failure to do so, would put an organization at a clear disadvantage when it comes to investor demand, consumer demand and talent attaction.