Can your business be sustainable and chase profits?
Making an effort to do business more sustainably is vital to the long-term future of your business and the planet.
In this article, we’ll take a look at what makes a business sustainable, helpful sustainable business ideas that your company can pursue and ways to enact your sustainable business strategy.
What is sustainable business?
So, what is sustainable business?
Sustainable business is the concept and practice of doing business without making a negative impact on the community, the environment and society.
The main goal of your sustainable business strategy should be to make a positive impact on those areas, or at least one of them.
When a company doesn’t recognise that its operations have an effect on more than itself, it fails to take responsibility for the social inequalities, environmental degradation and climate change it causes. That’s why increasingly, business leaders are looking to build corporate social responsibility into their business operations and company culture.
So, if your company wants to create a sustainable business model, you need to consider how short-term profits may lead to long-term liabilities..
Examples of sustainability in business
The sustainable business strategy or strategies your company chooses to participate in will be unique to your organisational values and goals.
Here are some sustainable business initiatives you can start thinking about:
Use eco-friendly materials in your manufacturing, assembling and/or shipping processes to reduce carbon emissions.
Use clean energy from renewable sources, such as solar and wind, to power your facilities and lower your carbon footprint.
Sponsor local organisations related to education, housing and marginalised communities.
Why become a sustainable business?
So, why should you strive to become a sustainable business? Well, apart from anything else, sustainability initiatives can actually drive financial success.
Investors look at key business metrics to determine whether a company is worth their investment. But increasingly, investors are also looking at environmental, social and governance (ESG) metrics to decide how much of an impact a company makes with its eco-friendly practices.
Why? High ESG ratings have lower debt and equity costs, according to research.
Additionally, more than one third of customers are willing to pay more when buying from sustainable businesses. Consumers are more regularly looking at your carbon emissions, water usage, employee and board diversity, and how the organisation contributes to its community.
One example of a business which takes environmental sustainability seriously is Ikea. It achieves sustainability through both its operations and supply chain efforts. Here are some top eco-friendly standouts from Ikea’s sustainable practices in business:
It sources about half of its wood from sustainable forests.
It adheres to cotton standards that minimise water pollution.
It sources renewable energy from solar panels (with plans to sell them in the UK and other countries).
More and more consumers are paying attention to whether their favourite brands are certified as Benefit Corporations (more commonly referred to as B Corp).
A B Corp certification represents your company’s dedication to meeting high standards in accountability, supply chain practices, input material, employee benefits and more.
To earn a B Corp certification, your company needs to:
Achieve a B Impact Assessment score of 80 or above and pass a risk review to prove your high social and environmental performance.
Legally change your company’s corporate governance structure so that all stakeholders — not just shareholders — are held accountable for its practices.
Allow performance information to be measured against B Lab’s standards, and have it publicly available on your B Corp profile and B Lab’s website.
So, sustainable practices in business actually pay off, and a sustainable business model also fosters new growth opportunities.
You can meet customer expectations in terms of corporate sustainability while also providing quality products and services.
Essentially, you can do well financially by doing good environmentally. There is an overlap between chasing profit and being sustainable.
Let’s explore some ways you can reduce your environmental impact.
How can you reduce your environmental impact?
You can create a more sustainable business model in several ways. Let’s go over some strategies.
1. Analyse your problems and brainstorm objectives
The first way to spark change in your business is to define what sustainability means for your company, team, clients and overall industry.
Once you’ve defined the overarching problem areas that each group recognises, you can analyse those problems. Then, you can define objectives for how to make lasting changes.
Consider asking these questions to determine what each group sees as a priority:
Is our business attracting diverse talent?
Do we have an inclusive business culture?
How much waste is our business creating?
Are we making a negative or positive impact on the community?
Are we sponsoring any local community or environmentally focused organisations?
Are we doing everything we can to cut down greenhouse gas emissions in our supply chain? Could we use more sustainable materials and carbon neutral suppliers?
Once you know the answers, your business can start creating inclusive and eco-friendly sustainability objectives.
You can also take the SMART goals approach. This approach refers to setting goals that are specific, measurable, achievable, relevant and time-bound (aka SMART!).
The SMART approach helps you create goals that you’re highly likely to meet. This is because the goals you brainstorm through the SMART method are realistic and allow you to create manageable objectives that set you up for success.
2. Create your sustainable business strategy
Now that you have a focused mission statement, you can start aligning your processes toward creating a sustainable business model foundation.
As stated earlier, your company can do well financially if it does good environmentally. But to ensure your business is sustainable while chasing profits, you need to zero in and tailor how you manufacture, market and deliver your unique offerings.
And as a friendly reminder, taking the right eco-friendly steps may spark further profitability rather than hinder it.
If you consider the triple bottom line — or how your business’s actions affect profit, people and the planet — you can develop a sustainable business strategy that's not only environmentally friendly but also profitable.
A great strategy to follow is starting small. After all, small changes add up and eventually lead to big shifts.
Try incorporating eco-conscious office rules, such as overhead lights that automatically turn off at 9 pm to save on energy consumption. Or initiate a recycling program at your company if one doesn’t already exist. Perhaps you could offer an incentive (such as free lunch or a coffee shop gift card) for employees to take public transit, carpool or commute via bicycling or walking.
You can change external as well as internal strategies.
A Unilever study found 33% of customers want to purchase from brands that are environmentally friendly and produce sustainable goods.
Improving your marketing efforts will make the public aware of what you're up to. Your current customer base and leads will know that your business is actively trying to provide sustainable products and services — this goes a long way when attracting new customers and leads.
But before you implement your strategy, consider some additional questions:
“Will our existing customers pay a higher price if we produce our product more sustainably?” Think about placing a survey in your next newsletter to find the answer.
“Can we scale, grow and enhance our operations while also reducing our carbon emissions?” Consider consulting an energy professional to examine your goals and current energy usage to determine whether that’s possible.
Your answers to these questions are the first steps to enacting your sustainable business model.
4. Implement your sustainable business strategy and analyse the results
With your mission statement and strategy laid out, you can now move to achieve your objectives and goals.
One way to do this is by joining the World Business Council for Sustainable Development (WBCSD).
The WBCSD is a global, CEO-led community with more than 200 sustainable businesses that work together to speed the transformations needed to become nature positive and net zero. It does this by engaging sustainability leaders, decision-makers and executives to express their unique insights and obstacles they’ve dealt with.
So when you implement your strategy, ensure your problem areas remain aligned with your goals, objectives, mission statement, strategy and progress.
And if you want to see more immediate results, you can ask yourself what areas will make a quick difference and fuel your long-haul objectives.
Consider partnering with local community-based organisations or with a business at your size to boost your credibility in the nature-positive corporate realm.
Planet vs profit: Does it have to be a choice?
Now that you have an idea of how to turn your purpose into performance, you can put your sustainable business management goals into practice.
When you start meeting your objectives and accomplishing small goals along the way, you’ll find new ways to make a larger impact in a shorter time. But every business needs to start somewhere.
If results aren’t immediately apparent, not to worry. You can try different approaches to your sustainable business strategy until you find the one that works best for your company and team.
And remember — doing good by the planet and chasing profit aren’t mutually exclusive. You can do both.
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