Nowadays we are familiar with the necessity of an eco-conscious attitude in all aspects of life as the world is coping with global warming, alarming air pollution levels and destruction of marine life. The need of a more sustainable lifestyle everywhere on the planet is imperious and business are an important factor in the accountability process, but managers and owners often fear that their investment in sustainability programmes will bring no returns or even cause loss.
The Benefits of Sustainability for Businesses
Consumers’ demands have a great impact on business strategies. Millennials are interested in ecologically-committed companies, both from a consumer and an employee perspective. Managers need to act in advance, rather than in response to their clients’ expectations.
Moreover, legislation across Asia and Europe requires environmental, social, and corporate governance transparency and these regulations will most likely be adopted in other parts of the world. Staying ahead of ecological laws attracts incentives for innovation, while simply reacting to new policies might result in high adaptation costs.
Companies working to approach eco-innovation attract investors because they prove the ability to satisfy the wishes of emerging consumers and also because they show an interest in predicting market evolution. A survey by MIT Sloan Management Review performed on 2600 managers and executives from multiple industries shows that 50% of respondents admitted having profited from sustainability programs after changing 3 or 4 business model elements, while 37% of those changing just 1 business element also grew their revenues.
Moreover, public funds are already helping companies to include environmental strategies in business planning. A recent report from International Renewable Energy Agency also indicated that it is equally, or even, more cost-effective to use eco-friendly energy for producing electricity than it is burn fossil fuels.
How to Embrace Sustainability
- Understand the Concept
The World Council for Economic Development defines sustainable development as a process which “meets the needs of the present without compromising the ability of future generations to meet their own needs.” That means developing or restructuring businesses in a sustainable way means managing your finances with the health of ecosystems and communities in mind.
- Look for Support
Managers of medium and small businesses might feel a plan for sustainability and dedicated financial resources are out of their reach. However, local NGO’s and governmental programs can help with counseling, funding, and implementation of sustainable practices.
The Australian Government offers many environmental grants and awards for businesses, adapted to different territories.
- Get inspired…
International brands have adopted earth-friendly practices, as they understood that resource scarcity and the growing costs of energy can lead to future competitive failure.
According to this well documented McKinsey study, manufacturers from different industries are investing in the sustainability of their suppliers( Nike, Mars, Hershey) to ensure the longevity of their company, while others like Puma managed to reduce energy consumption and waste.
- …But Adapt to Local Markets
Unilever came out with innovative washing products which reduced the amount of liquid needed for washing and rinsing clothing or dishes, designed for drought-affected countries like India or Brazil. Overall, their Sustainable Living brands showed a faster growth rate than the rest of the products, because each of them takes into consideration local environmental needs.
- Work on the Corporate Culture
Sustainability needs to be part of your company’s set of values and work policies so that managers internalize the concept and apply it to their decisions and workflow design. Every small action, like e-waste minimization, establishing collection points for recyclable objects, educating about energy saving or involving staff in ecological activities will finally result in savings for the company and in an improved public image. Just don’t forget to balance eco-responsibilities with incentives like giving bonuses for the most earth-friendly strategies.
How to Implement Sustainability
- Pay attention to your Supply Chain
You are probably familiar with scandals of recent years involving companies that have been indifferent to human exploitation involved in manufacturing cheap products or massive pollution resulted from their production processes. Modern companies have to acknowledge the sources of their merchandise and raw materials and be transparent with their consumers.
Further on, businesses are now expected to take action in assuring a green supply chain. For example, sports brand Nike rates its suppliers based on several metrics and one of them is sustainability, while Wall-Mart takes into account greenhouse levels and water use per ton of food produced when it chooses producers.
- Adjust Workflows and Procedures
Could you switch to a renewable source of energy? Do you need all your workers in the office or some could work from home? For those who come at the office, can you offer a work-from-home day to reduce transportation emissions? Could you switch to a small, less resource-draining location? Are there locally produced raw materials you could use instead of importing them? As IBM Founder Thomas J. Watson puts it: “The ability to ask the right question is more than half the battle of finding the answer.”
- Watch your Resources Management
What are the environmental and social needs of the premises of your production area? Your business might be able to make use of other enterprises’ waste, use wind, solar or geothermal energy, and reduce water consumption and offer jobs to disadvantaged communities or social categories. But it’s also a manager’s task to implement positive changes with an eye on the bottom line.
- Start with Clear Goals
Decide on short-term and long-term objectives and define them with numbers. How much can you lower your greenhouse emissions next year? How many tons of packaging are you able to eliminate from your final products? Can you use 35% less energy in the next three years? Don’t just state intentions.
- Evaluate your Efforts
Last, but not the least, you sustainability efforts need permanent and honest assessment. Greenwashing practices bring major sales drops when they come to surface – everybody associates now the Volkswagen brand with its emission testing cheating. Make thorough and clear evaluations and always separate data about your achievements from data about your predictions. Do you plan to save 50% of water and energy used in the production process in the next five years? Then tell your shareholders, clients, and employees what you manage to save each year.
All in all, adopting sustainable practices increases profitability and helps businesses develop on multiple levels. Eco-innovative companies stay relevant both to their investors and young consumers, while they also manage to reduce production costs, attract positive public attention and gain the support of skilled young workforce with a higher interest for ethical values.