In recent years, sustainability has evolved into a critical component of business strategy and operations. As concerns about environmental and social challenges continue to grow, sustainability offers solutions for organizations to navigate dynamic business landscapes. But what is the importance of sustainability in business? What does it look like in practice and how can businesses embrace and implement it into their core values? In this article, we’ll answer these questions as well as highlight the impacts of sustainability in business for future generations.
What Does Sustainability in Business Look Like?
Corporate sustainability refers to the practice of conducting operations and making decisions through what is known as the three “pillars” of sustainability: environmental, social, and governance (ESG). It involves achieving a balance between short-term profitability goals and long-term negative impacts on the world outside the business while at the same time ensuring positive organizational performance and growth.
Examples of how some businesses might engage in more sustainable practices include:
- Minimizing their environmental footprint by reducing waste and conserving resources.
- Integrating more eco-friendly material in the production or manufacturing processes.
- Ensuring fair labor practices and promoting diversity, equity, and inclusion within the company.
- Generating profits while considering the cost of environmental and social impacts.
Implementing some of these practical sustainability practices into regular business operations helps organizations who are looking to embrace sustainability as a part of their core values and business models be more successful in doing so.
Why Sustainability is Important in Business
Sustainability is a key component to businesses because it empowers organizations to identify and overcome challenges that are posed from different sources, such as environmental and social issues. For example, climate change is one of the most pressing global threats posed in this generation. According to an IBM Institute for Business Value Survey, 62% of consumers are willing to change their purchasing habits to reduce environmental impact. By adopting sustainable practices, organizations can address behavioral consumer shifts and reduce their carbon footprint to slow down climate change while contributing to a more stable environmental future.
But sustainability in business goes beyond focusing on optimizing the well-being of the external world around the organization; it also helps optimize processes within the organization to operate better. Sustainability encourages responsible resource management. This helps reduce and mitigate wasteful spending while streamlining processes to be more efficient. This makes a business more attractive to customers seeking quality products and services and investors interested in positive long-term growth in a business.
Sustainability can often lead to innovation. Businesses that seek to reduce waste, energy consumption, and environmental impact often discover more efficient processes and products, which can translate into cost savings and a competitive edge.
Benefits of Sustainability in Business
The adoption of sustainable practices can yield the potential for a variety of benefits, including:
- Cost Reduction: Sustainable practices can lead to reduced energy consumption, lower waste disposal costs, and more efficient use of resources, resulting in significant cost savings.
- Increased Revenue: Sustainability can open new markets and customer segments. Consumers are shifting their spending toward products with ESG-related claims, leading to potential revenue growth.
- Attracting and Retaining Talent: According to IBM’s “Sustainability at a Turning Point” Research Brief, about 70% of employees (or potential employees) report that sustainability programs make employers more appealing, whether in accepting an offer or remaining at a company.
- Resilience: Sustainable businesses who are customer-focused understand the changing needs of their audience better and have a more efficient approach to overcoming shifts in their landscape. Reduced procedural inefficiencies mean organizations can offer solutions and services more affordably and faster.
- Brand Loyalty: Consumers tend to be more loyal to brands that share their values. The Capgemini Research Institute found that 77% of executives in consumer products and retail organizations say that sustainability leads to increases in customer loyalty.
Making an Impact for Future Generations
Perhaps the most compelling reason for businesses to embrace sustainability is the profound impact it can have on future generations. The decisions organizations make today will potentially mitigate the negative environmental and social challenges for future generations to face.
Sustainability is not just a passing trend but a fundamental necessity for businesses in the modern world for business strategy and decision-making. This means organizations need the right corporate sustainability professionals with the skills and knowledge required to implement sustainable practices while fostering growth and profitability.
Vanderbilt University Owen Graduate School of Management and the University of British Columbia Sauder School of Business have partnered to offer a fully online certificate program, the Global Certificate in Corporate Sustainability. This program is designed to empower current and aspiring business leaders to develop the skills and knowledge to turn sustainability challenges into business breakthroughs and create innovation for tomorrow’s sustainable business landscape.
Sustainability professionals of tomorrow can help organizations navigate the shifts in their industry landscape to make a difference in the world and on the bottom line. Learn more about the program and join us for our next cohort by requesting more information or speaking with a program representative at 800.983.6485.