As companies face to adopt sustainable practices, business leaders are expected to invest more in their sustainability efforts.
While there are a variety of business strategies, such as environmental, social and governance (ESG), and corporate social responsibility (CSR), business leaders need to carefully consider their goals and priorities before deciding where to begin on their journeys to corporate sustainability.
Let’s dive into how corporate sustainability differs from other sustainable models, what it looks like at a company and how it impacts business success.
Corporate Sustainability and Corporate Social Responsibility
Corporate sustainability is commonly confused with CSR, as the two do share a similar business model. However, corporate sustainability and CSR are not synonymous.
In CSR, companies strive to contribute positively to society through charitable acts and philanthropy. While CSR focuses on addressing social and ethical responsibilities, corporate sustainability takes a more comprehensive approach, encompassing environmental, social and economic aspects.
Several other established concepts fall within the context of corporate sustainability, such as stakeholder theory and sustainable development. What sets corporate sustainability apart is it goes beyond simply being socially responsible – it embraces a transformative mindset that redefines how businesses operate in the long term.
How Corporate Sustainability Shows Up
You’ve likely heard of the three P’s – people, planet and profit – as the pillars of corporate sustainability. These show up in corporate strategies that fall into social, environmental and economic categories.
If you want to pursue brand sustainability, you must look at areas where the transformation will have the greatest impact. Analyze how the three Ps align with your company’s vision and mission. As you begin to re-envision your company, you can start implementing sustainability approaches into your decision-making processes. Prioritize them and plan for mitigation strategies.
Environmental sustainability initiatives
Businesses can implement sustainable resource practices such as conservation, recycling and waste reduction. For example, Amazon implemented its Frustration-Free Packaging (FFP) program to reinvent the packaging experience by reducing and optimizing packaging waste. The popularity of sustainable packaging is increasing, and consumers are willing to pay more for products that align with their own sustainability standards.
Companies can strive to minimize their greenhouse gas emissions by implementing energy-efficient practices, adopting renewable energy sources and exploring innovative technologies that reduce carbon footprints. Additionally, they can focus on minimizing pollution and other harmful impacts on ecosystems.
These are only a few ways a company can start making a positive environmental impact. It doesn’t matter how you do it, but it is important to start. And remember, it must be shown transparently and not hidden in greenwashing.
Social sustainability efforts
The success of a company relies on its employees, customers and stakeholders; therefore, social responsibility should hold equal importance to environmental sustainability.
Companies that demonstrate social sustainability focus on the wellbeing of their employees by providing more flexible work schedules, family-leave benefits and opportunities for continuing education and personal development. For example, Netflix offers paid maternity leave of 52 weeks for its salaried employees, including birth and adoptive parents of any gender. While not all companies are in a position to be so generous, many employees will appreciate more work-from-home days or flexible hours.
Social sustainability extends beyond the company’s employees. For example, a company could pay its own employees a generous salary but if the company’s supply chain includes a business that uses unfair labor practices, then that’s not fully practicing social sustainability.
Other initiatives include a company’s diversity, equity and inclusion (DEI) policies and how it gives back to the community. It is important that any social initiatives a company undertakes be aligned with the company’s values.
Economic sustainability strategies
Economic sustainability does not mean simply maximizing profits; economic sustainability is about creating an effective economic plan that balances the other two pillars, social and environmental sustainability, by implementing responsible financial practices.
Economic sustainability initiatives may involve substantial upfront costs, such as investing in renewable energy technology or adopting sustainable supply chains. Large-scale investments will show significant results over time. Add small-scale investments to the large-scale investments, and you will see a significant positive effect on a company’s financial health.
Research has demonstrated that sustainable investments can boost long-term profits through increased energy savings, improved operational efficiency, and increased sales. In fact, studies indicate that investors expect higher returns from sustainable investments vs. traditional investments.
An effective economic plan balances the company’s sustainability initiatives and profit. More importantly, it makes companies accountable to long-term sustainable goals.
Benefits of Corporate Sustainability
Corporate sustainability initiatives enhance a company’s brand and reputation. As more consumers and investors view sustainable initiatives as essential to building brand trust, corporate sustainability becomes essential. Businesses that ignore corporate sustainability rankings risk falling to the bottom of their industry. A positive reputation among consumers translates into increased success and profitability.
Pursuing corporate sustainability helps mitigate risks that come from changes in market trends and consumer demands. The best practices companies are already doing include sourcing resources through fair trade programs, reducing waste through recycling and upcycling and investing in renewable energy sources. In a recent study, 80% of business leaders shared sustainability helped their organization optimize and reduce costs.
Corporate sustainability is also attractive for employees. In fact, people searching for jobs now consider an employer’s environmental and social initiatives. Some will even accept a lower salary to work for sustainable or socially responsible organizations.
Let’s start a conversation about corporate sustainability. Find some examples of companies that are implementing corporate sustainability initiatives and evaluate their overall impact on the business. Need help developing a pathway to improved corporate sustainability and communicating the vision to your team? Connect with us at Kiterocket.