Sustainability is an integral part of every business. Companies are considering sustainability as a competitive advantage, and 64% of executives agree to this.
As a business approach, sustainability can create long-term value for the organization. It also provides a competitive advantage in the ecological, social, and economic environment where the business operates.
Becoming a sustainable business then helps the organization increase its corporate social responsibility. Currently, PR and good intentions aren’t enough.
In order to do this, companies must first know the gap and bridge the gap. Organizations must incorporate sustainable practices into your business model and ensure that this is more than just a competitive advantage. Aside from this, businesses are also recommended to do the following:
Strategic Sustainable Practices
Organizations must commit and prioritize sustainable practices in the company. One of the best examples is Toyota. The company is known for hybrid engines, but these are dependent on rare earth minerals. Nonetheless, as they aligned their business strategies with sustainable practices, the company started to develop alternative motor technologies that have minimal dependence on earth minerals.
The commitment is not just on the practices but making sure that these efforts are paving the way to a new business model that, in the long run, will benefit the company.
Compliance is Key
The majority of the organizations consider sustainability as a competitive advantage, especially now that consumers are looking closely into their purchasing and consumption habits. However, organizations are encouraged to comply with laws first before looking at the strategies as a competitive advantage.
Human rights, energy-efficient production, and sustainable waste management are critical for all stakeholders. Studies have shown that 44% of investors divest from companies that have poor sustainable performance.
Become More Proactive
Businesses have shifted their approach from functional to integrated. The integrated approach is due to the fact that governments, consumer markets, and investors are increasingly pushing for sustainable development.
Companies should become more proactive, such as investing more in socially responsible practices, increasing awareness of the impact of the business to the stakeholders, and aligning the goals of the organization with that of the employees.
Employees want to be proud of the companies they work for. Consumers want to be proud of the brands they consume. These consciousness among the stakeholders are critical and must be addressed directly in your sustainable business strategies.
Transparency is critical in sustainable business. Data and information shared with and to the stakeholders are crucial in order for your business to operate in an open environment where the stakeholders will have to weigh in and assess business performance.
Constant and open communication with stakeholders is the key to sufficient transparency. Disclosing accurate, precise, and factual information is critical to ensure that the company and the stakeholders do their part of a more sustainable organization.
The board of directors of the organization must be engaged and active in embracing sustainable practices in the company. According to a survey conducted by MIT/BCG, 86% of the board should be critical collaborators for effective, sustainable practices with stakeholders.
Executives are also expected to collaborate in the process and implementation of vital sustainable practices. This is critical to ensure that the methods are successfully implemented and set throughout the organization, especially the bottom line.
The target market and consumers are becoming more aware of the importance of sustainable consumption. As such, companies should walk their talk and show data-driven results for them to present the organization as a sustainable business for all stakeholders.
This is easier said than done. However, with research, practical implementation, and proper consultation, any company can become sustainable and, eventually, become leaders of sustainable practices in their industry.