Previous decades have seen businesses taking less interest in sustainability. But today, many more organizations are integrating their corporate social responsibility into every aspect of the company’s sustainable strategy.
But what do sustainable business strategies aim to achieve? Why are they important? And what benefits do they have to the business and the environment? We will answer all these questions to discover how to build a sustainable business strategy. We will begin with a definition.
What Is A Sustainable Business Strategy?
Business models today incorporate more responsibility than ever before. Beyond profits, more prominent and small organizations are attempting to use sustainable business practices for environmental and social responsibility to the planet and employees.
A sustainable business strategy interweaves environmental, social, and economic considerations into an organization’s practices, policies, and processes. This strategy ensures long-term value for the company and the employees it is composed of by protecting and sustaining natural resources, working toward an output of net zero emissions.
The Value Of Sustainable Business Practices
Environmental and social issues can seem at odds with business, as generating maximum profits is sometimes challenging with ethics as the focus. However, being mindful of social issues ensures high employee experience levels and team cohesion. Taking part in awareness-raising projects for environmental problems can also be used as a team-building exercise that improves employee productivity and gives a competitive advantage.
A recent Gartner study found that customer engagement is at the heart of corporate incentives to engage with sustainability issues. Gartner found that in 2020 63% of sustainable companies felt that customers were their most powerful reason for sustainability actions. As a result of this sustainability drive, 92% of organizations in the study said they are increasing spending on sustainability as part of their company strategy.
Why Sustainable Business Strategies Are Important
Business has a huge impact on the environment and many social implications. Sustainability initiatives to reach zero emissions, such as solar panels or glass, help achieve a company’s commitment to preserving the environment. But renewable energy efficiency doesn’t just save the environment; it also reduces the operational costs of organizational infrastructure.
Advertising long-term sustainability targets to tackle climate change and taking a stand on this issue enhances a company’s image. Customers are at the heart of all business practices, so a sustainable business strategy can help ensure existing customers keep returning and new customers feel a sustainable company is attractive to them and use their services.
The Benefits of Launching A Sustainable Business Strategy
The benefits of using a sustainable business strategy are multi-faceted. The first of these benefits involves building communities. These benefits affect employees, the organization, and many environmental and social factors of the planet we share.
Sustainable business strategies can help nurture positive internal communities and make links with existing external ones. Efforts to conserve the environment and work toward addressing social inequalities can help large enterprises form relationships with charities, boosting morale and improving their image.
Such partnerships with altruistic agencies can create a sustainable and vibrant work culture within an environment that is:
- Lively and inclusive for everyone.
- A place where employees and customers feel safe.
- Carbon emissions neutral.
- Where staff and customer disadvantages are supported.
- Where vulnerable people are empowered and protected.
- Where people feel proud to work.
This vision of a sustainable business is positive for the environment, employees, and customers. Such a culture also improves financial performance.
2. Improve Financial Performance
It is an easy argument to suggest that any sustainability strategy will reduce profits as it is not focused on increasing revenue. However, this is not the case. Sustainable business strategies lead to streamlined processes as part of strategic planning. Waste management increases financial waste reduction as part of a culture of turning off lights and not printing off documents unless it is essential.
These actions have a knock-on effect from an environmental and a business perspective. Key stakeholders feel proud of a company when it is reaching sustainability goals. And this translates into investments, increasing shareholder value chain, and boosting business value.
There is also a competitive advantage when businesses operate this way, as higher investment improves company image and confidence within the market.
3. Enhance Company Culture
Business leaders often emphasize the environmental aspects of a sustainability strategy and forget that they also need to include social factors. A positive company culture supports and empowers more vulnerable or differently-abled employees and educates all employees on a variety of social needs. All employees are equipped with the knowledge to support and empower differently-abled customers, improving customer satisfaction.
Orienting company culture toward environmental issues also helps them comply with government regulations. These are legal obligations designed to protect a state’s environmental and social fabric. By voluntarily incorporating a sustainability strategy into a company’s culture, employees will already have received training in achieving environmental government regulations as part of strategic planning.
Sustainable strategies can also improve employee well-being, leading to improved employee retention.
4. Protect The Environment
Sustainability issues’ number one concern is to protect the environment, no matter what positive implications this might have for a business. Companies can use new technologies to engage in sustainability activities, such as providing lightning-fast Electric Vehicle (EV) charging points charged by solar panels on company buildings.
Other ways to protect the environment with sustainable business strategies are renewably powered delivery robots to cut CO2 and replacing harmful plastics like Styrofoam with sustainable packaging. Companies can also improve energy efficiency by enrolling in Energy as a Service (EaaS) programs which support the installation of renewable energy sources and only charge for energy on units used, rather than a rolling monthly amount.
These initiatives can help reduce environmental degradation as part of sustainable practices.
5 Key Steps To Planning A Sustainable Business Strategy
Sustainable business strategies are significant undertakings requiring detailed planning and ongoing review to achieve goals. The first step is to create goals that staff can easily action.
- Implement Actionable Goals
At the core of successful sustainability strategies are actionable goals. Achieving this involves asking what resources a company has, what they want to achieve, and the time to complete it. If organizations do not fulfill plans, they can be reviewed and rewritten. But without actionable goals in the first place, a sustainable business strategy will have no direction and will not succeed.
- Assess For Operational Weaknesses
An excellent place to begin when planning a sustainable business strategy is to identify operational weaknesses in your business. How much water is wasted by employees when they use the restroom? What food packaging does the office cafeteria use, and could catering staff take steps to replace this with an eco-friendly alternative? Could solar panels allow the entire office building to be self-sufficient for electricity usage?
Assessing these weaknesses creates a foundation for understanding what the organization can do to reduce the impact on the environment and the operation costs of a company’s infrastructure.
- Leverage Executive and Employee Support
Successful sustainable strategies have the support of high-level executives and all employees. Companies face an uphill battle without executive support to change the culture toward sustainable outcomes.
Presenting the business case for sustainable business strategies to executives using visualization and sustainability reports is an effective way of accomplishing this. When executives understand the benefits of sustainable business strategies and how they can begin creating long-term value for external stakeholders, company culture can change from the top down.
- Ensure Organizational Transparency
Reputational risks exist when customers feel that a company is engaging in a sustainable business strategy for the wrong reasons. PR and reputation improvement alone are not reasons for sustainable business strategies. Publishing monthly or annual sustainability reports and consumption patterns show the public that a company is delivering on its promise to be sustainable with a positive environmental impact.
- Communicate The Value and Benefits of The Strategy
Maintaining the momentum of sustainable business strategies can be challenging as enthusiasm can taper off with time. Communicating the value and benefits of sustainability practices should be an ongoing HR and PR collaboration to ensure that employees and customers are aware that the strategy is for life, not just a temporary measure for short-term gain.
Putting Sustainable Business Models Into Action
Sustainable business models depend on changes in culture. It is essential to ensure that executives fully understand the values, objectives and what part the sustainable business model plays in the company’s vision before implementing it.
Every organization operates differently depending on size and type, influencing operations and processes. Companies must carry out sustainable business models like successful business models in the past. Learn from past successes and incorporate sustainability practices into the model in the same way you would any other values-based business model.
Companies can use five steps to ensure sustainable business practice success:
- Step 1: Roll out the plan and create and communicate new practices and policies.
- Step 2: Utilise a sustainability measuring tool service to measure your sustainability level.
- Step 3: Analyse sustainable business strategy results against benchmarks.
- Step 4: Praise staff and communicate achievements.
- Step 5: Become sustainability certified or continue to review the strategy.
Following these steps ensures a structured approach to actioning a sustainable business strategy.
Building Sustainable Strategies That Last
Other factors to consider to increase your chances of success in your sustainable business strategy. The first of these involves new technology adoption.
1. Adopt New Technologies
As in every other aspect of business, innovation in sustainability means technology adoption.
New technologies to improve business sustainability include:-
- Electric and public transport.
- LED lighting.
- Carbon capture and storage technology.
- Solar power.
But it’s not just the purchase of new technology that affects sustainability. Electronic waste (E-waste) is one of the most effective forms of poor sustainability practices in business. This waste comes from older, inactive technologies that IT teams replace with newer versions. IT departments can recycle obsolete equipment for components. So it is important not only what new technologies are adopted but also how companies dispose of the old devices.
Technology adoption involves constant research to be aware of how to continue to grow.
2. Identify and Capture Opportunities For Growth
The core of growth and strategic opportunities is research. CIOs must continuously research new technologies for sustainability. And companies can hire an external sustainability consultant to ensure that sustainability practices are planned, implemented, and maintained within a robust strategy.
3. Deploy Financial Risk Assessments
Financial risk is one of the predominant hesitations that prevent companies from engaging in a sustainable business strategy. Finance teams must carry out comprehensive risk assessments to ensure that every aspect of a sustainable business strategy is costed and clear deliverables can be recorded by staff using metrics. CIOs can collaborate with CFOs to provide the best analytics drawn from risk assessments to optimize any sustainability strategy.
Planning For Tomorrow
Sustainability is the motto for corporate transparency, ethics, and forward-thinking. All companies of any size must consider a sustainable strategy to align with consumer trends and expectations. But beyond this self-interested business case is the outward-facing attitude toward the future, ensuring a brighter, greener tomorrow for the benefit of employees, shareholders, and customers.