Change is opportunity, as Jonathan Porritt of Forum for the Future observed, and business is leading a change. While governments have been expected to make sure that the UN Development Goals are met, and that such global agreements as the Paris Accord are top of the mind in policy-making, business has been stepping forward to initiate and lead what is termed as a shift in governance.
To be sure, legislation and how pertinent laws are implemented–all key to the success of any and all efforts at sustainability– remain the ambit of governments. But business has rolled up its sleeves and taken hold of the horn to make sure the bull is controlled. A sustainable future birthed through a change in systems on how resources are managed and expended is what this is all about.
The question ‘Can business be both environmentally sustainable and profitable?’ has been answered a few times over in the most simplistic manner (take care of our future and you take care of yours) or in the most highfalutin ways.
The main thing however is that businesses are now developing plans which ‘combine long-term profitability with maximum social responsibility and environmental care.’ They have recognized that by following some basic principles of sustainability businesses can forge a path toward larger corporate social responsibility goals. That being responsible can and will bring good returns. And that sustainable profit which does not ‘subordinate environmental and societal issues to financial goals’ is achievable.
Studies have shown that social initiatives have positive impact on consumer behavior and employee performance, and that energy efficiency and pollution mitigation can have a direct impact on waste reduction.
While economic sustainability involves making sure that business is profitable, business operations should not be contributory to social or environmental problems that could and would be detrimental to the success of the company.
Global brands and other large companies are crafting policies that as a rule recognize and instill responsible practices company-wide and in dealing with stakeholders. Major players in industries that are often seen as contributors to the degradation of the environment are institutionalizing programs aimed at mitigating the impact of their operations or replenishing resources these operations expend.
Boosting such efforts is green investing or eco-investing into companies that provide or support environmentally friendly products and practices.
Sustainability should therefore be present on the table. Always. As has been proven across industries, sustainable business practices characterized by more focused strategies and innovation that use fewer resources mean a healthier bottom line.
In 2017, David Hill of the Environmental Defense Fund said that there were four corporate sustainability global trends that should be observed in 2018. Those trends were: growth in companies setting Science-Based Targets, greater attention towards reducing supply chain emissions, tech and internet companies stepping up on sustainability, and increased innovation.
Halfway through the year, the following trends were observed: 1) There is rapid growth of companies setting Science-Based Targets- many companies are setting new reduction goals, and Science-Based Targets have emerged as the new industry standard. Here’s why: They are not a marketing claim, they are in line with the goals of the Paris Agreement, they ensure accountability and they give companies a competitive advantage; 2) Companies are increasingly looking to tackle their supply chain emissions. Companies are either finding ways to reduce emissions across their entire value chain, or are working to better understand, and quantify, their impact; 3) Environmental innovation is transforming corporate sustainability. We’re seeing that when companies are faced with challenges in reducing their carbon footprint, it can breed innovation and creativity. Plans are being developed to work with manufacturers, vendors and merchants on improving product efficiencies, and educating employees and sales consultants to enable them to help consumers purchase the most efficient, electronics and appliances.
Across the corporate world, policies are being written with sustainability at the center of the conversation.
But what is sustainability?
Sustainability can mean many different ways to many entities. However, many find the best definition so far as that by the 2005 World Summit on Social Development which presented sustainability as an integration of social, economic and environmental factors. Sustainable development is that which entails “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”
The US Environmental Protection Agency, for its part, pointed out that “Everything that we need for our survival and well-being depends, either directly or indirectly, on our natural environment. Sustainability creates and maintains the conditions under which humans and nature can exist in productive harmony that permits fulfilling the social, economic, and other requirements of present and future generations.”
Economic sustainability involves ensuring that business makes a profit, but also that business operations don’t create social or environmental issues that would harm the long-term success of the company and how it takes care of its stakeholders and the next generation in general.
People, planet, profit. Those refer to the three pillars of sustainability. Or, more formally: economic, environmental, and social. Companies look for a balanced approach to long-term social, environmental and economic objectives, thus profit should share the same plane with social good.
The bottom line now is that the entire supply chain of a business requiring accountability from the primary level, through the suppliers, all the way to the retailers bodes well for efforts at sustainability. Production that demands sustainability will become a competitive edge as manufacturers supply the world with green goods that consumers demand. This will depend on how strongly business embraces sustainability by putting their money where their mouth is.