Transforming the Corporate Landscape with Sustainable Business Practices
The effects of climate change are becoming more and more apparent. United States Environmental Protection Agency (EPA) states areas around the globe have already felt and continue to feel its impact, from warmer temperatures for extended periods, changes in rainfall, and rising sea levels.
In response, eco-conscious individuals and organizations around the world have called on governments and businesses to embrace sustainability. Corporate sustainability not only involves recognizing the environmental impact of your business practices and processes but also actively working to uplift the positive effects and mitigate the adverse consequences.
Corporate sustainability is rewarding in itself, and many businesses feel they have a social responsibility to do their part in caring for the planet. However, organizations may find that operating more sustainably also leads to a better brand reputation, more engagement with conscious consumers, and long-term resilience. However, the issue is wide-reaching and can feel overwhelming to handle. This guide delivers practical insight for integrating sustainability into existing corporate practices.
The Business Case for Sustainability
You’ve likely heard the term sustainability, but how does it apply in business? At its core, corporate sustainability is a type of strategic planning where organizations consider how to provide goods and services to experience economic growth but also promote environmental sustainability.
Business sustainability is sometimes used interchangeably with corporate social responsibility, but the two are different. Corporate social responsibility (CSR) consists of three key elements — environmental, social, and governance. You may see it referred to as ESG responsibility to incorporate all three aspects.
Corporate social responsibility involves taking a step back and reflecting on past efforts to cultivate a more sustainable, inclusive, and equitable society. Business sustainability is focused on the future and what strategies leaders can implement to change their environmental, economic, and social impact.
Sustainable development is important because it values the environment alongside business growth. When businesses actively seek corporate sustainability, such as reducing the use of fossil fuels, lowering their carbon footprints, and working toward net-zero greenhouse gas emissions, the impact on climate change is significant. However, it also has positive implications for the business, including:
- Enhancing brand reputation and differentiation: Companies constantly seek ways to stand out from the competition. Instead of creating new products or offering additional services, a business may invest in an environmental or social effort to draw attention. This strategy can also boost brand reputation.
- Attracting conscious consumers and stakeholders: Concerned customers often look specifically for causes a business supports. Consider other stakeholders, such as employees, as the shared goal of bettering society can increase morale and productivity.
- Mitigating risks and fostering long-term business resilience: A large part of sustainability is longevity. Does our business model currently utilize resources in a way that ensures lasting growth? A company that values corporate sustainability will identify possible risks and strategize to alleviate them.
Setting Sustainability Goals and Targets
Any strategic initiative begins with a plan. Companies need to establish clear sustainability goals that align with their organizational values. This process includes creating a strategy roadmap with the various objectives you hope to achieve with better corporate sustainability and defining targets to measure environmental, social, and economic impact. To help determine sustainability goals, many organizations divide initiatives into three theaters. Theater one initiatives focus solely on altruism and not practices that directly increase performance or profits. An example may include donating to a non-profit dedicated to protecting human rights.
Theater two initiatives also benefit society or the environment but also serve the business in the process. The results may be boosting profits or efficiency. For instance, a company may offer employees time off to complete volunteer work to serve the community and increase morale, which can improve productivity.
Lastly, theater three initiatives examine the business model for areas requiring substantial improvement. At this stage, companies aren’t making incremental changes but modifying their approach to operations entirely.
Your sustainability objectives may fall into one or more of these theaters or look completely different. In any case, proper planning through setting goals and targets is essential to gauge the efficacy of a corporate sustainability strategy.
Integrating Sustainability in Corporate Strategy
As you develop sustainability goals, consider how they factor into your organization’s vision, mission, and business strategy. This step will enable you to incorporate sustainability into decision-making seamlessly.
One place to begin is by leveraging existing metrics, such as key performance indicators (KPIs), and applying them to sustainability. It gives you the means to measure sustainability performance to adjust as necessary and evaluate if these new practices are helping or impeding other strategic objectives.
Another important aspect is the three Ps of corporate sustainability — people, planet, and profit. Before implementing changes, think about how sustainability practices will affect communities and stakeholders (people) and the environment (planet), as well as business growth (profits). This approach is often referred to as the triple bottom line as it goes beyond the standard bottom line of just profits. Many organizations also include purpose to incorporate their mission into corporate sustainability strategy.
Stakeholder Engagement and Collaboration
Businesses should always consider involving stakeholders in decision-making, especially with sustainability. When devising strategies, make sure you welcome input from employees, customers, and communities. For decisions potentially affecting the environment, you may reach out to local environmental agencies or organizations for additional guidance.
Improving corporate sustainability can be challenging, and companies can feel pressure from the policymakers who create regulations and the investors and shareholders who want to ensure any decision has an economic benefit. Businesses can decrease their burden by developing partnerships with similar organizations to collaborate on sustainability. This could involve joining forces with several companies to host fundraising events and other activities to support local non-profits.
A key component of stakeholder engagement is frequent communication about progress with corporate sustainability. When drafting sustainability reports, encourage stakeholders to provide feedback to help you hone strategies. You may also consider sharing reports with stakeholders before disseminating them to the public to ensure all departments are up-to-date on new developments.
Leveraging Technology for Sustainability
Corporate sustainability requires innovation, and innovation often entails technology. There’s no one technology designed to help with business sustainability; instead, organizations utilize a set of digital solutions that empower sustainable outcomes. Consider the following technology-driven techniques:
Digital Tools for Energy Monitoring and Optimization
Digital tools can transform how businesses function to ensure sustainability across critical areas, from IT to customer-facing operations. These technologies may enable organizations to optimize resources, observe trends in energy efficiency, and more. Popular digital tools for improving and managing sustainability include:
- Cloud services
- Supply chain blockchain technology
- Virtual meeting capabilities
- Greenhouse gas (GHG) management software
- Supplier sustainability applications for evaluating supplier performance
Utilizing Data Analytics for Identifying Sustainability Opportunities
Once a corporate sustainability strategy is established, businesses need a means to collect and analyze data to gauge progress. Advanced analytics solutions enable organizations to evaluate performance in real-time. For example, GHG management software helps teams understand the past, present, and projected future impact of emissions. With this technology, a business gains the insights necessary to improve emissions efforts and can create more meaningful sustainability reports.
Leveraging Automation for Sustainable Operations
Of the many technologies that can help with corporate sustainability, few are as significant as automation. According to a survey by Environmental Defense Fund, more leaders are investing in automation and artificial intelligence (AI) than any other technology for enhancing revenue and sustainability.
The main benefit of automation is its ability to help conserve resources for business activities that are otherwise intensive. For example, you can use AI to streamline difficult processes and reduce your environmental footprint.
Measuring and Reporting Sustainability Performance
You won’t know if your business is making real progress with corporate sustainability unless you have a clear system for measuring the success of initiatives. Metrics provide a baseline for understanding the impact of your sustainability strategy and help you normalize data to make better comparisons.
Measuring is also crucial for sustainability reporting. Reports organize data coherently and transparently for sharing progress with stakeholders and the general public. These reports include information such as how the company uses resources, the effects (positive and negative) of operations on the environment, and plans to function more sustainably and make responsible investments moving forward.
Since different industries have different concerns regarding corporate sustainability, there’s no single method for sustainability reporting. However, several frameworks prove useful for sustainability reports across many organizations, such as:
- Global Reporting Initiative (GRI): From startups to large corporations, GRI standards help any organization make sense of their overall impact and craft transparent reports.
- Sustainability Accounting Standards Board (SASB): SASB standards include specific guidelines for sustainability reporting for businesses across 77 industries. It includes provisions for ESG concerns specific to each industry.
- Climate Disclosure Standards Board (CDSB): These standards enable businesses to include ESG reporting in other corporate reports.
- Carbon Disclosure Project (CDP): This non-profit organization allows companies to report on risks and opportunities related to environmental issues, such as climate change and renewable energy. CDP provides a letter-grade score for each topic that companies can share with stakeholders.
- United Nations Global Compact: Coined the largest corporate sustainability initiative in the world, the UN Global Compact seeks to align organizations with 10 ESG principles. Companies under this framework receive an annual Communication on Progress (CoP) report discussing how well they follow these principles.
Creating a Culture of Sustainability
No matter how robust your corporate governance and strategy for maintaining sustainable practices, there’s always room for improvement. In other words, achieving sustainability isn’t a one-and-done initiative. If treated as such, you risk missing issues that can unfold down the road, as well as current problems not as apparent as others.
Instead, corporate sustainability requires a continuous commitment to change. An effective way to preserve this mindset is by fostering a culture of sustainability. To begin, develop training programs to increase employee awareness of the environmental, social, and economic impact of the business and educate them on sustainable practices. Training also ensures employees can easily contribute ideas and express concerns about corporate sustainability for more engagement.
Another option is to encourage employees to comply with sustainable practices with incentives. For instance, you can factor sustainability into performance reviews. You can reward employees who regularly do their part to support the company’s ESG goals by offering promotions or pay increases.
If these types of incentives prove unrealistic, simply recognizing employees for their efforts can ensure they continue to act sustainably at work. What’s more, employee health and wellness is an important element of upholding corporate social responsibility. So, incentivizing sustainable behaviors can have double the impact.
Drive Corporate Sustainability to Experience Change
When companies embrace sustainability, it’s not only communities and the environment that benefit. From an enhanced brand image to more effective risk management, corporate sustainability delivers many advantages to businesses operating in numerous different spheres.
To successfully integrate sustainability into their corporate strategies, businesses must set clear goals and targets, ensure adequate stakeholder engagement, secure the right technology, and establish a framework for sustainability reports. Many organizations are eager to pursue corporate sustainability but aren’t sure where to begin. For these companies, strategy and performance management software can help.
Spider Strategies delivers performance management software called Spider Impact that helps everyone at your business get on the same page about strategy. Flexible, Spider Impact works with any performance methodology and can help businesses regardless of industry or size. Our software looks at big-picture goals while also helping you leverage the operational data needed for daily tasks.
By prioritizing corporate sustainability, businesses can engage in more responsible ESG practices and realize positive change that otherwise might not be possible. With Spider Impact, you can execute sustainability strategies with more confidence to turn goals into realities. Contact us to learn more about corporate sustainability and our software, or schedule a live demo today.
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