The Three Pillars of Corporate Sustainability
Corporate sustainability incorporates intentional business practices in three societal areas, with the goal of providing stakeholder value without compromising the environment, people, or the economy.
The Environmental Pillar
Businesses should work to limit their impact on the environment by reducing their carbon footprint, minimizing waste from packaging, and efficiently using water. By tracking the use of resources by benchmarking — or measuring resource consumption against a set standard — businesses can see and understand their spending and plan for the future.
The Social Pillar
Businesses need to maintain their social license — their ongoing acceptance by employees, stakeholders, and the public. A business can ensure it has a good reputation through several means, including treating employees well and engaging the community. It can also promote sustainable practices and make responsible supply chain decisions, publicly displaying its commitment to sustainability.
The Economic Pillar
Businesses should consider the benefits of displaying a commitment to sustainability, including improved profitability through sustainable practices. They can benefit from aligning resource spending practices with the company’s values, listening to employees’ insight about possible process improvements, and involving customers in planning sustainable practices.
Businesses also need to be transparent with investors to gain their trust. This can include maintaining compliance with regulatory requirements; avoiding hiring board members who may have a conflict of interest; avoiding the exchange of political contributions for favors; and avoiding using inaccurate, or opaque, accounting methods.
Actionable Practices in Corporate Sustainability
Companies can easily put into action a number of sustainability practices.
The Triple Bottom Line
The triple bottom line expands a company’s bottom line to consider not just profits but also people and the planet. A business that models its operating plans on the triple bottom line examines risks and opportunities to create a profitable sustainability plan. Risks include inefficiently wasting resources on packaging and hurting the environment, as well as inefficiently managing energy and creating a larger carbon footprint. Opportunities include looking for more sustainable materials in wider supply markets to reduce waste and installing energy-efficient appliances to lower long-term utility costs.
Employee Incentive Programs
These programs help involve employees in a business’s sustainability efforts. Incentives can include rewards for carpooling, biking, and taking public transit, as well as telecommuting options. In-office incentives could involve reusable supplies, such as washable cups to minimize plastic water bottle usage and rewards for lessening an office’s waste.
Corporate Sustainability Plan
More small businesses are realizing the benefit of creating an official sustainability plan. Creating a sustainability plan entails five key steps. The first step involves learning about sustainability. Next, companies should assess business areas that can be improved. Then, they should find opportunities for change. Finally, businesses should enact the changes that will make their operations more sustainable.
The Global Reporting Initiative’s Guidelines
The Global Reporting Initiative provides businesses with the tools to create a standardized sustainability report. Tools such as downloadable, editable forms and training make reporting simple. Reporting shows a business’s dedication to transparency and sustainability.
Short and Long-Term Benefits of Corporate Sustainability
Consumers and employees want to support responsible businesses. Businesses with better environmental and social responsibility can reduce employee turnover by 25% to 30%. Some 47% of consumers want to buy from environmentally conscious businesses. Additionally, 58% of Generation Z consumers want eco-friendly packaging, and 57% want environmentally sustainable products.
Sustainability leads to lower costs, better operational efficiency, and better stock price performance. The assets under management that use sustainable investing strategies amounted to $12 trillion at the start of 2018 and grew to $17 trillion by the start of 2020, a 42% increase. Being energy efficient and using responsible packaging saves money and makes resources last longer, lowering costs. For example, a hotel can reduce its energy costs by 25% by asking guests to forgo daily sheet changes. This also reduces the replacement rate of the sheets, lowering both expenses and waste.
Business leaders might worry about a lack of resources and the cost, but sustainability can be implemented in small steps, removing a large overhead. The Global Reporting Initiative and other resources can help them understand the process of implementing sustainable practices. Business leaders might worry about long-term benefits, but stockholders, investors, and consumers support sustainable efforts.
Corporate sustainability should be a priority for all businesses. Small businesses that focus on implementing sustainable practices will gain and maintain a loyal customer base. Stockholders and investors prefer to support businesses that practice sustainability. Small businesses should consider a sustainability plan’s long-term benefits when creating a business strategy.
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