Sustainability is an increasingly important issue for many people, especially in the business world. Climate change continues to affect our lives as well as the fate of all other species around the planet. For business owners, leaders, and administrators, sustainable business practices are becoming imperatives. According to NASA, it’s more than 95% likely that human activity is causing the planet to get warmer. Human industry is a big part of the climate change picture because of its reliance on land, resources, fossil fuels, and non-stop production and consumption.
Making businesses more sustainable starts with being aware of the issue at hand and understanding just how important it is to make changes — both for the business and the planet. The intent of this resource is to help business owners, administrators, and leaders make their organizations more environmentally aware. Here, you’ll find a working definition of sustainability in business, an explanation of its importance, identification of the key players, a discussion of benefits and challenges, as well as information on how to improve sustainability in business.
Sustainability in Business: What Does It Mean?
Business sustainability is the practice of operating a business without impacting the environment negatively. A green business functions in the best interests of the local and global environment, meaning it supports the community and economy dependent on a healthy planet. An environmentally aware business considers more than just profits — it considers its impact on society and the environment. Such a business is sustainable because it contributes to the health of the structure within which it operates, thereby helping construct an environment in which the business can thrive.
A sustainable business adheres to the triple bottom line, a term coined in 1994 by John Elkington, the founder of a British consultancy called SustainAbility. The three components of the triple bottom line are profits, people, and the planet. A sustainable business earns profits by being socially responsible and protecting our use of the planet’s resources.
Why Is Sustainability Important in Business?
The “Great Pacific Garbage Patch” is illustrative of why it’s extremely important for businesses to prioritize sustainability. According to the scientific journal Environmental Sustainability, an island of plastic twice the size of Texas (approximately 1.6 million square kilometers) is floating in the Pacific Ocean. This plastic harms marine life, and microplastics in seafood can end up in humans. This plastic would not exist if it weren’t for companies that use it to create and package products.
Simply put, if businesses don’t act responsibly as members of the global community, the majority of many species will not survive past the 21st century. Environmental Sustainability notes that “the human-caused rate of extinction of species of both plants and animals at present is hundreds of times higher than the natural rate in the past.”
According to Environmental Sustainability, we’re on pace to produce 27 billion tons of solid waste by 2050 due to a business environment that prioritizes rapid production and turnover of products for maximum profits. Unchecked CO2 emissions are projected to contribute to a temperature increase of two degrees Celsius by 2050, which will cause sea levels to rise and catastrophic weather events to increase.
A study found that just 100 companies are responsible for 71% of global emissions. Now is the time for businesses to become part of the solution, cut down on emissions and waste, and contribute to cultivating a livable planet. The good news is that businesses can make a major impact and account for 60% of emissions cuts by 2030, as per the Paris Climate Accord.
Sustainable Business Statistics
The following statistics illustrate where the business world is when it comes to sustainability:
- According to Cone Communications’ corporate social responsibility study, 63% of Americans want corporations to drive social and environmental change in the absence of government action.
- 87% of American consumers will make a purchase because a company advocated for an issue they care about.
- 76% of Americans expect companies to take action against climate change.
- 73% of Americans would stop purchasing from a company that doesn’t care about climate change.
- According to the 2018 BSR/Globescan survey of business leaders in charge of sustainability and corporate social responsibility, respondents identified ethics and integrity as the No. 1 reason for pursuing business sustainability.
- 75% of corporate sustainability professionals say that businesses need to get better at including sustainability into business strategy to address global mega-trends.
- 64% of North American respondents said sustainability needs to influence core business activities such as strategy and value creation; 84% of European respondents and 89% of respondents everywhere else agreed.
- Less than 33% of respondents said their businesses are actually engaging with sustainable strategic planning.
- According to a report from The New Climate Economy, 95% of plastic packaging — the equivalent of $120 billion annually — is wasted after the first use, and microplastics have been found in 114 aquatic species.
- Over 140 million people will be displaced from their homes by 2050 if business continues as usual.
- Industries must drop carbon emissions by 40% by 2060 to stop the planet from warming over two degrees Celsius.
- In combination with action from governments and other stakeholders, businesses that take action on climate change by adopting green policies, technologies, and strategies for growth could realize a total of $26 trillion in economic benefits.
The case for sustainability is strong. To become sustainable, your business must engage everyone who can contribute.
Who Can Improve Business Sustainability?
Every individual can take steps to live and work more sustainably, but when it comes to improving sustainability in business, there are some people who are in a unique position to effect change.
Business Owners and Organizational Leaders
Effecting change throughout an organization takes organizational leadership training and skills to make effective top-down decisions. Business owners and leaders who possess organizational skills have the savoir faire to make strategic sustainability decisions that benefit the business, its employees, its customers, and the planet. Leaders are perhaps the most important link in the chain. Owners and executives have the intellectual acumen to identify the most effective sustainability strategy and initiatives, as well as the power to change policy and spur innovation.
Business Administrators, Managers, and Supervisors
Administrators, managers, and supervisors have unique insights into the day-to-day operations of a business. The future of business administration requires preparation to solve complex problems via unique perspectives, and the combination of skill and expertise to think of creative sustainability solutions. Admins, managers, and supervisors can provide valuable insights; because of their more hands-on role, they have a different perspective and understanding of how to improve business sustainability.
Human Resource Professionals
In a survey of 148 CEOs from the world’s largest and highest-profile companies, every respondent said human resources practices are essential to building and maintaining sustainable businesses. The HR department at your organization can play an important role in the development, creation, and implementation of company-wide sustainability policies. They can help ingrain these policies into the company culture and create a lasting shift in your business.
It’s important to create a company culture that reflects your values and makes employees comfortable enough to share their ideas, including those regarding sustainability. The HR team can act as a cultural ambassador, helping employees and new recruits feel recognized and valued as key drivers in efforts toward sustainability.
Sustainability initiatives don’t always have to come from the top down; employees may provide valuable contributions too. For example, according to the Stanford Social Innovation Review, employees at a Unilever tea factory in England saved the company €47,500 and reduced the waste of 9.3 tons of paper by suggesting the company change the size of paper tea bags. Because these employees were working with the product directly, they knew exactly what could be improved.
Encourage employees to speak up and share their thoughts about how your business can become more sustainable. The results could contribute to both sustainability and profitability. Moreover, the Stanford Social Innovation Review reports that this can improve “employee retention, productivity, and overall engagement.”
The Benefits of Sustainability in Business
Sustainability in business isn’t just good for the environment or society at large — it’s also good for the business itself. Here are just a few of the many benefits of operating a more sustainable business:
Reduces Business Costs
“Greening” your business takes an initial investment, but, over time, you’ll save money by prioritizing sustainability. A 2011 McKinsey survey on the business of sustainability found that 33% of businesses were integrating sustainable practices to improve operational efficiency and cut costs — resulting in a 19% increase from the previous year. Over the course of 10 years, clients of the managed service provider Elytus saved over $11 million through sustainable waste management and transparency.
You can reduce your business costs by going green. For instance, using more efficient lighting or creatively reusing existing materials will save money. Although it takes an upfront investment, converting to solar energy pays off: the average commercial property owner will save about $500 per month on electricity, which equals savings of $587,377 over the life of the solar power system. Most businesses pay off the cost of panels in five to seven years.
The federal government even offers tax credits, rebates, and savings for going green. Ultimately, the more sustainable your business becomes, the less you’ll spend on energy and materials.
Improves Business’ Reputation
Reputation management in business is about establishing a good image by aligning messages with actions. Among the most reputable companies for corporate social responsibility, Lego comes in at No. 3 because of its decision to make Legos from plant-based sources. After it made the announcement, Lego immediately followed through with products produced from leaves and sugarcane. The Danish toy company plans to use sustainable materials for all of its core products and packaging by 2030. As a result, the company’s reputation has skyrocketed.
People view sustainability as a plus, and companies with green values are eager to showcase them because of that fact. Going green shows the world you care about more than just making money. You can use this to your advantage when marketing your business and developing your brand identity.
Provides Competitive Advantage
S&P 500 companies with sustainability baked into their strategy perform better than those that don’t: they see an 18% higher ROI because they’re managing and planning for climate change. According to Jeffrey Hollender, professor of sustainability at NYU Stern, “You will perform better financially by doing things like having a great sustainability program.” Researchers from Harvard Business Review agree: “We’ve been studying the sustainability initiatives of 30 large corporations for some time. Our research shows that sustainability is a mother lode of organizational and technological innovations that yield both bottom-line and top-line returns.”
Increases Bottom Line
You can earn more money and boost your bottom line by making your business more sustainable. Reduced business costs, more innovative strategies, an improved reputation, and more new customers who value sustainability all work to increase the amount of money sustainable businesses earn.
Challenges to Improving Sustainability in Business
Though sustainability has many positive impacts on business, it can also be challenging to actually implement these changes. Here are some of the biggest barriers that businesses, particularly small ones, face when trying to become more sustainable:
Lack of Resources
Some businesses don’t think they have the needed resources — namely, time and money — to properly and effectively implement sustainability strategies. However, you don’t have to become a green business all at once. Solar panels, a LEED certification for your building, and sustainably sourced materials are not the only measures a business can pursue. You can start small and make affordable changes, which is much better than doing nothing at all (see “How to Make Your Business More Sustainable” below for some examples). Later, as you continue to cut costs, you’ll be able to afford more extensive changes.
Whether it’s with upper management or your employees, it can be difficult to actually implement your sustainability initiatives when other people in your organization don’t support them, take them seriously, or care. Do your best to ask for everyone’s input when creating initiatives. There’s a good chance some employees and managers will have their own ideas and issues.
Consider creating incentives — such as office parties and awards — and adding gamification to the experience. Some unengaged staff need their ideas to be recognized, considered, and implemented if they’re viable, while others need external motivation to participate.
Inability to Assess Success
It’s impossible to know if your efforts are worthwhile if you can’t accurately measure the outcome. Instead of worrying about what other businesses are doing, take strides to do what makes sense for your organization. What can you do to measure your own sustainability success?
For example, when it comes to going green, Chron’s Kim Durant points out that “a logical starting point is the raw materials that the business uses for its products or services.” But if you’re a software-as-a-service company, your raw materials are just the computers, electricity, and office equipment you require to make software. Can you buy computers from eco-friendly manufacturers and recycle the old ones? Can you buy green electricity? Can you buy office equipment made from recycled materials? The ability to check these boxes will be your measure of success.
For other businesses, it’s important to collect data on costs and sales and compare it with your outcomes once you’ve implemented sustainability initiatives. If your sales haven’t improved, you may have undermarketed your value as a sustainable business to the consumer.
Lack of Focus or Plan
A nebulous, unfocused plan to go green can easily overwhelm your business as you try to make a profit at the same time. Try to narrow your focus to one or two key issues that you care most about or think you would have the biggest impact on, then branch out from there. Your plan should include an assessment of how sustainable initiatives can cut costs in the long run and increase profits, if possible. If you can’t find a profitable strategy, focus on the cost-cutting aspect. You can turn around and sink your savings into investments and campaigns that will turn a profit.
How to Make Your Business More Sustainable
Becoming more sustainable in an effective way may not be easy at first, but the challenge is well worth the reward. Successful entrepreneurs, owners, and leaders look at problems as opportunities. Now is your opportunity to embrace sustainability and implement innovative strategies in the process. Some creative business planning can help you determine specific and unique strategies that will work for your business. Here are a few tips to get you started.
Start Recycling at Work
Recycling is beneficial: it keeps trash out of the landfill and the incinerator, and it creates 757,000 jobs annually. If your workplace doesn’t already do so, start recycling. If your workplace is already recycling, take a moment to read up on the recycling laws in your area to make sure you’re doing it correctly. It’s easy for everyone to get lazy and put items in the trash bin when they’re at work. Provide ample recycling bins in the workplace, make sure they’re labeled for the types of items that go in them, and if your city has a composting program, take advantage of it.
Encourage Green Commuting
The daily commute is a daily drain on the environment: each day, people waste 2.9 billion gallons of gas stuck in traffic, and each person forfeits $710 in productivity per year. Green commuting could have a huge impact on the environment by cutting down on daily emissions — encourage employees to do so when possible. Biking, carpooling, and taking the bus are all forms of green commuting that can help your employees contribute to sustainability both in and out of the workplace. Also, there are inexpensive scooters and electric bikes for those employees who live too far away to ride a regular bike.
Offer Remote Work Options
Remote work is technically another type of green commute, as it keeps drivers and cars off of the roads. Some positions do not allow for remote work, but if the work can be done outside of the office, allow people to take advantage of it. Remote workers have the same impact on the environment as planting a forest of trees: they eliminate 3.6 billion tons of greenhouse gases caused by commuting annually. Working remotely also helps people avoid health risks associated with commuting.
Despite the rise of digital technology, many organizations still use more paper than necessary. Computers, smartphones, and other devices are integrated into the workplace; use them to their fullest extent and avoid using paper whenever possible.
Create a Sustainability Committee
Selecting a team of volunteers who are responsible for sustainability initiatives in the workplace can do wonders for your efforts. It creates accountability — there are people specifically responsible for this, and they can take care to follow up with others and bolster a culture of sustainability in the workplace. Moreover, a committee will keep the ideas flowing. Task them with talking to other employees about challenges and ideas, and give them the power to make decisions.
Additional Resources and Further Reading
Clean Air Partnership: Resources and information to help minimize pollution.
Corporate Knights: Magazine for clean capitalism.
Department of Energy: Energy economy page with resources for small businesses, data, and workforce training information.
Database of State Incentives for Renewables & Efficiency: State-by-state portal to find incentives for using renewable energy and improving energy efficiency.
Energy Star: Government-certified appliances and buildings that conserve energy.
Environmental Protection Agency: The EPA has information and resources for water conservation, green products, services, and chemicals, pollution prevention, sustainability, as well as green meetings and conferences.
Fair Trade Certified: Resource for accessing fair trade supplies and certification.
Fair Trade Federation: Community of U.S. and Canadian businesses committed to fair trade.
Food & Water Watch Fact Sheet: Facts about bottled water vs. tap water.
Global Reporting Initiative: An international organization for sustainability reporting.
Greenbiz: A website/blog focused on sustainable business issues. Of particular interest is Greening Your Business: A Primer for Small Companies.
Green Team Blueprint for Action: Guidelines for a team approach to improving air quality.
Lungs at Work Toolkit: A toolkit to help improve air quality at work.
National Recycling Coalition’s Green Meetings Policy: Guidelines for promoting responsible waste management at gatherings.
Responsible Purchasing Network: An international network of buyers dedicated to socially responsible and environmentally sustainable purchasing.
Ridefinders: A commuter portal for finding carpools and vanpools.
SustainableBusiness.com: A website dedicated to sustainable business topics.
Treehugger: A website/blog with articles about eco-friendly living.