Sustainability is not just a fancy word. It is an organized approach to achieve a holistic and triple overall growth. Apart from risk identification and mitigation, it also provides a major improvement in the working efficiency of the processes and systems to utilizes the resources and also to prove the tangible and intangible benefits of sustainability which includes positive impact on the employee’s self-esteem, an organization which is recognized as employer of choice, more efficient supply chain which will help to adopt the leading procedures and consumers being trained on the significance of responsible behavior.
Sustainability in business is basically divided into two main categories:
- The effect business has on the environment
- The effect business has on society
The main aim of a sustainable business strategy is to make a positive impact on either one of those areas. When companies fail to complete their responsibility, the opposite can happen, leading to issues like environmental destruction, inequality, and social injustice.
Other than helping curb those global challenges, sustainability can help businesses become successful. Various investors today use Environmental, Social, and Governance (ESG) parameters to analyze an organization’s ethical impact and sustainability practices. Investors look at factors such as a company’s carbon footprint, water usage, community development efforts, and board diversity.
Research states that companies with high ESG ratings have a lower cost of debt and equity, and that sustainability initiatives can help improve financial performance while getting public support. Nearly 3,000 workers said, according to McKinsey, the strongest motivating factors for adopting a sustainable mentality are: engaging with the goals, missions, or values of a company; creating, sustaining, or improving reputation; meeting consumer expectations; and exploring new opportunities for growth.
Instead of, “doing good” can have a direct impact on your company’s ability to do well. Following are the four steps you can take so that you, too, can connect your business strategy with your mission and create shared value.
Companies are under increasing pressure from key stakeholders to disclose their values, policies, and performance in terms of sustainable development. Sustainability Reporting is a good response to this need for greater responsiveness and transparency. It has now become an established and important aspect of business communication by the world’s leading companies, with more than 3,500 reports published in 2010 and more than 4,300 reports published in 2011.
Water Risk Management:
Water scarcity is one of the major challenges facing the business today. A growing number of companies have begun to prepare for the next water-related risks and opportunities and hope to gain a competitive edge by placing them in a better position for the future of water scarcity. Given all the factors, there is a strong need for effective water management.
As concerns about climate change become a global phenomenon, businesses are forced to respond to the challenges posed by this. This leads to anxiety – can we support you? From a different point of view, there is a great opportunity for those who understand the basic tendencies to sustain and imitate their products and services appropriately. “One cannot speak without knowing”. Therefore, Carbon Footprinting is often regarded as a key step in developing a strategic approach to managing corporate carbon hazards.
Nike and Adidas have both significantly stepped up. Nike has focused on reducing waste and lowering its footprint, whereas Adidas has created a greener supply chain and targeted certain issues like dyeing and eliminating plastic bags.
Unilever and Nestlé have showed devotion towards being sustainable; Unilever notably on organic palm oil and its overall waste and resource footprint, and Nestlé in areas such as product life cycle, climate, water efficiency and waste.
Walmart, IKEA and H&M have become more sustainable retailing, largely by leading collaboration across their supply chains to reduce waste, increase resource productivity and optimize material usage. These companies have also taken steps to address local labour conditions with suppliers from emerging markets.
Pepsi and Coca-Cola have both developed aspiring agendas, such as focusing more on water stewardship and setting targets on water replenishment.
In biopharma, Biogen and Novo Nordisk have both become more energy efficient, have reduced waste, and taken other ecological measures. They also focused on social effects in the fields of health and safety through partner programs.
In financial services we see how banks like ANZ and Westpac in Australia both advance local communities through good sustainability practices and by implanting sustainability in their business procedures and culture.
Car manufacturers like BMW and Toyota have moved towards energy efficiency and pollution reduction, not to mention Tesla as an outsider really challenging the industry’s overall footprint.
Benchmarking sustainability practices: Any corporate got to have their practices to be found out as a replacement level of working output. They follow the six sigma strategy to line up a new benchmark for his or her services. And it’s an ongoing process where we offer assistance to cater utmost and well in the set benchmark to be followed and developed.
Stakeholder Engagement Process: It is most urgent to connect stakeholders either vendor, regulator, or shareholder whoever could also be the priority has got to be capitalized and engaged uniformly for corporate growth.
Sustainability Strategy and Roadmap development: The competitive edge has got to be developed by corporate consistent with their limit topic to Strength, Weakness, opportunities, and threat (SWOT) analysis. Every strategy has got to be the end of the day and therefore the roadmap to follow to make new parameters of growth.
Corporate Social Responsibility: Any living business uses and uses the resources and community of the country which obviously has its social discharge obligations. The Regulatory Office also wishes that the select business should invest at least 2 percent of the average profit of the last three financial institutions measured pursuant to Section 135 of the Companies Act, 2013.
Low carbon strategy and business models: As the world is concern about the depletion of the ozonosphere thanks to excessive industrialization pollution on earth, now it’s a challenge for any corporate to possess an environment-friendly business model supported by no or zero pollution.
Carbon footprinting and labeling of products and services: Under the regulatory framework, the merchandise manufacture by industry is labeled by the concerned authority to support the worldwide concern on environmental pollution.
Greenhouse Gas (GHG) Assurance: Most of the country has issued direction and compliance framework to assure the greenhouse emission generation and controlled for an equivalent to support a worldwide cause for the cover of our earth and its environment.
Clean Development Mechanism (CDM) project identification, development: Most of the projects on the field now the regulatory want to possess clean development certification for compliance of this global cause which mandates the company to spot and develop such project. Even the authority of the country most frequently do demand directors report supported this type of environmental and technological issues to be disclosed.
Evaluate the Problem and Define Objectives
The first step to changing is evaluating what sustainability means to your team, company, industry, and client. Consider the big problems each of these groups thinks is a priority.
To guide this process, think of factors, such as:
- The amount of waste that the organization is producing
- Is our company culture struggling?
- Are our hiring practices attracting various job candidates?
- Is our product helping our target audience?
- What impact does our company have on the local community?
- Considering these types of factors will help you establish your company’s sustainability objectives.
P.S: You can use an amazing strategy for determining your goals. Take the SMART goals approach as you move through these steps. Making sure your goals are “SMART”—Specific, Measurable, Achievable, Relevant, and Time-bound—in this early stage can save you time in the future.
Establish Your Mission
Once you’ve agreed on solid objectives, you’re ready to explain your company’s mission. A clear mission statement is an important part of becoming a more sustainable business.
An effective mission statement outlines your company’s focus on “doing.” It should clearly def8ne your organization’s values and purpose, and serve as a guiding light of why you do what you do. In other words, your mission statement should explain your company’s five Ws: who, what, when, where, and why.
Here are some examples of companies with effective mission statements:
- Alignable: “We believe that local businesses are stronger together. Our goal is to help small business owners make the connections that lead to long-term relationships, generate more word-of-mouth referrals, and unlock access to the collective wisdom of the local business community.”
- Patagonia: “Build the best product, cause no unnecessary harm, use business to inspire, and implement solutions to the environmental crisis.”
Inside each of these companies’ statements, it’s clear what the company values and how they’re executing against those values.
P.S: Think about how your mission statement will grow as your company scales. A mission statement should help a business evolve with the market, not obstruct your internal capabilities to be innovative and disrupt business. Thus, make sure your objectives can somehow be extrapolated from your mission statement.
Create Your Strategy
With a strong vision, you’re ready to re-align your organization with a sustainable business strategy.
In creating a sustainable business strategy, it’s necessary to make sure your company remains profitable. This should be your number one priority. If you cannot remain in the company, you cannot support your cause. And as stated above, your sustainability efforts may help you become more profitable.
- Think about this: Does your company typically leave the electricity and heat on overnight, even while there are no employees in the company? Imagine how much money you can save could be, in both cost and energy resources, if the last person in the office simply shut them off?
Or what about customers who are willing to pay more for a commodity that is manufactured sustainable? A study commissioned by Unilever found that 33 in 100 customers will purchase “socially and environmentally sound” products, creating an unexpected business demand for sustainable goods.
There are several strategies specific to your industry that can increase your productivity while driving social and internal value. Putting in the work to build a strong sustainability strategy can help both your company and the environment in the long term.
- Side Note: Would you like to know where to begin? Think of inner and outer possibilities for making your mission worthwhile. Ask your team questions, “Are our products paying more if we produce more sustainably for our customers? “Or, will our emissions decrease through improved business processes? “If all of these questions are yes, you will have the start of your plan and improve your efficiency and benefit at the same time.
Time To Get Results
It’s one thing to talk about a newfound motivation to do well and do good, but it’s another to make a public stand, pledge quantifiable results, and actually achieve them. With your mission and strategy made concrete, you’re ready to stride towards reaching your objectives.
As you’re executing your strategy, be sure to revisit your process periodically to assure your objectives, mission, and progress remain connected.
Quick Tip: Not sure about where to start? Ask yourself if there are any areas where your mission can have a great impact, quickly. Think about a partnership with an organization that has a similar mission to yours. Connecting your missions can help drive progress, fast. And partnering with an established player will also improve your credibility.
So these are the four simple steps—from purpose to performance—that can help you build a more sustainable business.
When goals become the purpose, a powerful story is established. That story will drive your mission and enable you to create a plan that you can take action on. This strategy is ready to lead results and make you a real doer. Don’t worry if results don’t come as soon as you expect them to; the road to 100 percent sustainability is long and may take testing a few different approaches for you to make your greatest impact.
All in all, sustainability is a major challenge, one that matters beyond individual companies. But reassuringly a number of large companies are creating foresighted sustainability policies. It is really becoming clear that sustainability is a megatrend that isn’t going to go away anytime soon.
The Sustainability Practice of Legalraasta allows companies to prepare, source, deliver, finance, and quantify the larger product and service impact. By making them more resilient, agile, and competitive, we contribute to future-proof companies.
We provide advice on a broad range of topics, partnering with corporate, private equity, and public sector customers. We are experts in how companies can recognize threats and take advantage of the possibilities.