Developing Sustainable Business Practices: A How-To Guide

In the fast-paced and rapidly transforming world of contemporary business, sustainability has grown from being an abstract concept debated in academic circles to an integral part of strategic business decisions. No longer just a catchphrase or a trendy buzzword, sustainability has emerged as a crucial factor that dictates the success and long-term survival of businesses in an increasingly environmentally conscious global marketplace.

The Green Business Bureau reports that 90% of executives report sustainability is important. But what is sustainability in business, exactly?

Sustainability means maintaining a certain rate or level indefinitely. In a business context, a sustainable business is one that operates endlessly. However, achieving sustainability in business is a difficult task that we have not yet accomplished. This has led to the concept becoming somewhat of a mystery. Over the years, the meaning of business sustainability has become diluted and ambiguous. It is now associated with climate change, ending poverty, and achieving gender equality. To address unsustainability in business, the Environmental, Social, and Governance (ESG) criteria have emerged. Originally designed for investors, the language surrounding ESG has evolved.

Today, ESG is often used interchangeably with business sustainability, although this is incorrect. However, considering that true business sustainability has not been achieved, ESG is a more relevant and applicable concept with clear rules. The ESG framework sets specific criteria to define environmental, social, and governance systems as sustainable.

Smart businesses need to know how to incorporate sustainability into their business models. You can learn more about how to do so below.

Sustainability & Business

The importance of sustainability in today’s business world is underscored by a growing understanding that it is not an optional, feel-good add-on but a core component of smart and responsible business practices. This shift has been fuelled by increasing regulatory pressures, rising consumer awareness and demand for ‘green’ products and services, and an emerging realisation amongst businesses that sustainable operations can drive profitability, innovation, and competitive advantage.

Sustainability, in the context of business, isn’t limited to preserving the environment or reducing carbon footprint, as it is often misconstrued. Indeed, while environmental stewardship forms a significant part of sustainable business practices, true sustainability goes beyond ‘going green.’ It encapsulates a holistic approach that balances economic performance, social responsibility, and environmental care—often referred to as the ‘triple bottom line.’ This means that businesses are expected not only to be profitable but also to contribute positively to society and minimize their environmental impact.

Understanding Sustainability

The concept of sustainability is deeply rooted in the principle of meeting our current needs without compromising the ability of future generations to meet their own. This is often referred to as intergenerational equity. For businesses, it means striking a delicate balance between profitability and the preservation of both environmental and societal resources.

The understanding of sustainability extends beyond mere short-term profit-making. It involves re-envisioning business strategies with a long-term lens, focusing on sustainable growth and prosperity. Companies should recognize that embedding sustainability within their strategic blueprint allows for the optimization of resource usage, heightens efficiency, and fortifies their brand image. It can pave the way for businesses to become industry leaders, setting standards and catalysing change, thereby enhancing their competitive edge and long-term viability.

Moreover, understanding sustainability also involves acknowledging its three interconnected dimensions – economic, environmental, and social- often called the ‘triple bottom line.’ Businesses must realize that their operations’ impacts extend beyond the economic sphere to encompass social communities and the environment.

Conduct a Sustainability Audit

With a thorough understanding of sustainability, businesses need to assess their current position by conducting a sustainability audit. This audit is a systematic review of an organisation’s operations and practices from a sustainability standpoint.

Rather than merely focusing on the environmental impact of your operations, a comprehensive sustainability audit should evaluate your business’s economic, ecological and social footprints. This might encompass assessing the lifecycle of your products or services, examining your supply chain practices, reviewing working conditions, wages, and labour practices, and analysing your impacts on local communities and the larger society.

The purpose of this audit is two-fold: first, to identify the opportunities for improvement across the triple bottom line, and second, to uncover potential risks or challenges that could hinder your sustainability journey. A comprehensive sustainability audit provides an objective baseline against which progress can be measured, and strategies can be refined.

Setting Goals

Based on the insights from your sustainability audit, the next step is to set clear and achievable sustainability goals. These goals should be in line with your organisation’s broader strategy, mission, and values, ensuring that sustainability becomes an integral part of your business and not an isolated initiative.

The goals can cover a wide range of issues, depending on your industry sector and your sustainability audit’s findings. For instance, if your business has a significant environmental footprint, you might aim to reduce greenhouse gas emissions, transition to renewable energy sources, minimize waste or optimize water usage. If social sustainability is a key concern, goals could include improving worker safety, promoting diversity and inclusion, enhancing employee wellbeing, or contributing to local community development.

Develop a Sustainability Plan

Once you’ve set clear sustainability goals, the next crucial step is formulating a concrete action plan that serves as a roadmap towards achieving these goals. This plan should detail specific tasks to be undertaken, assign roles and responsibilities to relevant teams or individuals, set clear timelines, and allocate necessary resources.

Beyond these, it should encompass strategies to manage potential risks associated with the implementation of sustainable practices. For instance, financial troubles due to upfront investment in new technologies, operational risks due to changes in processes, or reputational risks due to potential failure in meeting sustainability targets.

Moreover, the plan should elucidate how the company intends to engage various stakeholders—employees, customers, suppliers, investors, and the broader community—in its sustainability journey. This might include regular updates, feedback mechanisms, or participation in decision-making processes. Remember, effective planning lays the foundation for the successful execution of your sustainability initiatives.

Implement Sustainable Practices

The most significant step in your sustainability journey is translating your well-crafted plans into tangible action. The exact nature of these actions will depend on your sustainability goals and the nature of your business. For instance, if your goal is to reduce carbon emissions, you might consider investing in renewable energy sources, adopting energy-efficient technologies, or revamping your logistics to minimize transportation emissions. You can also reduce your carbon footprint by 75% by encouraging employees to walk more. If your focus is on social sustainability, you may look into improving working conditions, implementing fair trade practices, or fostering diversity and inclusion in your workforce.

Remember that each small step—whether it’s reducing water usage, recycling waste, sourcing materials ethically, or promoting work-life balance—contributes to the larger goal of sustainability. Also, as you implement these practices, be prepared to learn, adapt, and innovate along the way. Embrace digital tools like Smallpdf, which allows you to share and manage your documents paperlessly.

Engaging Employees

For sustainable practices to be effective, they must permeate every level of the organisation. Hence, it is essential to engage employees in your sustainability endeavours. This could involve educating them about the importance of sustainability through regular workshops and training sessions and keeping them updated about the company’s sustainability goals and progress.

Encourage employees to adopt sustainable behaviours in their daily tasks and recognize and reward those who excel in this area. Such initiatives foster a culture of sustainability within the organisation and empower employees to become sustainability ambassadors in their communities.

Communicate Transparently

Honesty and transparency are critical in your sustainability journey. Regularly communicate with your stakeholders—internal and external—about your sustainability goals, strategies, progress, setbacks, and learnings. This not only fosters trust and strengthens your reputation but also signals your genuine commitment to sustainability.

Use a variety of communication channels—newsletters, blogs, social media, sustainability reports, town hall meetings, etc.—to reach out to different stakeholder groups. Also, be open to feedback and constructive criticism, as they can provide valuable insights for improvement.

Monitor & Evaluate Progress

What gets measured gets managed. Regular monitoring and evaluation of your sustainability performance are crucial to understanding how well your strategies are working. Use key performance indicators (KPIs) relevant to your sustainability goals to assess your progress. Sustainability is not a destination but a journey of continual improvement. Use the insights gained from monitoring and evaluations to refine your strategies, innovate, and raise the bar for sustainability in your operations.

The Bottom Line

Developing sustainable business practices requires a holistic approach that transcends all aspects of a business. While the transition may seem challenging initially, the long-term benefits in terms of cost savings, brand enhancement, customer loyalty, and contribution to a healthier planet are significant. As more consumers, investors, and governments demand sustainability, businesses that embrace this will not only survive but thrive in the long run.