Michael Meacher, Environment Minister of UK, once said, “Forward thinking companies that adapt positively to the sustainable business agenda will be at the forefront of resource productivity, reducing waste and environmental reporting. They and their management teams make things happen ahead of their competitors.”
The benefits of embracing corporate sustainability programs are being realized and leveraged by multiple companies across several industries around the globe; some of the proven results are improved brand image, attract greater audiences, operational efficiencies, enhanced employee satisfaction and stakeholder loyalty, significant gains in public relations and so on.
So, what exactly is Corporate Sustainability?
The term Corporate Sustainability was first derived from the concept ‘sustainable development’ from the Brundtland Commission report, which defines the term as, “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” As a popular approach, Corporate Sustainability aims to create long-term values for stakeholders by implementing a business strategy driven by ethical, socially responsible, environmentally sound, cultural and economic aspects.
A company with a precise Corporate Sustainability strategy promotes an environment of business profitability, longevity, transparency and employee satisfaction. The core business philosophy that works behind the notion is to conduct a business and foster growth without damaging the future generations’ prospects, well-being and opportunities to lead a healthy life.
Corporate Sustainability is built on the belief that although every business is meant to pursue financial gains, and their business processes and activities to achieve these goals might have some societal or environmental impact. Hence, it is their responsibilities to address these influences and take social, environmental, economic and corporate governance measures to mitigate the adversities.
The 3 elements of corporate sustainability
There are 3 fundamental pillars of Corporate Sustainability that companies need to know about, before defining a strategy.
The economic pillar stands for balancing corporate ethics with business profits. It suggests the importance of corporate risk management. Taking care of the economic pillar signifies that enterprises are well aware of their corporate reputation and brand image and in no way will they put it at stake for short term financial gains. It urges the companies to make long-term sustainable growth based on financially stable decisions.
The social pillar implies the consistency of support from stakeholders, community and employees, which is gained by fair and respectful treatment of people involved in your business. At the same time, it also expects business to engage in ethical operational processes to encourage creativity, productivity, improved engagement and retention. Companies with successful social sustainability strategies enjoys a workplace beaming with skilled, motivated and productive employees and a rich and happy office culture that breeds innovation and enhancement in processes, business models and existing product.
The environmental pillar needs to be the strongest of all. This reminds the companies to adopt innovative and sustainable practices and processes to lessen carbon footprint and pursue greener alternatives. It is important for the companies to embrace options like waste management, less carbon emissions, improved packaging, reduction of plastic usage, minimizing the usage of paper and other environment-friendly measures, which ultimately will lead to improved public reputation and better financial returns.
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Why companies must have a corporate sustainability strategy
Corporate sustainability is not just a vision, it is a reality that drives business profitability at all levels. The following statements, facts and figures clearly state the benefits that companies can leverage by imbibing a corporate sustainability strategy.
- According to a Deloitte study, 76% of millennials owning businesses believe that they can positively make a difference to the world they live in.
- A BCG report states that companies that perform well in ESG (Environmental, Social, Governance) areas make bigger profits and are valued more than the competitors.
- Another Nielsen report says that 66% consumers across 60 countries will prefer paying higher prices for products bought from environmentally conscious companies.
- A study from Cone Communication confirmed that 87% Americans willingly purchase products from companies that address specific corporate values.
- Another report mentions that one of the most motivating factors that drive employee retention and satisfaction is the feeling of contribution towards the society at large.
Combining the core components of Corporate Sustainability will enable businesses to support an office culture based on respect, motivation, innovation, productivity, fairness and creativity. On the global front, economic, social and environmental sustainability will help companies enhance their brand perception, value and vision statement, cost reduction, happier stakeholders, customer loyalty and improved business relationships. Corporate sustainability is here to stay!