Sustainability has become one of the key factors determining whether a business can remain relevant and competitive in today’s market. But despite what 90% of global business executives consider very important, he is only 60% of organizations implementing actual strategy. The reality is that companies can no longer afford to continue to omit sustainability from their core corporate strategy and now need to thrive in three distinct areas: environmental, social and governance (ESG).
What is sustainability in business?
Sustainability refers to the impact that different companies have on both the environment and society, and successful strategies in this area have the goal of having a positive impact in one or both areas. The strategy primarily focuses on addressing natural resource depletion, climate change, pollution, human rights issues, gender and racial injustice, and many other global issues.
The value of a sustainable corporate strategy
In addition to the explicit purpose of facilitating environmental and social change, implementing well-designed strategies can also improve an organization’s overall success. A company’s level of ethics and sustainability is often assessed using ESG metrics. The best-rated organizations continue to outperform their competitors over the medium to long term.
By including sustainability initiatives in existing business strategies, companies can not only meet regulatory requirements and consumer demand, but also manage increasing investor pressures. Moreover, companies that invest time and money in this area will ultimately reduce costs, improve profits and attract more top talent.
Actionable steps for your business
Take a look at the following ideas to help your organization build a more sustainable future.
Incorporation of ESG investment
ESG investment is a type of financing that evaluates returns by considering factors such as the environment, society, and governance, and an increasing number of companies are incorporating it into their corporate strategies.
There are many examples. Even some of the well-known online casino companies recognize the importance of having an impact on the local community in order to improve local living conditions and establish a name for their business. For example, New Zealand’s famous Sky City Casino has launched ESG investing by backing three different organizations focused on creating a better world. They directed funds towards New Zealand’s leukemia and blood cancers, as well as sustainable coastlines and million-meter streams. Both revolve around nature conservation. Fighting for a sustainable future by SkyCity NZ is a step all businesses should take and there are great examples of Canadian companies doing the same.
For example, HSBC has made great efforts to protect the environment and launched its own ESG Reporting Center. UBS Canada launched its own Oncology Impact Fund and the UBS Optimus Foundation, which helped reach out to her 2.8 million children in need.
Whatever method you choose to make the world a better place, you need to bring your executive team together to ensure your new strategy is perfectly aligned with your organization’s existing goals and initiatives. Failure to do so is a common mistake that leaves companies discouraged from making real changes due to differences and other difficulties that arise.
But there are some amazing examples we can learn from. One of them is the Planet Positive initiative by Unilever, which includes plans to protect and restore 1.5 million hectares of forest, land and sea by 2030. Unilever incorporates environmental goals into its existing efforts, claiming it saves more land than it actually uses to grow renewable ingredients used in personal care and beauty products.
Quantify and be transparent
Many companies struggle to quantify the return on their ESG investments. However, finding a way to see the actual numbers can help streamline and improve your work.
One way to do that is to link the whole approach to a business case that helps track expenses and revenues. Furthermore, to maximize our efforts, we need to establish transparency that allows us to evaluate and strengthen all our practices.
Transparency creates an open environment in which all stakeholders can work together to improve project performance. This can only be achieved if we maintain open communication with our stakeholders. Such a model of cooperation should not only establish a high level of disclosure and accuracy, but also a practice of recognizing potential mistakes and willingness to correct them.
Sustainability is a major challenge for many companies around the world, but its practice certainly provides invaluable rewards for both the organization itself and the environment. Now that you have recognized all the benefits of sustainable business, you can join the movement and start implementing actionable steps that will help you take the lead in your industry.