Why is it so important to create a sustainable and circular business?
- A sustainable and circular business earns profits by being socially responsible and protecting our use of the planet’s resources.
- Sustainability and circularity focuses on balancing that fine line between competing needs.
What are the six reasons why sustainability is so important for companies? They are:
- Reason #1: Best sustainability performers outperform their traditional competitors
- Reason #2: Resource efficiency
- Reason #3: Laws & regulations
- Reason #4: Reputation of your brand
- Reason #5: Your employees care about sustainability
- Reason #6: Business opportunities
What is sustainability?
Sustainability studies how natural systems function, remain diverse and produce everything it needs for the ecology to remain in balance as well as protecting it from damage and destruction.
What is a sustainable business?
A sustainable business earns profits by being socially responsible and protecting our use of the planet’s resources. 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 – profits, people, and the planet –a term coined in 1994 by John Elkington.
What is the focus of sustainability and sustainable development?
Sustainability and sustainable development focuses on balancing that fine line between competing needs.
- Our need to move forward technologically and economically, and the needs to protect the environments in which we and others live.
- Sustainability is not just about the environment, it’s also about our health as a society in ensuring that no people or areas of life suffer as a result of environmental legislation.
- It’s also about examining the long-term effects of the actions humanity takes and asking questions about how it may be improved.
What are the three pillars of sustainability?
In 2005, the World Summit on Social Development identified three core areas that contribute to the philosophy and social science of sustainable development.
The Brundtland Commission described it as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs”.
Pillar #1: Economic Development
- This is the issue that proves the most problematic as most people disagree on political ideology what is and is not economically sound, and how it will affect businesses and by extension, jobs and employability.
- It is also about providing incentives for businesses and other organisations to adhere to sustainability guidelines beyond their normal legislative requirements.
- The supply and demand market is consumerist in nature and modern life requires a lot of resources every single day for the sake of the environment, getting what we consume under control is the paramount issue.
- Economic development is about giving people what they want without compromising quality of life.
Pillar #2: Social Development
There are many facets to this pillar.
- Most importantly is awareness, legal protection of the health of people from pollution and other harmful activities of businesses.
- It is also about maintaining access to basic resources without compromising the quality of life.
Pillar #3: Environmental Protection
- We all know what we need to do to protect the environment, whether that is recycling, reducing our power consumption by switching electronic devices off rather than using standby, by walking short journeys instead of taking the car.
- Businesses are regulated to prevent pollution and to keep their own carbon emissions low. Environmental protection is the primary concern of the future of humanity.
Why is sustainability important in business?
A McKinsey study reports that most companies are not actively managing sustainability. Yet, the best sustainability performers beat their competitors on sheer economic grounds.
Here are six reasons why sustainability is important for your business:
Reason #1: Best sustainability performers outperform their traditional competitors
- Accenture’s study of 275 global Fortune 1000 companies analyzing business and sustainability performance metrics shows that the top 50 companies ranked on sustainability outperform the bottom 50 by 16% when it comes to shareholder returns over a three year period.
- Over five years, the results are even more in favor of the best sustainability performers: the top 50 outperform the bottom 50 and middle 50 peers by 38%.
- So the best sustainability performers make more money.
Reason #2: Resource efficiency
- One important factor driving economic performance is resource efficiency.
- As companies deal with depletion of resources, environmental impacts, and materials security, they seek new and improved ways of doing what they do.
- Resource efficiency is also an area where it’s very important to be forward looking.
Reason #3: Laws & regulations
- It is very important to pay attention to the law and regulations.
- Even if a business is meeting the letter of the law, but is violating its supposed social contract in some way, it can attract consumer boycotts and loss of revenue.
Reason #4: Reputation of your brand
- Most traditional companies act only when the reputation risk becomes real, and causes damage to share prices and revenues.
- The key here is to understand why the business may be vulnerable to sustainability-related risks, prioritize and monetize them, and then introduce mitigation strategies.
- Attracting and retaining talent is also influenced by the company’s sustainability reputation.
Reason #5: Your employees care about sustainability
- Employees are the reason why businesses want to do better when it comes to sustainability.
- This is because the employee knows the most about how a business is really operating, and can often see through greenwash or corporate untruths.
Reason #6: Business opportunities
- New sustainable products are opening up major new markets and creating fabulous business opportunities.
- These opportunities span from clean technologies, such as renewable energy generation, to sustainable sourcing in the food and agriculture sectors, to innovative design that makes our businesses and homes more efficient.
Who can improve business sustainability?
- Effecting change throughout your company takes leadership and skills to make effective decisions in regard to strategic sustainability that benefit the business, employees, customers, and the planet.
- Business owners and executives need to identify the most effective sustainability strategy and spur innovation.
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I look forward to helping you through your change process!
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