Sustainable businesses employ a three-pronged strategy:
- Preserve the environment and conserve natural resources.
- Build social equity, support employee well-being and promote fair trade.
- Maximize long-term profitability and promote growth.
This holistic view of doing business places equal emphasis on the planet, people and profit. You’ll often see the concept referred to as the triple bottom line.
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Definitions of Corporate Sustainability
The definition of a sustainable business varies depending on the field. For example:
- In agribusiness, corporate sustainability can encompass concepts such as organic farming, urban horticulture and permaculture.
- In manufacturing, sustainability efforts may include waste elimination, greenhouse gas reduction, finding the most efficient and profitable use of existing resources (such as oil, gas, ores and forests) and creating energy-efficient infrastructures.
- In retail, sustainability experts often focus on the supply chain, evaluating ways to minimize waste in packaging, facilitate energy use in stores, transport goods in more eco-friendly ways and recycle old products.
Corporate sustainability also has a strong social component. Factors like leadership diversity, equitable CEO-to-average worker pay ratio and low employee turnover all play an important part in sustainability rankings.
Benefits of Sustainable Business
In addition to saving the planet, sustainable practices generate a number of benefits. These practices help a company:
- Save Money: Employing eco-friendly technologies and cutting down on waste in energy, resources and employee time generates significant annual savings. Even simple steps like turning off computer monitors can have an effect.
- Boost Market Share: Lean, efficient businesses with a reputation for earth-friendly profits now attract a lot of attention from savvy investors, new customers and the press. Investors, in particular, like to see that cost-saving measures are in place.
- Create Green-Collar Jobs: Thanks to an increasing focus on sustainability, a lot of new titles have been introduced into our lexicon, including passive solar building designer, wind energy engineer and energy-efficient construction worker. Some believe that renewable energy development could create millions of new jobs.
- Attract and Retain Employees: Businesses with fair and ethical practices are like catnip to highly qualified employees. Happier workers also tend to perform better, circumventing the expensive process of firing and rehiring.
Examples of Sustainable Business
For examples of sustainable business, start with the Global 100 Index. This independent, annual list from Corporate Knights ranks the world’s 100 most sustainable companies. Businesses are scored on 12 key performance indicators, including factors such as energy and water productivity, employee compensation and employee turnover.
In addition, consider the following two examples.
Walt Disney Company
Recognizing its investment in the next generation, Disney has taken a number of steps to strengthen its sustainable practices. It:
- Discloses company figures in the Global Reporting Initiative (GRI), an independent body that covers the economic, environmental and ethical impacts of a company’s performance.
- Integrates environmental practices (such as running Disneyland trains on biodiesel made with hotel cooking oil) in each of its resorts.
- Employs an International Labor Standards (ILS) program that evaluates and helps address working conditions in facilities producing Disney-branded products around the world.
Winner of the Guardian’s 2013 Sustainable Business Award for “Society – impact,” Olam is a global agribusiness company that sources its produce from 3.5 million smallholder farmers. In 2011 the company launched the Olam Livelihood Charter (OLC) to formalize the company’s commitment to invest in the rural communities of emerging countries. This charter is built on eight key principles, including improved yield, market access, social investment and environmental impact.