To many, the benefits of running a sustainable business are manifest; to others, the reasons for shifting to more sustainable business practices are less clear. To manifest the business case for sustainability, some experts prefer to sum up the various advantages of a sustainable business model with the three Ps: profit, people, and the planet.
Generally speaking, profit is the reason most businesses get on board with sustainability. Though green practices might seem more expensive in the short term, in truth sustainable practices tend to cut costs and increase a business’s bottom line in the long term. There are three typical approaches to adopting a profit-focused strategy for sustainability:
- Businesses can take a systems-based approach. Business leaders should assess the systems they utilize in their business and find sustainable alternatives. Initially, this might involve investing in more expensive materials or refitting existing systems with costly new technologies. However, over time, those investments should prove to be more efficient, steadily reducing expenditures and increasing profit.
- Businesses can go low-tech. Advanced technology can and does improve sustainability — but so can a few impeccably deployed, low-tech changes to business strategy. For example, prioritizing maintenance on production equipment can reduce waste and recover a large amount of resources. Small changes can fuel other small changes, as businesses systematically expand their conservation efforts as the budget becomes available.
- Businesses can build sustainability into its business model. Though it requires a radical overhaul of a business’s current structure and strategy, building sustainability directly into operations often gives a company a unique edge in its market. Leaders can take a business sustainability management online course to better understand how to develop solutions for sustainability challenges.
An organization is by and for people — people make up its leaders and workers, and people make up its clients and customers. People are also impacted by the shifting environment, so a business’s sustainable practices (or its unsustainable practices) affect all people by counteracting (or contributing to) climate change.
Unfortunately, when making business decisions, many leaders tend to focus on only one group of people: shareholders. Generating value for shareholders is important, but it shouldn’t be a leader’s top priority. In fact, focusing too intently on building shareholder value could have the opposite effect, as employees and customers flock to other, more socially and environmentally conscious businesses. Instead, leaders should pay closer attention to generating value for stakeholders, a group that includes anyone with an interest in the success of a business. Stakeholders are a business’s employees, its customers, its community members, and, yes, its investors.
To appease stakeholders, business leaders should strive to effect positive change, both internally to benefit employees and externally to appease customers and communities affected by operations. Inside the business, leaders can alter their practices to improve sustainability and build a corporate culture of environmentalism and ethical behavior. Then, businesses might consider developing partnerships with sustainable nonprofit organizations, which can improve a business’s positive reach.
For too long, businesses have neglected the importance of a healthy planet, and this has by and large been the primary driver of climate change. A study on carbon emissions found that just 100 companies are responsible for over 71 percent of global emissions, which indicates that businesses possess a vast amount of power in altering the current course of environmental degradation.
Business leaders should feel obligated to do their part to keep the planet as healthy and productive as possible because reducing climate change is critical to a sustainable business strategy. Climate change interferes with business in dozens of ways, from disrupting supply chains to impoverishing consumers. A stable and thriving environment should be a top priority for the sustainability-minded business leader, not only because it is ethically right but also because it is a tactic for good business.
Every business leader has a responsibility to help the planet, not just those leaders employed by the largest organizations. Even the smallest company can take steps to reduce its carbon footprint in a meaningful way, and it can do so in ways that enhance a business’s profits and improve its stakeholders’ satisfaction.
I am Tristan who loves to ride and spend time with my jenny (horse) and my love Mark. After completing my graduation, I have been working as an accountant in a private firm in Cologne.