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Sustainability is becoming more important for all companies. With plenty of opportunities arising from trends in worldwide sustainability, many companies, and their leaders are adopting sustainable development plans in response to social and environmental issues that affect their business operations. Consumers worldwide have become more and more likely to associate with and remain loyal to a company that incorporates sustainable practices into its business.
As per a survey by Mckinsey, more than 50% of executives consider a sustainability strategy necessary to be competitive today. And yet only around 30 percent of executives say their companies actively seek opportunities to invest in sustainability or embed it in their business practices. One potential reason so many companies don’t actively address sustainability despite the attention paid to it by the media and some consumers and investors is that many have no clear definition of it. They lack manpower, funds, or even just a clear roadmap of where to go and how to get there.
How can companies build a sustainability agenda?
With sustainability, we need to understand that there is no “one right solution”. The best solution depends on the ambitions and stakes of each company. Here we are going to first take a look at a few examples of industry leaders who successfully incorporated sustainability, followed by basic guidelines to incorporate sustainability in your own business.
List of companies that made a difference:
- PepsiCo: PepsiCo presents its sustainability goals and annual reports since 2005 focusing on Human Sustainability, Talent Sustainability, and environmental sustainability. By 2025, they plan to reduce added sugar and fat in products, design 100% of their packaging to be recyclable, and reduce the waste they generate by 50%
- Nike: The sports brand integrates sustainable design across its products. In 2011 they created the Making app, revealing the sustainability index of their materials to the public as a part of promoting transparency and inspiring other manufacturers to create a more sustainable design, too.
- Ford motors: They’ve reduced their global waste by 5.5% in 2018 and got a 14.5% reduction in water use since 2010. They are planning to switch to 100% renewable energy for all manufacturing plants globally by 2035. They have also invested millions in electrified vehicles, promote volunteering, and support minority, women, and veteran-owned businesses, celebrating diversity and enhancing people’s lives the way they can.
The above three examples have one thing in common, that is these firms have all made strong commitments to sustainability, in large part through transparency and addressing material issues. And they all have a long-term vision and clear goals. They have evolved from knowing to doing and from compliance to competitive advantage. One thing that every company needs to understand is that sustainability is a long-term investment. One needs to have a proper vision and long-term goals if one wants to succeed today.
Guidelines for planning a successful sustainability strategy:
- Establish a clear sustainability objective: Corporate sustainability is an achievable goal, provided that organizations plan and include their sustainability strategies within their corporate agenda. The first and most critical step when planning a sustainability strategy is having a clear vision and commitment. The leadership of the company needs to establish clear goals about what they want.
- Asses and Prioritise: The second step is mapping and prioritizing related risks and opportunities across different markets. Every industry has its sustainability challenges and opportunities depending on the markets where they source, manufacture and sell their products. You also need to understand that you may not be able to achieve all of the sustainability goals from day one. You need to prioritize your goals.
- Commit and Collaborate: The third step involves proactively setting targets and goals. Once you have established your objectives and completed your assessment, you need to commit. Set up deadlines to achieve those goals. There is an increasing number of companies setting up science-based targets. The best option for brands to overcome complex sustainability challenges and achieve bold commitments is to build the right partnerships with key stakeholders, from NGOs, governments, and academia, to suppliers, retailers, logistic companies, innovative start-ups, and waste management companies
- Engage with Stakeholders: As a business, you can do everything possible to ensure the drive of your environmental and social impacts within your operations, but you can only advance in a big way if you align with all the stakeholders. If you want to make an impact you need to engage with your business partners, your manufacturers, suppliers etc. as well as your customers.
- Measure and Report. The next step involves selecting the right metrics to keep the sustainability strategy on track. There is no point in setting goals if you will never know whether you achieve them or not. Although the SDG framework provides a set of 169 targets and over 200 metrics that can be used to track progress towards these goals, the Sustainability Industry Survey reveals that in 2019, just above a third of the professionals were aware of their company’s engagement with the SDGs.
- Educate and Communicate: Being sustainable doesn’t just mean making your company sustainable. A successful sustainable business needs to share its knowledge with others as well. They need to encourage other companies to become sustainable too. Brands that disclose their results and learnings, both internally (with the shareholders) and externally (with governments, investors, customers, employees, business partners, and local communities) are perceived as more transparent which further adds to their brand values. Global companies are launching powerful messages and catchy slogans to demonstrate their actions and commitments to building a more sustainable future.
In conclusion, it is safe to say that sustainability is a major challenge, one that matters beyond individual companies. But it is the need of the hour. A focus on sustainability appears to be a must for a business to succeed today. For those willing to become more sustainable in business, focusing on shifting away from a consumer-based economy to a conservation-based one is a must.
It is not just about conserving our planet. Post-pandemic data has shown that today sustainable businesses have less risk associated, are more successful, and are more likely to survive financial crises as compared to businesses that don’t incorporate sustainability agendas.