Some companies still see sustainability policies as a threat to their business. Far from it. In the new economy businesses will soon realise that integrating sustainability into their business strategy will help them take advantage of opportunities, better manage risk, and increase their appeal for inward investment. At the same time, they’ll be helping improve the environment and create a fairer society.
We’ve examined some of the most common concerns businesses have when embedding sustainability into strategies. Then provided the reality, based on our practical experience.
- Cost. Some companies are overly focused on the initial cost of integrating sustainability into their business strategy; in terms of product development, evolving existing processes and the measurement of new outcomes. This, however, can be more than offset against cost savings, reduced risks (across supply chains for instance) and higher operational efficiencies.
Business governance. While redefining internal policies and updating your governance strategies may lead to change such as the restructuring of your leadership team’s responsibilities - and sometimes those of your board, improved governance will send out a clear statement of your business’s long-term sustainable intent. It will equally be invaluable as a competitive advantage for you, in attracting inward investment and motivating new and existing employees.
To provide further guidance, we’ve drawn up ‘A practical guide for boards and leadership teams on sustainability’, which offers guidance on engaging with sustainability.
Evolution not revolution. For most businesses, the task is not reinventing your business purpose but instead integrating sustainability into your existing company goals. It’s not, however, about being wholly sustainable from day 1. It’s a journey rather than a destination.
One of the most common challenges, therefore, is knowing where to start – and defining short, medium and long-term priorities.
Your company’s carbon footprint, the reduction (or elimination) of unsustainable materials and practices from your business need to be part of a phased strategy, owned by the company’s internal stakeholders and business partners.
Better alignment with the new economy. There is a growing demand for sustainability management from customers, investors and suppliers, so integrating it at the core of your business strategy also means meeting their demand for sustainable products and services. Sustainability is also proven to be linked to positive brand association. We can see, for instance, how it could be beneficial for medium-sized enterprises seeking to secure contracts with governments or larger companies.
The biggest risk is that businesses sit on their hands. Our personal experience is that a great many businesses are already well advanced in their business planning.
In this fast paced, ever-changing world that we live in sustainability has shifted from a perceived ‘nice to have’ addition, to an essential component for every business no matter the size. Driven by a move towards stakeholder capitalism and the recognition of the importance of creating long-term value, business as usual is no longer an option. The time is now to grasp ESG as an opportunity or risk becoming irrelevant. William Hughes Business Sustainability Consultant