Implementing sustainability strategies for the growth of a business.
Introduction
The world is changing every second. The global population continues to rise, increasing the demands of the global population. With this increase so does the utilization of the natural resources of our planet earth. With this intense use of the environmentally unfriendly resources, we are facing natural & unavoidable situations like global warming and climate change. The utilization of non-renewable energy resources since the past decade has shown us the detrimental consequences that are occurring around our natural environment. The ocean levels and the global temperatures are depicting a rising trend due to this extreme use of non-renewable resources to cater to the rising demands of the human population.
This paves the way for new businesses to emerge to supply and cater to this ever-increasing need andwants of the global population. With businesses emerging the use of the earth’s natural resources also increases. But for how long can the Earth provide us with these natural resources to cater to our needs? I assume that it will not be long until earth will be able to sustain us anymore. Therefore, the importance of Sustainability is proven to be an integral factor for the survival of the living beings. Sustainability is abroad framework that will ensure that the present generation will use the natural resources in a moreresponsible manner so that the future generations can meet their own needs. It is built upon three basicpillars which are defined as the triple bottom line. They are listed out as follows.
1. Social Sustainability
2. Environmental Sustainability
3. Economical Sustainability
Sustainability for businesses
Did you know? A recent study has shown that more than half of the end-users/consumers are keen to spend more than 5% for products that are delivered in a sustainable manner. Another 76% are willing to wait one extra day for delivery for a climate friendly delivery method of their purchases. This is a clear indication that sustainability is an integral form of performance indication for a business to strive in the corporate world.
For a business to thrive in terms of profitability one of key ingredients they should implement is a clear and a concise strategy stating its clear commitment towards sustainability. By having such a strategy, the results would ensure the survival of the business. This will ensure that the value of the brand of the business will increase thus resulting in more profits. Studies have shown the businesses which have a clear and concise sustainability strategy have 20% increased revenue, 16% cost reductions in the business operations and 30% increased brand value.
Sustainable supply chain management
It is said that even organizations that manufacture products that do not consume any form of energy 70% of their eco footprint lies within the supply chain. This is a clear indication that businesses should focus more on creating a more sustainable supply chain for their operations and to strive in the ever-competitive corporate world.
The following are the ways a business can implement to manage its supply chain in a more sustainable
manner.
● Request the relevant suppliers to carry out the basic audits in terms of water and energy.
● Transition to less toxic materials and inputs.
● Improve and measure the recycling & waste reclamation efforts.
A business can initiate to build a sustainability strategy by first communicating with the relevant major suppliers who provide external resources for the operation of the business. This includes the raw material suppliers. Using sustainable materials will be a key aspect of a business’s sustainability strategies. Eliminating the use of toxic and harmful materials will ensure the product the business produces and sells to the customer is more sustainable in terms of the natural environment and the other sustainability aspects.
The methods that can be used to implement a successful sustainable strategy are listed out as follows.
1. Implement the sustainability metrics for water & energy use along with the materials.
2. Communicate the expectations of the overall sustainability strategy with the relevant suppliers which includes supplier questionnaires and the code of conduct. This shall ensure that the suppliers are also adhering to the relevant sustainability measures as implemented by the business.
3. Use data related to sustainability to identify the suppliers. Categorize them accordingly and eliminate the worst performing suppliers in terms of sustainability before they enter the supply chain.
4. Choose the best suppliers according to their sustainable practices categorizing them into the supplier performance evaluation. This will ensure that the business will be able to retain the best sustainable suppliers.
The business organization can make it a mandatory requirement in the supplier contracts to ensure that the suppliers. Critical evaluation can be implemented to ensure the supply chain is sustainable. Although it is not enough for making the supply chain itself sustainable. The business itself should do their own audits in terms of the energy and water use. A certified energy auditor or the local utility company can provide auditing services as required where the relevant personnel of the business can get an insight on their weekly, monthly, or daily basis energy usage. By obtaining these data necessary actions can be implemented to reduce the energy and other utility usage throughout the business premises.
Business in the modern era has tough competition. We are competing in a world with a finite number of natural resources. Therefore, the importance of having a business sustainability strategy is now more important than ever. Stakeholder engagement is a vital factor when developing a business sustainability strategy. Modern stakeholder engagement in a corporate environment is primarily focused on the following main areas.
● Risk management: Managing any risks pertaining to the business.
● Corporate Social Responsibility: Building relationships upfront before they are needed and avoiding issues from emerging.
● Customer needs: uncovering or validating customer needs. Discovering what customers really need. Expect or want.
● Innovation: Seeking new voices & opportunities to drive innovative ideas.
Although when engaging with stakeholders there are a couple of factors that need to be considered.
a. Should be specific.
b. Choose carefully.
c. Be open and authentic.
d. Engage early as possible.
e. Have an internal champion.
f. Be sure to engage the critics.
Employee engagement for sustainability strategy development
In any corporate organization the key essential personnel involved with the daily functioning and success of the business is the employees working across cross functional departments. It has been found that in a global perspective < 1 in 3 employees are engaging in their work. Approximately 1 in 5 employees are disengaged in their work.
In the US 40% of the companies now programs to engage their employees on sustainability initiatives.
When an organization initiates sustainability programs there are numerous benefits for the organization
a. Attract Millennials.
b. Retain employees.
c. Minimize the waste generation and consumption.
d. Mitigate risks associated.
e. Reduce absenteeism.
By introducing training on the concept of sustainability more the employees would be aware of the organization’s commitment towards the betterment of the society. The organization can motivate their individuals on the concept of sustainability by rewarding them for their participation and commitment towards the sustainability strategy as set out by the organization.
Developing more sustainable products through sustainable innovation
By implementing a sustainability strategy, the business can focus more on inventing/manufacturing products that are environmentally friendly , Socially acceptable, and economically viable. Research should be carried out on the potential target markets to identify the customer requirements and then finding a sustainable solution. This would be a long term and an exhaustive process but having a sustainable business strategy would make it easier.
With the sustainable strategy in place an organization will be able to develop more eco friendly economical friendly products that will enable them to be profitable and thrive in the respective target market.
To develop a sustainable product an organization can implement the following methods.
1. The use of alternative eco-friendly materials that are less harmful and toxic.
2. Minimize and monitor the use of energy throughout the production process. Implement smart manufacturing technologies to increase the production efficiency and reduce the waste generation.
3. Use eco-friendly and recyclable packaging simultaneously reducing the packaging.
An organization with a clear vision entailing a sustainability strategy will always be able to thrive in this challenging corporate world. The business should always link the SDGs (Sustainable development goals) to its products. For this, inputs should be taken from the entire business which includes the relevant personnel from different departments. This shall enable them to gather different ideas that can then be streamlined accordingly.
The organization can create a sustainable product portfolio to showcase its products that are environmentally friendly which will attract a larger audience than before.
Increase operational efficiency.
Another key aspect of a business sustainability strategy is to improve its operational efficiency. Energy consumption reduction is an integral factor that needs to be considered in terms of operational efficiency. The use of NG, electricity, oil, water and other energy resources should be minimized in terms of increasing the organization’s operational efficiency.
Some of the common ways an organization can implement to increase its operational efficiency is summarized as follows.
● Request the local utility providers to assess the current energy usage of the organization.
● Energy assessment can also be done using online tools to determine the annual, weekly, and monthly consumptions in terms of electricity, NG, oil, water, and other energy resources.
● Use energy efficient lighting systems that use LED, CFL and fluorescent lamps.
● Use renewable energy sources such as solar panels to generate clean and green electricity wherever possible.
● Motion detection systems can be installed to switch off lights automatically.
● Use skylights and many daylights whenever possible.
● When replacing old equipment, verify the new ones are energy star rated.
● Use more laptops instead of desktops as they consume less electricity compared to desktop computers.
Managing water resources will also contribute towards the operational efficiency of an organization. The following questions need to be answered to implement a strategic method to reduce the over-consumption of the water resource in the business.
1. Does a strategic plan exist to manage water use efficiently?
2. What is the annual water consumption of the organization?
3. How do the vendors use water and is it a part of the organization’s compliance strategy?
4. How does the business’s product use water? Is it a water exhaustive product? If so, what are the suggestive action plans to use the product more efficiently?
5. Is water a material value & are you disclosing water use?
The above factors shall play a crucial part in determining the operational efficiency of a certain business.
Risk Management.
Operating a business comes with many challenges and hurdles. As the corporate world becomes competitive on a daily basis the businesses should adapt to the new changes. There is an increased amount of legal requirements that needs to be satisfied by a certain business to function. With the ever-growing concerns on our natural environment more legislations and compliance requirements have come into force.
There are growing restrictions and compliance requirements for business in terms of sustainability. This includes,
1. The raw materials used for the products/processes and services.
2. Byproducts generated due to the specific business operation process.
3. Safety concerns in terms of the natural environment and the well beings of the humans and other living beings of the planet.
These regulations often arise from various industrial initiatives, Governmental organizations and from consumers as well.
If a certain business does not meet the legal compliances and regulations, they shall be penalized in terms of criminal sanctions and civil penalties. This will eventually lead to disastrous consequences such as a negative picture through the media, loss of revenue and profits.
With these regulations in mind a business should make necessary action plans to implement the relevant strategies to go beyond and above the stipulated regulations and compliances as set forth by the relevant standard and compliances organizations. This will eventually result in the following characteristics.
1. Positive reputation
2. Lower costs
3. Better quality products and services.
4. Strong innovation.
The stakeholders involved in the operation of the business should be well aware of the new compliances and regulations at all times. This will help the business not only to survive but to thrive in the respective business sector they are engaged in.
Businesses should be fully aware of the following factors especially when managing the associated risks.
● Know how the products are manufactured. Including the key materials and processes used.
● Plan ahead always.
● Develop a contingency plan.
● Control who makes the products.
Businesses should also stay up to date at all times in terms of the legal compliance requirements to ensure that it thrives in the respective business industry. The business should maintain a healthy value chain which provides stability and quality as they’re better managed. A value chain is a set of activities that adds value to a certain product/service.
Some of the good characteristics of a high performing value chain can be listed out as follows.
● Conserving resources during the business operations and activities.
● Economically viable.
● Safe and healthy.
● Resilient.
● The processes and activities do not pollute the natural environment.
Make sure the products satisfy a real need of the consumer. Make sure they are ecological. Implement the circular economic model where the 3R principle is practiced. Reduce, reuse, and recycle whenever possible to eliminate the generation of waste. The businesses can also implement a strategy to obtain products from consumers when its end of life (EOL) is reached and reward them. By obtaining such products the business can reuse or recycle parts or the entire product itself. The businesses should also ensure that the workplace is hazard-free by implementing the regulatory compliances and rules.
Conclusion
Having a sustainability strategy will be an advantage for a business over other businesses which do not have such a strategy. It will assist the business to gain more revenue and reputation in the respective industry simultaneously contributing towards the global sustainability drive. Devising such a strategy should involve every stakeholder in the business where a wider range of ideas can be considered to develop a feasible and an effective sustainability strategy to improve the business in many ways. It will also help to meet the legal regulations and compliances as stipulated by the relevant organizations to ensure that it delivers high quality and safe products for the consumer’s needs.
References
David Bennell, Sustainable Strategies [2020]. LinkedIn Learning
https://www.linkedin.com/learning-login/share
