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What is Sustainability in Business? Its Importance, Challenges, and Benefits

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In general terms, sustainability is something that is associated with longevity. Something that is lasting, durable, enduring, continuing. Modern use of the term sustainability has broad usage. This can be associated with various domains, most prominent being environment, economic and social. The underlying meaning is simple – meeting our needs without compromising the ability of future generations to meet theirs. This means being less exploitative and more ethical & inclusive in all aspects to continue meeting future needs.

# What does Sustainability Mean in Business?

Sustainability in business means doing business without negatively affecting the environment, communities and society at large.

Thus, the concept of business sustainability has these three pillars: 

  • Economic
  • Social
  • Environmental

Economic Sustainability: Ensure that economic systems are not broken and all communities across the globe have access to resources, financial or otherwise. They should have access to all economic activities like secure livelihood sources to meet their needs.

Social Sustainability: Ensure that labor rights, cultural rights and personal rights and liberties are respected. These rights should also be protected from discriminatory practices. Universal human rights should be attainable to all communities.

Environmental Sustainability: Natural resources should be consumed in a way that there is scope for replenishment. This is to ensure that Earth’s environmental and natural systems are balanced. Using sustainable materials, reducing greenhouse gas emissions, relying more on renewable energy sources are some of the areas that environmental sustainability covers.

# Examples of Business Sustainability Practices

PepsiCo regularly comes out with sustainability reports which measures the company’s progress over years on its sustainability goals.

Example of economic sustainability: One of the goals defined was to support practices and technologies to promote improved farmer livelihoods and agricultural resiliency. This is measured by the total percentage of sustainably sourced raw materials for all its food products as per the principles laid down by PepsiCos Sustainable Farming Program.

Example of social sustainability: It has goals defined for human rights, diversity and prosperity. This includes safe working conditions throughout their value chain, gender parity in management roles, pay equity program (where base compensation is almost the same for men & women in the same role), diversity in hiring, investments in education and training programs for women to be ready for being part of the workforce. As responsibility towards society at large, it has goals to reduce added sugars, sodium and saturated fats from its product portfolio. This is to ensure better health for consumers.

Example of environmental sustainability:  Some of its goals towards the environment are to use more of recyclable packaging, reduce greenhouse gas emissions and improve water use efficiency in agricultural supply chain.

# How can a Business be Sustainable?

There are many different ways you can make your business sustainable: reducing waste, preventing pollution, adopting clean energy, conserving water, planting trees, using sustainable materials, and adopting sustainable business travel policies. Although most of those measures speak for themselves, sustainable business travel may require a little more explanation. Sustainable Business Travel encompasses all methods that incorporate the effects of business travel, such as: encouraging employees to alternate, greener transportation rather than flight, limiting the need to travel by hosting video conferences, etc.

# Why is Sustainability Important?

Sustainability is important for a very simple reason: we have to keep the quality of our lives, the diversity of life on Earth and the Earth’s ecosystems intact for ourselves and for our future generations. When we reduce dependence on fossil fuels and stop the rapid climate change, we can make sure humans and millions of animal & plant species would be safe and will thrive. If we don’t consider change, we will harm the environment beyond repair, and the root of that change lies in understanding and striving for sustainability – in our own homes, in our communities, in our ecosystems, and around the world. Environmental sustainability notes that human-caused rates of extinction of both plant and animal species are hundreds of times higher than the natural rate in the past.

#  Who Can Improve Business Sustainability?

There are many steps that each person can take to live and work more sustainably. When it comes to improving sustainability in business, there are some people who are in a unique position to change or to influence.

  • Business Owners and Organizational Leaders:- Change in an organization takes effect through organizational leadership through effective top-down decision making. Business owners and leaders who possess organizational skills possess the critical qualities to make strategic sustainability decisions that benefit the business, its employees, its customers, and the planet. The leader is perhaps the most important link in the series. Owners and executives have the requisite knowledge to identify the most effective sustainability strategy and initiatives, as well as the full power to change all policy and spell innovation. 

  • Business Administrator, Manager, and Supervisor:- Individuals who have unique insights into the day-to-day operations of any business are administrators, managers, and supervisors. The future of business administration requires preparation to solve complex problems through a unique approach, as well as a combination of skills and expertise for creative sustainability. Administrators, managers, and supervisors can provide valuable insights. Because of a more hands-on role, he has a different perspective and understanding of how business sustainability can be improved and what we can do for it.

  • Human resources professional:- Human resource practice is very essential for building and managing sustainable businesses. The human resources department in your organization can play an important role in the development, formulation, and implementation of company-wide sustainability policies. They can help incorporate these policies into the company’s culture and create a sustainable change in your business. It is important to create a company culture that represents your values ​​and is sufficient for employees to share their ideas, including about sustainability. The HR team can act as a cultural ambassador, helping employees and recruits feel recognized and valued as key drivers for sustainability.

  • Employees:- Sustainability initiatives do not always come from the top down. An employee could also have a valuable contribution e.g. using a cycle for transportation, recycling plastic waste, welcoming diversity in the workplace, contribution to causes  etc. All businesses should encourage their employees to speak and share their ideas to become more sustainable. Employee outcomes can contribute to both stability and profitability. Also, the Stanford Social Innovation Review reports that sustainability goals can “improve employee retention, productivity, and overall engagement.”

# Benefits of Sustainability in Business

Here are some benefits of Sustainability in business:

  • Innovation, competitive advantage, and revenue growth.
  • Better efficiency and increased productivity.
  • Increase business capacity to comply with the regulation.
  • Cost savings due to a reduction in resource utilization.
  • Better brand image and competitive advantage.
  • Satisfaction of shareholders and stakeholders.
  • To meet customer expectations and suitability for tenders and contract bids.

# Challenges to Improve Sustainability in Business

Here are some of the biggest hurdles that businesses, especially small ones, face when trying to become more sustainable:

    • Lack of resources:- Some businesses feel that they do not have the necessary resources: namely, time and money – to implement sustainability strategies properly and effectively.
    • Inability to measure success:- It is impossible to know if your efforts are worthwhile if you cannot measure the results correctly. Instead of worrying about what other businesses are doing, try to do what matters to your organization.
    • Unengaged Personnel:- Whether it is with upper management or your employees, it can be difficult to implement your sustainability initiatives when others in your organization do not support them, take them seriously, or care. Taking the initiative, try your best to take input from everyone.
    • Lack of focus or Planning:- A vague, unfocused plan to go green can easily overwhelm your business as you try to make a profit at the same time. Try to focus your attention on one or two major issues that you care about the most or think will have the most impact on you, then branch from there. Your plan should include an assessment of how a long-term sustainable initiative can cut costs and increase profits if possible. If you cannot find a profitable strategy, then pay attention to the aspect of cost reduction.

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