You may have encountered the word “sustainability” in your business circles or networking events quite often. In fact, this topic was discussed in our podcast with Sydney Badger.It is a word we use interchangeably with “profitability”. Other entrepreneurs believe that if their business operates profitably year on year, then the business is sustainable. Well, that could be true but that’s just touching only one aspect of your operations.
While you may take sustainability as an overrated buzzword, it actually has been an idea conceptualized back in the 18th and 19th centuries. To understand more intensely the idea of business sustainability, it is best to know, first and foremost what it really is.
What is Business Sustainability?
The word sustainability, as Wikipedia suggests, means the ability to exist constantly. And, in order for your business to sustain its operations, it has to maximize its profitability without compromising environmental and socio-economic concerns and efforts. Looking at it more deeply, you can glean that business sustainability has a great deal to do with avoiding the depletion of natural resources and the negative social impact when operating your business.
So even when you generate 7,8,9- figures in income but you have no concern over the effects of your business operations to the environment and the community, it is not a guarantee that you will be able to sustain your operations for a long time. You are bound for a business failure if all you think about is how to rake in the cash.
But if you are serious about growth then you have to align your operations with the 3 E’s of Sustainability.
The 3 E’s of Sustainability
It would be easier to remember and to embrace business sustainability if we hold on to the balance of its 3 pillars – Economics, Equity and Environment. The aim here is for your business to be economically feasible, socially equitable and environmentally sound. If there is a clear balance of these 3 pillars in your business only then can you say that you are operating towards a sustainable business.
We have to admit that the primary goal of putting up a business is of course, to generate revenues and gain profit. Here we talk about maximizing profits, expanding your market, increasing competitiveness, developing new products and innovating supply and manufacturing chain. But it goes beyond profit, it also looks at the cost efficiency of your operations.
You must also be open to investing in sustainable practices that will allow you different opportunities for incentives. A more common example would be tax credits and rebates that are made available by the government to businesses that are actively implementing sustainable practices and improvements in their operations.
If you are operating a factory or a large office or store, it would make huge business sense to invest in renewable energy such as solar or biomass, to reduce your power utility expenses (which may alongside afford you the tax credits previously discussed). You can also initiate a paperless campaign in your office to reduce, if not eliminate the use of paper and thus, save on supply expenses.
These are just some of what you can do to manage your costs so you can maximize your profits.
When we say that the business must also be socially equitable, it means that it must promote equal rights of individuals of a community to access the resources that the community relies on. Some businesses in this day evaluate the social developmental impact of the projects that they are undertaking.
Will your business generate jobs for the people in your community? Will there be no people displaced when you implement your project? How will your business improve the lives of people? These are just some of the questions that other businesses ask when they evaluate the social aspect of their operations.
There is also a rise of Corporate Social Responsibility efforts of companies. There are those that advocate education and healthcare for the impoverished – donating school or hospital buildings, donating school supplies, sponsoring medical missions. There are also those companies that promote support to livelihood programs for indigents – provide training and workshops, provide initial supply of raw materials.
There is this one beverage company that launched a lighting project using their plastic bottles and simple solar technology, to towns that are not yet connected to the grid. In this way, they are introducing a new approach in recycling while providing for the lighting needs of a community.
In the course of implementing your social development projects or programs, you are also building up your image as a business that works not only towards profitability but towards sustainability.
The issue on global warming and climate change has been in the discussion table of different countries, governments, agencies and organizations. People now are more environment-conscious, thanks to social media that help broaden the awareness on the negative impact of environment-damaging practices.
This concerns the promotion of conservation of natural resources and reducing pollution and waste. Businesses are driven by this consciousness that they implement practices that aim to make their operations environmentally sound.
In product development, you do not only look at its marketability but also its impact to the environment. Will it generate waste or pollution? In the preceding example on the lighting project of a beverage company, the project is part and parcel of the recycling program of that company. The said program also included a building project using, again, their plastic bottles. Those that will not be used are processed in a Materials Recovery Facility (MRF) that the company set up in various towns.
The use of renewable energy to power your business is another initiative geared towards environmental protection and conservation. Other businesses launched tree-planting projects, clean-up drives while others launched water filtration and distribution projects in remote areas that do not have access to clean and potable water.
These are just some known efforts of different businesses in their drive to protect the environment, others have more established and developed programs
Coherent Business Strategy
Getting a balance of the three pillars of sustainability will provide a coherent business strategy that can take your business to greater heights. Equal attention should be accorded to each pillar. You must remember, they all must be present and working coherently. They must be manifested in every aspect of your operations – from sourcing, to supply, manufacturing, distribution and disposal.
With this business strategy you are also building a positive image of your brand and a good reputation for your business. Then, make use of the tools available to market your brand or your business as a sustainable one.
Business Sustainability is a Mindset
This is not a trend that will see its imminent end sometime soon. It is a mindset that every business owner like you must have if you want to see your business grow. Embrace this mindset and communicate your strategy to your management team down to your employees. Challenge them to think of innovations that can help the business achieve sustainability and reward them if they can do so. With an empowered team behind you, you can, all the more, work towards sustainability of your business.