As the effects of climate change and global warming become more apparent, it’s clear that businesses must act. If we want a better future for the next generations, it is up to them to change their social and environmental impacts. Since over 90% of businesses are SMEs and SMBs, it will fall on middle market companies to lead the change. Companies are recognizing the need for sustainable practices in order to continue operating responsibly as well as profitably. Establishing a sustainability policy is one way that many companies are taking tangible steps toward making sure they’re part of the solution. Below we outline why developing a strong sustainability policy is so important for your business today.
As the business world moves towards a more equitable future, companies are seeing an increasing focus on sustainability. With energy efficiency becoming increasingly important and relevant green legislation continually changing, it is essential for every company to be more transparent in their operations. While the task may seem onerous, there are processes to make it easier. Nonetheless, it is important because it will eventually be directly tied to financing options and consumer confidence.
- What is sustainability for business?
- What is ESG?
- What about sustainability for SMEs and SMBs?
- How do I get started with sustainability?
- How is sustainability performance measured?
What is sustainability for business?
Just so we are all on the same page, in the same book, let’s start at the beginning. Sustainability for business is defined as practices or processes that help companies become more transparent. This means changing their social and environmental impacts, while simultaneously contributing to a better society. This goes beyond simply reducing emissions and pollution but rather incorporates an entire range of social, economic, and environmental responsibilities into every strategy.
What are the benefits of a sustainability policy?
Having a strong sustainability policy in place for your business can bring about numerous benefits. Firstly, it can help to demonstrate that you are taking steps towards becoming an ethical and responsible company. Legislation is changing and consumer expectations are changing and it is no longer acceptable to just claim that you are doing your part. Proving your sustainability will lead to increased customer loyalty and new opportunities. Additionally, it can put your company ahead of the competition as investors, environmentally conscious customers, and other stakeholders recognize your commitment to the future. This could result in improved financial performance and greater access to capital. Furthermore, a strong sustainability policy can help you meet legal requirements as well as reduce your costs by improving energy efficiency and increasing resource efficiency.
What is ESG?
When it comes to sustainability, ESG stands for Environmental, Social and Governance. This is a framework to assess the sustainability of a business, which takes into account a company’s ability to meet environmental responsibilities, social responsibility practices, and corporate governance. ESG has become increasingly important in recent years as investors seek to invest their money responsibly by evaluating companies on these three criteria. Companies that score highly on ESG criteria are often more attractive investments.
What about sustainability for SMEs and SMBs?
While ESG factors and sustainability have been a requirement for publicly traded companies, more and more smaller businesses are looking to embrace sustainable practices in order to stay competitive. Whether it’s implementing waste reduction strategies, offsetting climate impacts, or improving the working conditions of employees, sustainability is important for small and medium-sized businesses just as much as large corporations. Whereas you may not have a board or shareholders, you still have stakeholders who you need to demonstrate your sustainable practices. These include customers, suppliers, employees, and the communities in which you work and operate.
Where did sustainable development originate?
Sustainable development was originated in 1972 in the United Nations Conference on the Human Environment. The concept was further developed by the World Commission on Environment and Development in 1987 with its report “Our Common Future”, which laid out a global agenda for sustainable development. Its main focus is to meet human needs without compromising future generations’ ability to do so. Sustainable development has since been adopted by many governments, organizations, and companies around the world as an integral part of their policies, practices, and business commitment.
How do I get started with sustainability?
If you are looking to start a sustainability program for your business, it is important to start by understanding the concept of sustainable development and what it means for your industry, as well as the necessary steps to implement it. Make sure you familiarise yourself with relevant regulations and standards, research best practices in your industry, conduct an environmental impact assessment, and develop a plan for implementation. Additionally, you should consider consulting with sustainability experts or organizations that can help you identify practical solutions for your business. Finally, make sure to measure the progress of your sustainability initiatives to ensure they are effective.
Overall, sustainable development is an important and necessary concept for businesses of all sizes as it can help them benefit from competitive advantages, financial and legal benefits, and improved relationships with stakeholders. By taking the right steps and investing in sustainability initiatives, companies can demonstrate their commitment to responsible business practices that will benefit both them and the planet.
How do we get started on our own sustainability policy?
The initial investment in your own sustainability policy will become the cornerstone of your overall strategy. For organizations looking to build or enhance their sustainability initiatives, there are a range of resources available, including certifications such as ISO 14001 and B-Corp certification, software solutions to measure and track performance, guidance on how to write an effective sustainability policy, and more. Additionally, many governments offer funding and grants to help businesses implement sustainability practices.
The next step is to create a strategy, setting out goals and objectives that are aligned with the business’s values and mission statement. This will include research on your social aspect, your ethical efforts, and an environmental policy. After this, you should review existing operations for potential areas of improvement, such as reducing energy and water consumption or introducing waste management solutions. Don’t forget your supply chain, their collective carbon footprint, and their environmental targets. Finally, measure and monitor progress to ensure that your sustainability initiatives are having the desired effect.
The success of any sustainability program requires a long-term commitment and dedication from all stakeholders, including management, employees, investors, and suppliers. Setting achievable targets and taking actionable steps towards meeting them is essential for businesses aiming to become more sustainable. By understanding the importance of sustainable development and investing in it accordingly, companies can create long-term value for their organization, the environment, and society as a whole. And then, just continually improve on it.
You can’t improve what you don’t measure.
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How is sustainability performance measured?
Performance is measured through KPIs or key performance indicators which are specific, measurable goals that an organization sets to track its progress. Common sustainability KPIs include energy and water consumption, waste management, usage of renewable resources, carbon footprint calculations, and emissions reduction. Additionally, social KPIs such as employee wellness or customer satisfaction can be used to measure how successful a company’s sustainability practices are. Lastly, financial KPIs can also be used to measure the economic benefits of sustainability. For example, a company might measure its return on investment (ROI) in terms of cost savings or revenue generated from sustainable practices. By measuring performance in these areas, companies can identify opportunities for improvement and ensure they are taking the right steps towards achieving their sustainability goals.
What about our natural resources?
When it comes to using natural resources, businesses should strive to use them responsibly and efficiently. This can be done through reducing waste disposal, investing in energy-efficient vehicles to reduce carbon emissions, reusing and recycling materials to consume less energy, and taking public transport. Also using green fuels, and employing alternative sources of energy such as solar or wind power will reduce your impact on the environment. Wastewater usage is often commonly overlooked when trying to cause less waste, even for forward-thinking businesses. Additionally, businesses should look for ways to reduce their consumption of finite resources such as water and fossil fuels. By doing so, companies can help protect our planet’s finite resources and contribute to a more sustainable future. Ultimately, sustainability should be seen as an opportunity rather than a burden. An opportunity to preserve the quality of life for future generations.
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Dean Emerick is a curator on sustainability issues with ESG The Report, an online resource for SMEs and Investment professionals focusing on ESG principles. Their primary goal is to help middle-market companies automate Impact Reporting with ESG Software. Leveraging the power of AI, machine learning, and AWS to transition to a sustainable business model. Serving clients in the United States, Canada, UK, Europe, and the global community. If you want to get started, don’t forget to Get the Checklist! ✅