Does sustainability mean profitability?
Now, more than ever, there is talk of sustainability. But we are not just interested in the talk. Attention should increasingly be paid to the business impact of sustainability. Key is, how corporate responsibility – or lack thereof – impacts staff, customers and investors.
What is genuine sustainability?
For years, companies have been paying attention to environmental issues. How to save electricity, how to save paper, how to make recycling more efficient. However, sustainability is much more than ecological good deeds. Sustainability is about thought and behavioural patterns. And the company's impact must be evaluated more broadly than simply how its staff operates or how it saves in costs. Every organisation should consider five dimensions of sustainability: profitability, employees, customers, the wider community and the environment.
Many companies have defined their own sustainability policies, with common denominators often being climate issues and the need to comply with international standards. Policies, goals and reporting alone are not always enough; truly effective sustainability requires that sustainable values guide business and decision-making at strategic and concrete levels. A business must also identify the negative effects of its own operations and try to minimise them as part of normal day-to-day service. An even stronger role is played by companies where the business model itself supports sustainable development.
When it comes to functioning responsibly, evaluation must also extend beyond a company’s own operations to the sustainability of partners and the supply chain. Choosing sustainable partners is one way of investing in responsible companies that provide solutions to global challenges.
Who cares about sustainability?
While the organisation's management and board of directors guide their operations and determine all the ways in which sustainability will impact their business, they do not make decisions solely on the basis of their own ethical views and principles. They must take into account the expectations of their staff, customers, partners and potential investors in all decisions.
Today, both customers and investors make decisions based on how sustainable a company is. Thus, it is clear that sustainability is important to a company's performance. Similarly, if sustainability is ignored, there will be a direct impact on business: customer relationships will crumble, investors will lose faith and the company may even be scrutinised by the media. Loss of reputation can happen instantly, whereas rebuilding it takes time.
Investing in sustainability will reward your business in the long run as legislation becomes more stringent. A reputation for being a good, reliable and sustainable company goes a long way and is also a means of engaging employees and partners.
How can sustainability be strengthened?
When the ethical norms and guidelines that influence operations are in place, a business is only at the starting point. It is essential to communicate openly both internally and externally.
Greater transparency in terms of policies and practices will build trust that will increase competitiveness.
Furthermore, transparency also has a multiplier effect: communicating about policies teaches stakeholders to demand sustainable products and services from other actors as well. Similarly, setting up partnerships with sustainable companies can set a positive example.
Looking to the future, the interests of the organisation and its customers must be linked to the interests of society. Traditionally, business has been divided into B2C (business-to-consumer) and B2B (business-to-business), but in the future everyone will also have to operate in the B2S (business-to-society) market. In this market, partnerships are made to promote greater societal benefits.
Learn more about how a sustainable partnership improves competitiveness.