Today, it is hard to have business conversations without sustainability coming out. Therefore, in this post, I want to shed some light on what we talk about when discussing sustainability, specifically, a Sustainability Strategy.
Sustainability can be defined in many ways, but one of the most often quoted definitions is the ability to meet the present needs without compromising future generations’ ability to meet their own needs. In this sense, responsible use of resources becomes key to this idea of continuity.
A more traditional approach to sustainability in business refers to doing business without negatively impacting our environment, community, or society as a whole to promote equal opportunities for present and future generations. However, the urgency of the current world’s most pressing problems, such as climate change, and the growing social inequalities, have challenged this approach. It now demands a commitment to positively impact our environment and community with the aspirational goal of regenerating our world. This is a broader concept that focuses on the quality of business decisions and their consequences. Sustainability in business is a mindset and a shift in the traditional way of thinking about business, moving away from a focus on shareholders’ profit maximization into one that emphasizes the responsibility of generating value for all stakeholders.
Now, what is a Sustainability Strategy?
Any strategic planning requires defining goals and steps with specific actions to achieve desired targets. Depending on the central issue addressed, a strategic plan can be either short or long-term. However, a sustainability strategy focuses simultaneously on both the short and long-term. It represents an organization’s commitment to finding the sweet spot where a business can be profitable while positively contributing to society and in harmony with our environment. In this scenario, social responsibility, sustainable production practices, a responsible supply chain, environmental care, and business philanthropy are expected to complement profits as a critical pillar of successful business management. A successful Sustainability Strategy provides an organized and prioritized framework to drive actions. It is unique to every company, its culture, and its people. Many businesses may have isolated “good” initiatives and practices. But a few good practices don’t replace a strategy.
An authentic Sustainability Strategy is driven by an organization’s purpose and values and comprises a set of commitments and actionable items that are fully integrated into the business model of that organization.
A Sustainability Strategy often encompasses three areas: Environmental, Social, and Governance (ESG). These three categories enable businesses to measure at a micro level the real impact they have on all aspects of society, including economic, social, and environmental. ESG metrics ensure the correct use of resources and provide quantitative information for a continuous successful Sustainability Strategy.
The graphic below shows an example of items traditionally included in a Sustainability Strategy.
A growing focus on ESG has confused executives on the relevance of clearly understanding the spirit of sustainability, and many have even deviated from the true essence of developing an authentic and meaningful Sustainability Strategy. Much has been discussed about disclosing information, metrics, and reporting frameworks, and millions of dollars have been spent just looking for ways to improve ratios, paving the way to greenwashing.
Sustainability in business is more than numbers and ratios. It is about decisions, actions, and results. Sustainability is an approach to changing unhealthy business practices, holding leaders accountable, and providing consumers with better options.
It may sound complicated, but it is as simple as looking at your business strategy from a fresh perspective considering:
Sustainability in business is the macro spirit of an organization focused on generating a positive impact while maximizing profits.
A Sustainability Strategy is planning how this organization will incorporate a sustainability lens in its business model.
ESG is the non-financial information that measures and reports on the actions decided on the Sustainability Strategy.
At Thinking Beyond Business, we develop a successful Sustainability Strategy that incorporates all aspects, risks, and opportunities unique to your organization. We are committed to making your business thrive and helping you drive change.
Regardless of size or industry, we believe every business has the capacity and responsibility to contribute to building a better world one action at a time.
Contact us, and we will help you design your Sustainability Strategy. Our guarantee is continuous support so you can generate a positive impact.