Our planet is not in a good shape: we are currently using the resources of 1.5 planets, and even more than this if we consider European and American standards. But, how can corporations and businesses be more sustainable? By implementing sustainable business practices! But What is a sustainable business practice meaning?
Sustainable business practices definition: actions allowing the company to create a positive impact on people, society, and the environment while also making a profit. Sustainability is an essential part of social and environmental responsibility in business today and it is a necessary step toward preserving our planet for future generations.
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What are sustainable business practices?
Sustainable business practices are balancing the 3 pillars of sustainability (3 Ps) and are a way to run a business in a way that is environmentally friendly and socially responsible. They help protect the environment and the people who live in it, while also saving money, reducing waste, and conserving natural resources.
The 3 pillars of sustainability are:
- Environmental sustainability: the planet
- Social sustainability: the people
- Economic sustainability: profit and growth
Given the above, here’s a sustainable business definition:
To achieve sustainable development in business, those 3 principles need to be balanced and taken care of all at the same time. So businesses should look at practices to improve all of these areas. You can think about this as if the company had 3 balance sheets: economic, environmental, and social.
There is also an alternative framework available that is based on 4 pillars. In this model, there is an additional human sustainability pillar that needs to be balanced. Essentially this alternative framework tends to give more importance to the satisfaction of human necessities to achieve sustainability.
Business sustainability from 0.0 to 2.0 and 3.0
Traditional management was focusing only on economic growth and profit. It didn’t include social and environmental sustainability. It was all about satisfying the shareholders.
There are 3 levels of sustainability in business, going from sustainability 1.0 to 2.0 and 3.0:
- Business Sustainability 1.0: This is also known as refined shareholder value management and it is when environmental and social sustainability are just considered as means to a specific end. With the target of the business still being just economic profit and success.
- Business Sustainability 2.0: At this stage, the business is aiming at improving and balancing a triple bottom line of sustainability: economic, social, and environmental.
- Business Sustainability 3.0: This involves changing completely the way a business looks at the issues. The aim of the business is no more to just try to reduce the negative impacts on the environment and society. Corporations are instead taking a proactive approach by actively contributing to solving the world’s sustainability problems. At this level, the business leaders will be examining the world’s problems and then looking at opportunities for how they can eventually develop solutions to improve sustainability! Unfortunately, not many companies are at this stage yet, but things are slowly changing.
Benefits of sustainable business practices
The benefits of becoming a sustainable company include:
- Lower operating costs
- Reduced environmental impact
- Increased profits due to greater sales volumes
- Higher employee morale and productivity because they are making a difference for the planet and society
- Better quality of life for everybody
- Reduced costs for consumers (e.g., reduced energy bills)
- Increased sales from consumers who are more likely to buy products from companies with good corporate sustainability programs
- Stronger public image and reputation for companies that are perceived to be more socially and environmentally responsible
- Improved customer loyalty, which can lead to increased sales and profits
To do this, the company needs to have sustainable business operations.
11 Examples of sustainable business practices
Here are some sustainable business practices examples that can help you to better understand this concept!
1. Renewable energy
Renewable energy is energy that is not depleted by use. It includes solar, wind, hydropower, and more.
Renewable energy is one of the most popular sustainable business practices because it allows companies to reduce the environmental impact while also saving money in the long run.
Renewable resources such as hydropower have pros and cons, however, they can be used for a long time without being depleted, unlike fossil fuels (coal, oil, and natural gas), which are examples of non-renewable resources and can be used up completely.
One of the main advantages of renewable sources over fossil fuel based power plants is that they don’t emit carbon dioxide (a greenhouse gas that contributes to climate change) into the atmosphere during their operation.
If you are considering solar energy for your business, make sure to review the questions to ask a solar company before signing a contract.
2. Environmentally friendly products
Businesses should be aware of the impact their products have on the environment. Here are some guidelines to help your business make environmentally friendly choices:
- Prefer energy-efficient products: this applies to both the products made by your business and the products used by the company.
- Avoid harmful chemicals and materials by using environmentally friendly alternatives. For example, instead of using a disposable plastic bag, use an eco-friendly reusable cloth bag or paper shopping bag.
- Reduce waste through the 6 Rs of sustainability, looking at ways to reuse, recycle, and compost. Avoid buying single-use items that will quickly end up in a landfill.
- Source locally: when possible, try to source raw materials locally.
- Design products that are easy to repair. This will help reduce waste and increase the longevity of your products.
3. Recycling and reduction of waste
Recycling is one of the easiest ways to help the environment. It requires no additional effort from the business but does help reduce waste by using fewer newly extracted materials.
You can also reuse items as much as possible and think about what impact packaging has on the environment. For example, if the business needs to dispose of a lot of cardboard, then definitively look into baled cardboard recycling. Did you know that the company can also make a profit and get other important benefits by simply recycling cardboard?
4. Sustainable packaging
Sustainable packaging is about creating and using more sustainable materials. There are many ways to reduce the amount of packaging used, such as:
- Recycling or reusing materials from your products and packaging
- Using reusable containers (such as glass jars) or other storage options
- Use biodegradable materials to create compostable packaging with pre-marked recycling symbols on them. This makes it easy for consumers to dispose of their products correctly when they’re done using them
Composting is a sustainable business practice that can help you reduce the amount of waste that goes into landfills.
It’s also good for the environment because composting turns organic waste into fertilizer, which helps plants grow and reduces the need for synthetic pesticides and fertilizers. And because compost is rich in nutrients, it’s perfect for growing food crops like tomatoes (as long as squirrels and deer don’t eat them).
Composting keeps food out of landfills by recycling food scraps and garden trimmings from green areas instead of throwing them away or sending them to landfill. And when these resources are used as compost ingredients, they benefit your community and also help to create new jobs!
6. Ethical sourcing
Ethical sourcing is a form of business practice where manufacturers and brands are ethically sourcing their products to ensure that they are produced in a way that respects human rights, workers’ rights, and environmental protection practices.
Why businesses should be ethical sourcing and manufacturing?
Ethical manufacturing means making sure that workers are treated well, can be paid fair wages and have access to safe working environments.
It also means making sure there’s no child or slave labor involved in the production process. This is why many companies now choose to only source from suppliers which are following good standards on these issues and also perform ethical audits.
Ethical sourcing is a sustainable business practice that helps the company to improve social sustainability.
7. Sustainable Supply Chain Management
Sustainable supply chain management is a practice that aims to minimize the environmental impact of products and services from their inception through consumption. It involves identifying, analyzing, and reducing the environmental impact of all aspects of your business: from materials used in manufacturing to transport methods and final disposal.
Sustainable supply chain management can help you:
- Reduce waste by ensuring you use resources efficiently
- Improve energy efficiency by reducing energy consumption for production or shipping materials to customers
- Reduce pollution by using materials that are more eco-friendly.
- Improve labor conditions by ensuring workers are treated fairly and paid a good living wage.
8. take care of employees and their workplace
Employees are the heart of any corporation and business. It’s important to take care of them in order to create a healthy workplace and achieve social and human sustainability for the business.
Building a culture where everyone feels valued and cherished is key to creating an environment where people enjoy going to work each day.
It’s also important for the business to provide opportunities for growth, so employees can continue growing as individuals while also contributing with their talents towards the success of the company.
9. Corporate environmental responsibility
Corporate environmental responsibility is a sustainable business practice that helps companies manage their environmental impacts.
Companies can reduce their environmental impact by minimizing waste, recycling and reducing pollution. They also may work with suppliers to reduce their own environmental impact.
Corporate environmental responsibility is not a new concept. It’s been around since the 1970s but only recently has become more popular in the US, especially among large companies that want to differentiate themselves from other businesses on this issue.
10. Corporate social responsibility
Corporate social responsibility is a sustainable business practice where companies are developing programs that help the surrounding communities and society at large.
Corporate social responsibility includes things such as:
- Promoting equality and inclusivity: keeping a diverse workforce and supporting minorities in the business.
- Corporate citizenship: The idea of corporate citizenship is to create a company culture where employees feel empowered to make positive changes in their community.
- Corporate philanthropy: This refers to giving back financially or through volunteering time by corporations, not just employees but also shareholders as well. Corporations can give money directly or use other means such as grants or donations for specific projects like building houses for disadvantaged families in need.
- Corporate Giving Programs: This is a mechanism used by companies to promote goodwill among customers and employees while helping the community at large.
11. Sustainability Reporting
Sustainability reporting is a way for companies to communicate their sustainability performance to stakeholders.
It can be done through a variety of means, such as annual reports or corporate websites that provide information on the company’s environmental and social impacts.
Sustainability reporting is also an important aspect of the Environmental, Social, and Governance scoring system (ESG metrics). As a result, a corporation following sustainable business practices will be more appealing to institutional ESG investors.
Companies should consider how they will be measured in relation to their competitors when designing their reporting structure. For example, if you are comparing two products or services side by side in terms of how they impact the environment, then it might make sense to include all aspects of sustainability in one document. So as not to give any advantage over another product/service being compared against yours.
However, if you are comparing the performance of your company against others in a particular area (such as energy use), then it may make more sense to break down your reporting into different sections and compare yourself with other companies that have similar operations.
Why are sustainable business practices important?
Sustainable business practices are important because the environment is our shared responsibility. When we make a decision to use resources in a way that doesn’t harm the environment, we are doing our part to protect it for future generations.
Sustainable businesses are able to reduce waste while still providing value for customers by using renewable resources (like solar power), recycling materials or composting food waste instead of throwing it away altogether.
They also help not only reduce pollution but monitor how much energy they use so they can be more efficient with the business’s operating costs as well as save money overall on operating expenses like heating/cooling etc.
Sustainable business practices can also be good for the company’s bottom line: they help companies reduce costs and become more competitive by reducing waste and recycling products.
In fact, according to the United Nations Environmental Programme (UNEP), “Sustainability is not just about protecting nature; it’s also about ensuring people’s right to live in harmony with their surroundings.”
A company that practices sustainability can also build a more loyal customer base. When people feel like they are making a difference by purchasing products from an environmentally and socially responsible business, they are more likely to buy from that company again.
What companies should use sustainable business practices?
Sustainable business practices can be implemented by any company, regardless of size or industry. In fact, many large corporations have implemented sustainable business practices as part of their mission statement.
They may be doing so because they want to improve their image by being more environmentally friendly and socially responsible.
In the future, thanks to blockchain will support sustainable business practices, by making it easier for companies to report and demonstrate their eco-friendly commitments.
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Sustainable business practices are designed to ensure that businesses will thrive while also looking after their impact on the environment and society.
This is important as it helps ensure that future generations can continue to enjoy the same benefits we have today. Nowadays there are many examples of sustainable development showing how to achieve this.
I believe that sustainable business practices are a core part of any organization’s strategy. They go beyond just being good for the environment and include building relationships with customers and employees as well as growing the bottom line!