In the guide below, we outline some of the key aspects of sustainability in business.
We discuss what sustainability in business is, how sustainable businesses might differ to traditional businesses, sustainable business practices, current examples of sustainable business in the real world, and more.
Firstly, How Might Sustainable Business Differ To Traditional Business?
Sustainable businesses may generally consider a broader range of priorities than traditional businesses
Traditional business may have mainly prioritised economic objectives (such as profit), and also the interests of the individual business.
Sustainable business on the other hand not only consider economic objectives and business interests, but also objectives and interests relating to the environment, natural resources, and people and social groups (i.e. there are environmental and social components to consider, in addition to economic components)
We’ve previously outlined how sustainability includes all three of economic, environmental and social sustainability in a separate guide.
As we mention in the section below, sustainable businesses may also take the long term future into consideration, as opposed to mainly considering the short term
So, What Is Sustainability In Business? (A Definition)
Core Pillars Of Sustainability
Sustainable businesses might be businesses that base their business goals, activities, products/services, and impact around criteria or pillars that come from the core pillars of general sustainability
That criteria or those pillars might include:
– Being environmentally friendly i.e. reducing negative environmental impact & environmental degradation, such as impact on ecosystems, wildlife and biodiversity loss
– Sustainably managing and using natural resources, and protecting against resource depletion
– Being socially responsible, upholding certain social criteria/standards, and/or protecting certain human rights
– Meeting economic goals (such as generating and maintaining a profit), and pursuing the interests of the business
Short Term vs Long Term Consideration
As is the case for general sustainability, sustainable businesses may also have a goal to ‘Meet the needs of current generations, without compromising the ability of future generations to meet their needs’
So, there may be consideration for both the short term and long term impact of businesses and their activity on wider society.
Potential Importance Of Sustainability In Business
Based on the above two sections, sustainability in business might be important because:
– It may be a more balanced approach that considers a wider range of factors and stakeholders in society (such as the people/the public, the environment, etc.), beyond the business themselves
– It may take into consideration the long term future of society, as opposed to mainly prioritising short term goals
Sustainability In Business vs Corporate Social Responsibility (CSR) – Is There A Difference?
Differences
Multiple reports indicate that sustainability in business and ‘Corporate Social Responsibility’ (also referred to as CSR) are different things.
The key differences between the two might be:
– Sustainability has an emphasis on time, and how current actions by businesses might impact future generations
– CSR may place more emphasis on ethics and morals
The wikipedia.org article on ‘Corporate Sustainability’ has more information on the potential differences.
We also discuss the general differences between sustainability, ESG and CSR in this guide.
Similarities
However, the two may be related, and may have the similarity that they both consider other interests and stakeholders outside of primarily the businesses themselves.
*Different Reports Using Different Terminology For Either Concept
In their ‘Corporate Social Responsibility’ article, wikipedia.org also mentions that CSR can be called corporate sustainability, or sustainable business.
So, some articles use the same terminology to refer to either concept.
Examples Of Different Sustainability Indicators, & Different Sustainability Targets/Goals For Sustainable Businesses
There’s A Range Of Different Sustainability Indicators
There’s a range of sustainability indicators (which we’ve previously listed in this guide)
So, businesses have to choose the individual indicators of sustainability they want to target or focus on.
For example, one business may mainly focus on reducing carbon emissions, whilst another business may mainly focus on reducing waste.
Some business may focus on multiple indicators at once.
Examples Of Different Sustainability Indicators, & Potential Goals/Targets
More examples of the different sustainability indicators and potential targets/goals under those indicators, as they pertain to businesses, might be:
– Pollution
Reduce water pollution
Reduce air pollution
Reduce general waste pollution
– Emissions
Reduce carbon emissions
– Environmental Degradation
Reduce various forms of environmental degradation, such as deforestation, ocean degradation, ozone depletion, and so on
– Loss Of Biodiversity
Protect against loss of biodiversity
Examples Of Resource Indicators, & Targets/Goals
– Resource Depletion
Protect against the depletion of specific resources, with freshwater, and also different types of mined minerals being two examples
Examples Of Social Indicators, & Targets/Goals
– Worker’s Rights
Ensure all workers have basic rights and conditions in the workplace
– Health & Safety
Ensure workers and the general public are reasonably protected from health and safety risks that may arise as a result of business activity
– Social Opportunity
Provide social or economic opportunities to a local community, or help increase the quality of life within the community
– Specific Social Causes
Donate, volunteer for, or provide resources to specific social causes or social initiatives
Examples Of Economic Indicators, & Targets/Goals
– Profit
Ensure business activity runs a profit, and is economically sustainable
– Business Interests
Businesses have to be able to pursue self interest, build a customer base, build and protect a reputation and brand, deliver what it’s customers want, and ultimately successfully compete in the market place
Sustainable Business Practices
What Are Sustainable Business Practices?
Sustainable business practices are individual business practices, or sets of practices (that make up a business process for example), that help achieve sustainable business targets and goals.
General Practices vs Specific Practices
Some sustainable business practices might be more generalized practices that businesses across different sectors and industries might be able to use.
Other sustainable business practices might be specific to certain sectors, industries or individual businesses.
A List Of Sustainable Businesses Practices
Other Potential Sustainable Business Practices
Other than the practices listed in that guide, some other potential sustainable business practices might include:
– Using tools, systems, software, or technology to collect data on, measure, or track the performance of (or assess) sustainability indicators across business related activities, and factors that impact different sustainability indicators
Data collection, measurement and performance tracking of different sustainability indicators can help businesses gain more information on their actions, and make more informed decisions
There may also be some form of internal ‘sustainability accounting’ within a business to collect and sort data, before passing it onto other who can interpret and use data (and implement it within the business)
Some companies also use some type of ‘environmental profit and loss accounting’ to track the progress of their sustainability goals
One example of a measurement and assessment tool is a ‘Sustainability Balanced Scorecard’, which is a measurement/assessment tool that helps companies measure economic, environmental, and social performance. Companies can integrate strategically relevant financial and non financial short term and long term goals into this performance management system
Other examples of tools are carbon footprints, and also water footprints
– ‘Greening’ the supply chain
Some sustainability initiatives go beyond the product manufacturing stage, and encourage businesses to consider their supply chain i.e. where materials come from, how they are made, etc.
There may be ways to ‘green’ the supply chain to increase sustainability, with more transparency from suppliers, better tracing of where supplies come from, and guarantees on how supplies are sourced and made being some of the potential ways to do it
– Developing internal company policies specifically about sustainability
These policies may cover guidelines and practices relating to sustainability across various aspects of the business
– Having set periodic assessment procedures or reviews where businesses can consider making changes to, or adjusting parts of the business
For example, a periodic quarterly review may highlight new data that suggests that implementing a new business practice may help improve sustainability in a specific way
– Having opportunities for different stakeholders to discuss or give feedback on different sustainability issues
For example, different environmental groups, or different members of the community may he given an opportunity to voice relevant sustainability concerns directly to a business
This may be in the form of an event, a meeting, a forum, or some other opportunity
– Developing internal employee roles specifically for sustainability, and/or seek external professional consultancy on sustainability strategy and solutions
Employees may help develop documentation for policies and best practices, and help with the implementation of sustainability across the business
Consultants may give a range of advice on how businesses can become more sustainable
– Considering changes to product design where practical
Changing the design of a product, such as the material used, the chemistry of the material, and other features, can be one way to improve the sustainability of that product
A few examples might be re-designing a product to:
Use more eco friendly, sustainable, or safer materials (i.e. substitute and alternative materials)
Include a certain % of recycled material or recycled content
Be more recyclable, such as a tech product being modular or having detachable and replaceable parts
Extend it’s lifespan i.e. making it more durable, or making it last longer before it has to be disposed of
– Meet the standards or criteria set by independent or third party certification groups
Different independent and third party groups may set different social, economic and environmental standards that businesses have to meet in order to use their label on their products
Companies may look to meet these standards in order to gain certification
One example of this is third party certification for organic cotton, with GOTS Certification being one of the more well known certification programs.
Another well know example is Fairtrade, which might protect farmers and workers in various ways.
– Join industry specific ‘pacts’ with other companies to improve sustainability in certain ways
In some industries, with the fashion industry being one example, ‘pacts’ are developed and various companies can join them as a sign of commitment to making progress on specific sustainability goals
– Providing social opportunity and helping local communities
Provide employment, education, internships and training, and/or other opportunities to members of the local community where practical
Sustainable Products & Services Offered By Sustainable Businesses
A full analysis of sustainable products and services is outside the scope of this guide.
But, there’s a range of products and services that sustainable business may manufacture or offer across a range of sectors and industries.
We’ve mentioned one example in this guide below (organic cotton).
What Is A Sustainable Business Model?
The definitions for a ‘sustainable business model’ can differ between different reports.
But, some of the common features of a sustainable business model, from a range of different definitions available online, might be a business model that:
– Delivers value to all stakeholders (the business, but also people, the environment, and so on) across the community
– Achieves sustainability goals across one or several sustainability indicators
Sustainable Business Strategies
What Are Sustainable Business Strategies?
Some reports may refer to sustainable business strategies and sustainable business practices as similar things.
Other reports may refer to sustainable business strategies as more of the broader or higher level plans and policies that businesses have in place, compared to sustainable business practices which might be more the individual actions or individual processes a business might carry out.
Potential Examples Of Sustainable Business Strategy
A sustainable business strategy might be based on one, or several of the following principles:
– Adopting a business model that considers sustainable practices across the entire product or service lifecycle (and not just one stage)
The entire lifecycle includes but isn’t limited to sourcing/the supply chain, manufacture, product usage, and waste management
One example of this might be circular business models, which differ from linear business models
wikipedia.org discusses the concept of a circular business model in more detail in their report
– Setting up a business to be flexible and adaptable enough to change business practices as sustainable changes are identified, and as the market, regulations, or other factors change
More Information On Sustainable Business Strategies
wikipedia.org mentions corporate sustainability strategies, and states that ‘… widely practiced strategies include: Innovation [& Technology], Collaboration, Process Improvement … Sustainability Reporting [and also Greening The Supply Chain]’
They explain in more detail what each of these strategies involves in their report
What Is Sustainable Management In Business?
There might be multiple different broad definitions for sustainable management in business.
However, a general definition might be that it is the overall collection of ways that a business manages sustainability within the business, and also manages the external impact of their sustainable practices.
So, it might include the management of data collection, measurement, performance tracking and assessment tools, the management of different stakeholders, the management of making sure that sustainable practices are actually implemented and having an effect, the management of external third party certifications, and so on.
Different companies might have different systems or ways of managing sustainable business aspects across the company.
What Is Sustainability Reporting For Businesses?
Sustainability reporting for businesses is the creation of a report that covers various important aspects of sustainability for a business.
Some reports are published publicly for the general public, consumers, investors, and other individuals or groups to view
Sections that might be found in public reports might include a general statement or brief, specific goals/targets (along with outlining the benefits of these goals and targets), actual performance in relation to these specific goals/targets, impact on different sustainability indicators, and other report sections.
It’s common for well known companies to have sustainability reports publicly available on their websites, which might be published on an annual basis.
Other reports might be developed and used internally within a company for different purposes.
What Are Sustainability Tools For Businesses?
Sustainability tools for businesses may help businesses do a range of things, such as measure, track, and assess different sustainability indicators or business activity
Some tools may be more conceptual and less reliable or accurate, whilst other tools may show more accuracy and reliability in some ways
There’s a wide range tools that businesses may choose to use – some may be externally available tools, whilst other tools may be internally developed within a company
There’s different groups that may provide businesses with different sustainability tools.
The listed epa.gov report for example outlines a range of sustainability tools that companies might use for different purposes
Current Examples Of Sustainability In Real Businesses
At the time of publishing this post, we looked at some of the general sustainability goals or practices of some more well known global companies, as stated on their websites.
This information is generalized and paraphrased, and shouldn’t be relied upon as a substitute for the official information provided by the individual companies.
It should be noted that this information can also change over time
Always do your own independent research, and confirm sustainability information and practices of individual companies yourself prior to purchasing goods and services.
Apple
– Has a focus on more recycled materials, using more clean energy, and designing materials to last (i.e. increase their lifespan)
– Currently has ‘Product Environmental Reports’ which measure Apple’s progress through each device’s performance against different environmental priorities
Nike
– Have a ‘Move To Zero’ initiative, which is Nike’s journey towards zero carbon and zero waste
– Some of the waste being reduced is by the donation of worn athletic shoes and apparel, which might then be recycled, and also by offering ‘Refurbished’ products, whereby some eligible returns and open-box footwear might be available to purchase at a lower price
– Currently, also offers some apparel and shoe products that contain a certain % of recycled content by weight (which they identify on their website)
Tesla
– Tesla currently offers both transport products (such as EVs), and also energy products (such as their home battery system for energy storage), as some of their key industry offers
– Some of Tesla’s key sustainability actions might centre around more sustainable transport, reducing emissions, battery recycling, and energy storage (for more sustainable energy use)
– Tesla lithium-ion batteries are claimed to be recoverable and recyclable, and Tesla describes this option and the process on their website
– Tesla also makes annual ‘Impact Report’ available
Legislation, Regulations, Guidelines, Marketing & Advertising Claims, Labelling, & Greenwashing Relating To Sustainability In Business
What Is Greenwashing?
‘Greenwashing’ can sometimes be an issue for ‘sustainable’ products and services.
Greenwashing is when businesses make misleading or false claims about the products they are offering commonly via their marketing and advertising, their labelling, or the information they provide to consumers.
For example, they may indicate that a product is made in a certain way, or has a certain feature that makes it more sustainable, when this is not the case.
The Importance Of Legislation, Regulations & Guidelines
To better protect the consumer and prevent greenwashing, different countries and regions around the world might have different legislation/Acts, and also regulations in place which outline basic requirements that businesses have to abide by.
Guides/guidelines may also be developed as best practices for businesses to follow to avoid greenwashing.
There may also be commissions or consumer protection groups that help implement and update different guidelines.
Consumers should confirm what the relevant legislation/Acts, regulations and guidelines are, and consider who the relevant commissions or groups might be for the products and services they are considering buying in the country they live.
Examples Of Legislation, Regulations, Guidelines, & Consumer Protection Groups In The US
– Legislation/Acts
Specifically for textiles, the FTC Act and the Textile Act may provide some level of protection to consumers to prevent companies from making misleading representations
ftc.gov provides more information on these Acts and gives and example of how they have been used in the past
– Guides, & Consumer Protection Groups
The Federal Trade Commission is an independent agency of the US Government, who plays a role in consumer protection
The FTC has designed/developed ‘The Green Guides’, which provides information and principles for businesses and marketers to help them avoid making sustainability related claims (via advertising, marketing, labelling and so on) that could mislead or deceive consumers, and therefore avoid subsequent legal implications
Both ftc.gov and wikipdia.org provide more information on the FTC and ‘The Green Guides’
International Standards For Environmental Management Within Businesses
wikipedia.org has more information on ISO 14000, which is a set of international series standards (i.e. guidelines) for an ‘Environmental Management System’ within a business.
Independent Or Third Party Certifications & Standards For Sustainability In Business
A well known general business certification is ‘B Corporation’ Certification (which is for ‘for profit’ companies, and their environmental and social performance)
Some industries also have third party independent certification programs and standards for certain types of products.
These certification programs and standards operated by a certifying body provide their own criteria and requirements beyond the basic requirements that legislation or regulation might provide.
As, we mentioned above in this guide, one example of this is the third party certification for organic cotton, with GOTS Certification being one of the more well known certification programs.
‘Green’ Investment In Sustainable Business
There’s various ways that ‘green’ investment is taking place in sustainable businesses.
One example is via a ‘Sustainability Index’ listing on the stock market, where investors can invest in an index fund comprised of companies that meet certain criteria, such as ESG criteria.
We’ve written a separate guide about this type of sustainable investing.
Another example might be ‘Green Investment Banks’, and other groups that provide help such as micro loans, education opportunities, and other assistance to ‘sustainable small businesses’ in developing countries.
Potential Pros & Cons Of Sustainability In Business
Sources
1. https://en.wikipedia.org/wiki/Sustainable_business
2. https://www.ftc.gov/news-events/topics/truth-advertising/green-guides
3. https://www.ftc.gov/business-guidance/blog/2022/04/55-million-total-ftc-settlements-kohls-and-walmart-challenge-bamboo-and-eco-claims-shed-light
4. Hansen, Erik, Schaltegger, Stefan, 2016/01/01, 193–221, The Sustainability Balanced Scorecard: A Systematic Review of Architectures, 133, 10.1007/s10551-014-2340-3, Journal of Business Ethics, available at https://www.researchgate.net/publication/264938559_The_Sustainability_Balanced_Scorecard_A_Systematic_Review_of_Architectures
5. https://www.apple.com/au/environment/
6. https://www.nike.com/au/sustainability
7. https://www.tesla.com/support/sustainability-recycling
8. https://www.fairtrade.net/about/how-fairtrade-works
9. https://en.wikipedia.org/wiki/Sustainable_management
10. https://www.epa.gov/e3/e3-sustainability-tools
11. https://en.wikipedia.org/wiki/B_Corporation_(certification)
12. https://en.wikipedia.org/wiki/Corporate_sustainability
13. https://en.wikipedia.org/wiki/Corporate_social_responsibility
','' ); } ?>