A method of doing business that generates sustainable, long-term value for shareholders, employees, consumers, and society is referred to as “corporate sustainability.”
Investing in ESG may assist businesses in lowering their environmental impact, enhancing social outcomes, and improving governance.
Although there isn’t a one-size-fits-all method for adopting ESG, several standard components are frequently used, and you’ll need a plan.
Economic, environmental, and social sustainability are recognized as the three main components of sustainability by the World Business Council for Sustainable Development.
The Three Pillars Of ESG
Each pillar will be thoroughly examined in this blog article, along with suggestions on how businesses might use them to achieve genuine sustainability.
It will also include suggestions on how companies might go greener for the sake of the economy, the environment, and society at large!
Many businesses are working to minimize carbon footprints, packaging waste, water use, and other environmental harm.
These activities can benefit the economy in addition to the environment. For instance, reducing packing materials may save costs and increase fuel economy.
Walmart, for instance, focused on packaging as part of its zero-waste campaign.
It promoted using less packaging overall and sourcing more of that packaging from recycled or repurposed materials.
Because businesses are only sometimes responsible for the garbage they create, it is difficult to estimate the total expenses of land reclamation, wastewater, carbon dioxide, and waste.
Benchmark attempts to quantify these externalities so that their reduction may be tracked and reported in real-time. This is an important step to understanding the benefits of sustainability reporting.
Becoming Environmentally Sustainable
Small companies may contribute to a circular economy by making choices that ensure resource reuse and recycling while reducing waste.
- Consider establishing an environmental management system or discussing suitable methods with your industry organization.
- Utilizing goods that lessen your dependency on natural resources is another method to make your company more ecologically responsible (e.g., rainwater tanks and solar hot water systems).
- Do an environmental impact audit to determine how environmentally friendly your company is.
There are many ways to get and keep this kind of support, but in the end, it all comes down to treating employees properly and operating in a way that serves society.
The idea of social license is connected to the social pillar.
Businesses must be mindful of their supply chain threats to employees. Better maternity and family leave policies, flexible schedule options, and chances for professional growth are all possible perks.
Due to public outcry over workplace fatalities, several big shops have grappled with this (such as the Bangladesh factory collapse).
Becoming Socially Sustainable
Your company’s “brain reputation” will grow and your sales will increase if it is recognized for doing nice things for the individuals who work for it and the community.
- Try to locate charitable endeavors that support your community and your company’s goal and beliefs.
- Put the health and safety of your customers and staff first, and use ethical sourcing techniques.
- Think about enhancing your hiring procedures. Aim to employ a broad group of people with various ethnic backgrounds, ideas, and opinions.
- You shouldn’t participate in a supply chain that supports crimes against humanity or other atrocities.
- Participate in regional initiatives that assist your neighborhood.
Most firms believe they are on more stable ground in the economic pillar of sustainability.
In this context, “best interests of shareholders and the community” refers to how boards of directors and management conduct themselves.
Corporations should guarantee the minimal environmental impact of their goods and services, such as those derived from fossil fuels or chemical fertilizers.
They could also seek reassurance that they’re not buying favors through political donations.
Corporate decision-makers may now examine and adopt sustainability initiatives thanks to the inclusion of the economic pillar (and the acceptance of profit).
Maintaining Governance Sustainability
Here are some steps you must take to maintain sustainability—
- Maintaining a board of directors’ oversight of sustainability is increasingly integrated across numerous official board committees, although a separate committee can also do it.
- Additional supervision and strategic direction are provided by having a cross-functional executive committee that includes leadership from several business units, geographies, and functions.
- Having a core team can help with daily coordination and company-wide program implementation. For instance, NIKE Inc. has a Sustainable Business and Innovation team that is essential to integrating sustainability throughout the whole value chain of the business.
- Working groups or committees can aid in integrating strategy and objectives by assisting sustainability teams or even taking their place.
- Even though they aren’t formally a part of the governance structure, external advisory councils may be useful for advancing an organization’s goals.
Growing Businesses With Corporate Sustainability
For businesses to aim for sustainability, offer a bigger goal and some new deliverables for companies to aim for.
It may enable them to reaffirm their dedication to fundamental objectives, including effectiveness, sustainable growth, and shareholder value.
Public disclosure of a sustainability plan can result in hard-to-measure advantages like improved reputation and public goodwill.
John Elkington, a proponent of business sustainability, coined the phrase “people, planet, and profit” in the 1990s.
In recent years, “Mission” has been included to represent the increased customer interest in an organization’s corporate purpose. Think about performance rewards for actions related to the four principles.