Carbon Offset Demystified: Your Complete Guide
What is a carbon offset? How do they differ from carbon credits? And why should a company invest in a carbon offsetting project?
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The three main pillars of corporate sustainability are economic, environmental, and social – as these are the three factors most imperative for achieving corporate sustainability. 🙌
Corporate sustainability often operates under ESG principles.
The ‘E’, ‘S’, ‘G’ in ESG reporting stands for, “Environmental, Social, and Governance” – otherwise known as the three key components that companies will use to determine the environmental efficacy and sustainability of their cooperation.
Corporate sustainability is the goal to establish a valued, well-balanced business through the utilization of business strategies that focus on the fiscal, ethical, environmental, and sociological sectors of said business.
It is the ideal that a successful business does not solely focus on any one factor, but rather a multitude of areas in order to achieve consistent results – therefore, the term : corporate sustainability.
Sustainability is finding a way to meet the needs or goals of your project or company without forsaking the potential for future individuals or businesses looking to achieve the same accomplishments.
For example: let’s say you’ve decided you want to start growing your own plants at home. It’s beneficial to you, as you’ll save money in the long run from buying produce at the grocery store – but also better for the environment as it’ll reduce waste from the plastic packaging most produce inevitably comes in.
Life gets in the way, and it turns out – watering all of your plants everyday is too difficult. Most of your plants don’t make it through the week, making your newfound project unsuccessful and ultimately unsustainable.
Is there a way to still accomplish your goal to grow and eat more plants at home, without making it too strenuous of a responsibility?
There is : start with growing 🌿 and watering 💧 less plants.
Once you have been able to successfully grow and harvest those plants, you can then begin to work your way up to a greater level of sustainability.
Corporate sustainability is similar to the concept of wanting to succeed in growing your own plants at home, except it encompasses a larger goal and impacts more than one person – as in an entire company.
The objective of a company striving for corporate sustainability isn’t to only benefit those operating in the corporation or the company itself, but to benefit those utilizing the potential positive impacts those services and products provided by the corporation could yield.
The ultimate goal of corporate sustainability is to ensure that all the pillars: environmental, economic, and social – all are benefiting and complementing one another for an all around smooth, effective, and successful business.👏
For instance, let’s take a look at a popular company like Amazon. What allows Amazon to consistently achieve corporate sustainability?
They are constantly attending to the three pillars of corporate sustainability : environmental, social, and economic.
Amazon has stated their mission to support the prevention of climate change: they aim to reduce water usage, package their products that will eliminate waste, and to work towards operating with only renewable energy sources by 2025.
Amazon pertains to the social pillar in corporate sustainability through their power of globalization. Amazon exists in many countries around the world, therefore – it’s not uncommon for friends or families across the globe to mention buying or watching something on amazon, despite where they are in the world.
Lastly, Amazon has contributed to economic growth – especially in the United States. Not only does Amazon help perpetuate cultural, capitalist American ideals that help stimulate the economy, such as Cyber Monday in November after Thanksgiving – but Amazon has created more job opportunities than any other company in the U.S. in the last ten years.
All of these elements that Amazon has successfully implemented continue to directly, positively impact each individual pillar of corporate sustainability (i.e., the economic growth helps stimulate social growth, etc.) – making Amazon a continued success around the world.
Corporate sustainability refers to the balanced success of a company while simultaneously benefitting those using their products or services, whereas corporate social responsibility is to operate a business with the sole intent of the welfare of society and the consumer – and how to best serve them rather than both the business and those using the companies services.
The main goal of corporate social responsibility is to promote equality and ease (otherwise, the environmental and social pillars), rather than invest in the economic pillar as well, as corporate sustainability does.
The three pillars of corporate sustainability are the Environmental Pillar, the Social Pillar, and the Economic Pillar.
The Environmental Pillar pertains to the dedication a company has to reducing waste and their carbon footprint. This pillar often gets the most attention, as it directly impacts the social and economic pillars. It is often more cost effective to be environmentally friendly, and will attract other consumers as well as benefit them if the product or service doesn’t produce a large carbon footprint.
However, ensuring the environment stays fit is futile if the employees of said company aren’t well-rested or properly motivated to support the fight against climate change.
The Social Pillar strives to support the consumers, community, and employees associated with the business. There are various approaches to supporting the social pillar, but they mostly focus on the well-being of the employees.
The supply chain is one of the most important aspects of ensuring an equitable working environment for employees. This includes providing a safe work environment, fair pay, and prohibiting child labor as a means to justify the end product.
Employee benefits like paternity or maternity leave, sick days, vacation time, and alternating shifts all factor into the supply chain and ultimately – the social pillar of corporate sustainability.
But there’s still one thing, no matter who is able to admit it or not – that makes the world go round.
And that’s money.
The Economic Pillar is the financial aspect of the business or project. Money, unfortunately – is the ultimate resource, and a company must be profitable in order to be sustainable.
Factors that pertain to the economic pillar, otherwise known as the governance pillar, include risk management – where a company or project must analyze or accept the calculated risk of a particular investment, and how it will ultimately impact them financially.
All three pillars of corporate sustainability deserve equal attention and dedication to cultivate a successful project or business.
First, a company should operate based on a principled business. A principled business is when a company has a clear mission and an honest incentive to achieve a goal, while still respecting the rights of their employees and the values of their consumers.
If this moral doesn’t exist in the company to begin with, such as respecting human rights, anti-corruption, or labor laws – corporate sustainability can never fully, truly be achieved.
Second, a company should aim to strengthen society. Strengthening society is only possible when a company holds the capability to look outside their own possible financial, social, or environmental gain – and seek how their products, services, or actions can ultimately benefit others.
A company cannot be successful if there is continued inequality present in society : such as poverty, global conflict, or an unfair distribution of resources. A business or project is far more likely to succeed in a society that is already thriving itself.
Third, a company should contribute to the idea of leadership commitment. If the CEO of a company is not an exemplary, encouraging mentor or manager – how can other employees in the corporation operate passionately or efficiently?
Someone fulfilling the role of a leader must be open-minded to training and motivating employees, whilst also remaining prepared to pivot when necessary : such as making changes to policies within the company, even if potentially difficult – if it means ultimately yielding a greater level of corporate sustainability.
Fourth, a company should be alert to keeping track of their progress. Reporting progress in one’s corporate sustainability or overall contributions will help a business or project actively monitor what is helping them to achieve the desired results and greatest success for their corporation.
The fifth and final sustainable thing a company must do according to the UN Global Compact is implement local action. Local action explains the concept that a business should convey their mission and morals depending on the locale of which they are operating.
For example, as explained before with Amazon – promoting special sales or deals on Cyber Monday would work well in the United States, and stimulate their economic pillar, but would that approach be as successful for Amazon in New Zealand?
It is important for a company to dedicate time to networking, researching, and cultivating genuine partnerships within the community they work in order to further solidify sustainability and pertain to the country in which their corporation operates.
Essentially, the premise is simple. The more work a company puts into prioritizing corporate sustainability now, the less they need to put energy into their overall success in the long run.
Corporate sustainability is like building up your endurance for a run. Once you’ve built up your endurance, it’s easier to run for longer, burn more calories, and keep working towards the goals you set for yourself – even the ones you thought you couldn’t achieve before.
Longevity in a company is nearly guaranteed if corporate sustainability is made a priority.
Here are five tips!
More often than not, a company makes a promise to reduce their carbon footprint – and then doesn’t take any concrete action to follow through.
If a company strives to correlate their mission statement with sustainability – it will be easier to ensure that an effort to reduce carbon emissions is made, and create a stronger sense of trust with the consumers.
If sustainability co-aligns with strategy, the incentive and importance of environmentalist ideals will directly benefit the other pillars of sustainability.
Similar to employing strategy parallel to sustainability, a company should focus on what their market values before justifying their competitive edge.
Both consumers and investors are more likely to buy a product or partner with a company if the values of the corporation's sustainability are firmly in place.
It’s like cooking a meal – it all starts with quality ingredients. Once you’ve acquired the building blocks, the praise and loyalty of your hard work will follow.
Similar to reporting progress, if a company is honest with their success and failures – it can lead to further growth.
Aiming for transparency with both employees and customers is compulsory to improve a company’s corporate sustainability.
Why do YouTubers make videos with other YouTubers, or artists join one another to sing their new songs?
For networking, promotion, and growth!
Collaborating with other companies can allow for a deeper understanding and incentive to achieve corporate sustainability.
When a company prioritizes the well-being of their entire supply chain, it demonstrates a strong sense of respect for the community.
You can’t have a successful business or fight against climate change without people who are taken care of and motivated to work, and a company can only put forth their best efforts to do both if their team is fully-functioning and intact.
These are just a few of the many ways your company can work towards building corporate sustainability.
If reading this article about corporate sustainability has made you interested in reducing your carbon emission to further fight against climate change – Greenly can help you!
Greenly can help you make an environmental change for the better, starting with a carbon footprint assessment to know how much carbon emissions your company produces.
Click here to learn more about Greenly and how we can help you reduce your carbon footprint.
Take the first step towards reducing your carbon footprint by requesting a free and non-binding demo with one of our experts today and finding the solution that best fits your business needs.
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