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What is renewable energy, and why is renewable energy beneficial to the planet? Can renewable energy ultimately reduce climate change?
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Why Sustainability Strategy Is No Longer Optional for Companies
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Many endeavors in the business world are optional, but one that is becoming increasingly imperative is sustainability strategy – and not just because it can help to save the planet, but because businesses are likely to suffer without a viable plan in place.
What is a sustainability strategy, why is it important that businesses make the time and effort to develop the right sustainability strategy for their business, and what are the consequences if they don’t?
What is a sustainability strategy?
A sustainability strategy, sometimes also referred to as a corporate responsibility strategy, is a set of actions which provide a guideline for companies to pull their focus towards investments and improve performance levels – and also engage their stakeholders. A sustainability strategy will often include ESG principles such as environmental and social issues, in addition to the economic impacts of a company’s activities. Ultimately, a sustainability strategy can help companies to cultivate greater value without causing harm to the environment or society.
👉 A good sustainability strategy always starts with a company determining their main mission focus and reasoning for creating the business in the first place. This helps companies develop the appropriate and most suitable sustainability strategy for their business.
In order to curate a viable sustainability strategy, companies must be determined to focus on the issues which pertain to their company the most – and be willing to work through complex situations for the sake of sustainability.
“ The main goal of a sustainability strategy is to identify long-term risks and opportunities in order to propel a business forward and bring value to both the company and society. ”
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What are some key elements to a sustainability strategy?
One of the most crucial parts to any sustainability strategy is to implement goals and initiatives that will help to encourage sustainability across the company. Examples of this include creating a plan to actively reduce greenhouse gas emissions, reduce superfluous consumption of finite materials, seek to implement energy efficiency wherever possible, cultivate a sustainable supply chain, and aid in supporting society in whichever way possible.
👉 However, this is not a definitive list, and there is much more that can be done to implement a sustainability strategy – as different strategies are likely to work best for different companies.
Here are a few of the most commonly used strategies and key elements for a sustainability strategy:
- Defining Clear Goals: Companies cannot achieve their goals if they don’t properly set them in the first place. Therefore, this is the first and most imperative step to a successful sustainability strategy.
- Engage Stakeholders: Seeing as ensuring stakeholders are engaged in business operations is a key part to a successful company, it is imperative to identify and encourage stakeholders (such as employees, customers, investors, suppliers, or even the surrounding communities) to contribute their concerns regarding the business and how its values align with its main mission.
- Identify & Manage Risks: Risk assessment and management is not only key to a resilient supply chain – but for a good sustainability strategy, too. Monitoring ESG risks such as environmental, social, and governance risks can help companies remain cognizant of their potential roadblocks.
- Reporting Performance: Transparency is perhaps the most pivotal element for any company seeking to become more sustainable. Aiming to disclose emissions and sharing sustainability performance and progress can help to cultivate greater trust among stakeholders.
- Collaboration: Partnering with other businesses, organizations, and even governmental bodies can help to improve a businesses reputation and promote sustainability.
- Dedication to Long-Time Improvement & Innovation: A sustainability strategy is likely to change over time as the world and company both develop – meaning that active effort to be adjustable to any necessary changes is crucial for any successful sustainability strategy. In addition to this, remaining eager to implement new ideas and technologies whenever possible is vital.
Ultimately, a viable sustainability strategy will not only benefit the company in question, but also help to improve the surrounding environmental and societal circumstances.
Why is a sustainability strategy important?
In today’s world, a sustainability strategy is more important than ever – as it can provide a wide array of benefits to companies such as helping to attract and keep stakeholders engaged in the company, create opportunities for creativity, and lead to long-term financial success and a more resilient supply chain.
However, a sustainability strategy is not just a cherry on the cake anymore – it’s becoming something all companies will have to make the effort to adhere to, seeing as the world (government and political bodies, in particular) are growing more aware of the urgent movement to act against climate change.
👉 Think of a sustainability strategy a lot like someone with a lactose intolerance refusing to take a digestive enzyme supplement before eating ice cream. Sure, they can go ahead and have dairy without taking a digestive enzyme first – but it’s pointless to not when the person can. The same goes for a sustainability strategy – even though it isn’t compulsory on paper, it is becoming an implied requirement.
“ Other reasons why a sustainability strategy is important is because it helps companies to take accountability for their environmental impact, manage stakeholder expectations, reduce business costs and implement energy saving tactics and technologies wherever possible, improve the chances of gaining a competitive advantage and capitalize customer’s interest in sustainable products and services, and supports long-term business growth and success. ”
👉 One of the main reasons why a sustainability strategy is no longer an option for companies is because governments and implementing stricter climate legislation and regulations that companies are being required to comply with – and developing a sustainability strategy can help to ensure that companies are ready to adhere at any given moment. This is extremely important given that new environmental legislation is being drawn up, and prevents companies from running around trying to move around business operations for the sake of adhering to these new rules.
A sustainability strategy can help companies to be proactive rather than reactive – as addressing sustainability issues ahead of time and stay ahead of future environmental and social regulations.
In short, a sustainability strategy is important as it helps companies proceed with their main mission without ignoring environmental and social responsibility. Businesses should care about a sustainability strategy as it can help them to manage risks, improve relationships with their stakeholders, comply with environmental regulations, reduce business costs, and create a successful and sustainable business.
What are the pros and cons of developing a sustainability strategy?
As explained, developing a sustainability strategy can help businesses in a multitude of ways: such as by engaging their stakeholders and promoting sustainability across the company and supply chain as a whole. In the long run, seeking to create a viable sustainability strategy is the better choice in the long run over choosing to not.
Some companies may find bypassing the benefits of a sustainability strategy easy, or may not view developing a sustainability strategy worth their time or financial resources – but overlooking the consequences could prove more challenging.
Consequences of not developing a sustainability strategy include bad business reputation, supply chain that lacks resilience, poor mamanget of finite resources, less engagement on behalf of stakeholders, and decreased customer and investor satisfaction or interest in financially supporting the business. In addition to this, many governments around the world are making sustainability reporting more compulsory – such as with the SEC disclosure rule and the CSRD. Failure to comply could give companies a bad name and cost them financially with hefty fines.
👉 In the end, companies who seek to implement a sustainability strategy will help their companies from lagging behind from complying with environmental regulations and standards in the future.
The choice is clear: governments, customers, and investors are all in favor of companies who value developing a sustainability strategy over those that don’t.
How can your business develop a sustainability strategy?
If businesses want to stay ahead of the curve, they’ll take the plunge and start to develop a sustainability strategy – if they don’t already have one. Often, developing the perfect sustainability strategy is best when done with expertise from carbon accounting companies like Greenly. However, it’s not impossible for companies to set out and develop a sustainable strategy on their own.
That being said, it’s important to keep in mind that curating a sustainability strategy is complex and is best done with third party assistance.
There are five key steps to building a sustainability strategy:
- Vision, Mission, Values: All sustainability strategies should start with companies seeking to identify their main missions, values, and the future for their company. This helps companies to shape the best sustainability strategy possible, so that their tactics can remain in line with the company’s original mission.
- Identify Key Issues: The crucial points for companies to focus on are going to differ depending on their set of values – to tackle world hunger or protect ocean life is likely to be contingent on what the company already focuses on. For example, a restaurant may be more likely to fight against food waste and a surf-lesson company may be more inclined to contribute to a program to protect ocean life. However, before this commitment can be made – companies have to rationalize their available materials and resources before moving forward with benefiting the environment or society whilst still conducting their business.
- Prioritize: It is crucial for companies to create a hierarchy of the social, environmental, and economic issues that matter the most to them. This helps to develop the framework for a sustainability strategy. Ultimately, a good prioritized list should demonstrate how the company plans to tackle each individual issue.
- Create Goals: Setting targets is essential for any successful sustainability strategy, as in today’s society – stakeholders nearly expect companies to be able to demonstrate their achievements in some sort of tangible manner. In addition to this, goals allow companies to continue working towards progress in their sustainability journeys.
- Implement: After all of the above has been completed, companies can then move forward with ways on how to achieve their goals whilst still remaining in line with their values This will include keeping the opinions of employees and other stakeholders in mind, being open to external feedback, and completing continuous reviews to adjust goals accordingly.
At the end of the day, a sustainability strategy is becoming a lot like proofreading a paper that’s already been checked by autocorrect – it may seem fine to turn it in as is, but going the extra mile can certainly prevent mindless errors in the long run. The same goes for a sustainability strategy, and if companies want to avoid scrambling to comply with the expectations of environmental regulations and stakeholders – they’d be wise to get started now.
What about Greenly?
If reading this article about why sustainability strategy is no longer optional for companies has made you interested in reducing your carbon emissions to further fight against climate change – Greenly can help you!
Developing a personalized sustainability strategy that’s just right for your company can be difficult on you own, but don’t worry – Greenly is here to help! Our climate experts will help you step by step to curate the perfect emissions reduction and sustainability strategy for your business. Book a demo with one of our specialists today to see how we can help you get started in your climate journey.
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.
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