In the world of small and medium sized businesses, sustainability can seem like a luxury few can afford when growing, or just trying to maintain sustained business, is the main priority. However, there are cost-effective ways that businesses of any size can work towards becoming more sustainable. With this in mind, Dojo looks at “what is sustainability in business” and how becoming more sustainable can positively impact your business.
In this guide we’ll cover the essentials you need to know, including:
- What is sustainability in business?
- Why is sustainability important in business?
- How to be sustainable in business
What is sustainability in business?
The definition of sustainability in business is to sell goods or services with a minimal negative impact on society, communities or the environment, both on a local and global scale. It also refers to businesses making a positive environmental impact. These businesses may be known as sustainable, green or have an accreditation like B-Corp attached to them.
This has become such a hot issue in the world of business that the acronym Environmental, Social, and Governance (ESG) was created as a framework to help give investors greater clarity around the impacts of their investment. Today it is used as a set of guidelines for businesses to keep track of their sustainability targets and achievements.
Why is sustainability important in business?
It can be easy to view being a green business or practicing sustainability as a nice-to-have, or even a luxury, especially in the midst of recovering from the longer term effects of the pandemic and the cost of living crisis. Many businesses have faced, and are still facing, operational hurdles and increased utility bills to name but a few challenges, so with little perceived incentive, going green may not be top priority.
Thankfully local, national and international organisations and authorities are slowly supplying more incentives for businesses to demonstrate ethical leadership and minimise the negative impact they have on our planet and society. These incentives can come in the form of grants, funding and accreditation.
The dangers of climate change are certainly one major reason why sustainability is important in business, but there’s more to it than that.
Here are four reasons why sustainability can be good for business:
Sustainability can drive business
ESG metrics aren’t just a nice-to-have way of demonstrating that you care about sustainability. They can also be important financially because they can be a factor used by investors to help them assess whether or not to invest in a business. Proving that you are an ethical, sustainable business can be key in improving your chances of attracting initial and long-term investment.
Sustainability could actually save you money
Although the upfront costs of becoming a sustainable, green business may require some investment, it could save your business money in the long term. This is because operating sustainability can often mean operating more efficiently. These efficiencies may be made through more efficient energy usage, water conservation and reduction in water use and waste. You may also choose to streamline your consumption through more effective supply chains and by practising sustainable procurement. All of which are not just better for the planet but better for your finances too.
Sustainability has reputational benefits
Sustainability is becoming more important to consumers so there are also reputational advantages to being known as a green business. Statista’s latest report on shopping behaviour even found that, overall, 83% of British consumers were willing to spend more on sustainable products. Millennials were most willing (87%) followed by Baby Boomers (85%) and Gen Z (83%)[1].
Being known as a company that cares about sustainability can also have a halo effect on your brand awareness and brand loyalty whilst also giving you new avenues for partnerships and collaboration; while working towards a unified cause like becoming green can also help stoke employee engagement.
Sustainability can drive innovation
Choosing to operate sustainably can often mean needing to work innovatively instead of taking the easy route. As we’ve said, the labours of your love can very well result in cost savings but it can also mean discovering better ways of doing things. Working towards sustainability often encourages your business and staff to think of out of the box ways to solve problems which can also set you up to be more adaptable and resilient when situations change.
How to be sustainable in business
We’ve run through just a few reasons why sustainability is important in business, but understanding sustainability and achieving it are two very different things. So how do you get there?
You won’t do it overnight and that’s ok. When working towards sustainability it’s best to start by:
Doing your research
First you need to get a good understanding of what the requirements are to be a sustainable business, so you have a ‘north star’ to work towards. It’s also worth looking at the incentives so you can decide how much investment you want to put into becoming more sustainable.
Working out where the problems are
Next, assess your current processes and procedures and monitor what the impact of them is on the environment and society. How much waste are you creating? Are you attracting diverse candidates for your roles? Are you working to benefit local communities? To get an estimate, you can use a carbon calculator like this one to help you figure out your current environmental footprint.
Setting yourself a mission and goals
Once you’ve established where you are currently and where improvements can be made, set a mission statement about your sustainability ambitions and some SMART (specific, measurable, achievable, relevant, time-bound) goals to help you get there. You could start with an overarching goal like ‘cutting carbon emissions by 15% by the end of Quarter 4’, or ‘increasing use of locally sourced or sustainable resources by 50% before the end of year’. Alternatively, you could set smaller goals like setting up recycling for paper cups if you’re a cafe. Remember, you need to make the goal realistic and achievable. You may have a bigger three or five year goal with lots of smaller milestones within that.
Keep monitoring your performance
It’s important to remember that the way to improve sustainability in business is to keep an eye on your progress towards these goals. Set up regular deadlines for check-ins and decide how you’re going to monitor progress. This could be with a spreadsheet or keeping a notebook. Either way, monitoring will keep the focus on how to increase sustainability in business terms and help you address any issues that are creating barriers to your goals.
After all, if you can successfully achieve them, that’s great news for your business to share with customers, employees and potential investors alike.
Wherever you are on your journey to becoming a sustainable business, Dojo is on hand to help you take payments so you can focus on greener things.
For more business guides, see our blog.
Sources
- [1] https://www.statista.com/statistics/1318317/willingness-to-spend-more-on-sustainability-by-generation/
- https://www.nasdaq.com/articles/how-millennials-and-gen-z-are-driving-growth-behind-esg
- https://www.fenews.co.uk/employability/generation-sustainability-how-gen-z-is-influencing-green-business-operations/
- https://www.renewableenergyhub.co.uk/blog/why-uk-businesses-should-go-green-in-2020
