In the world of business, sustainability is the capacity of a business to partner economic profitability with social good. A sustainable business runs on the principles of social responsibility and respect for the environment. This is considered green virtue by many and not good for the businesses’ bottom line. In the past, most business owners did not want to threaten profitability in favor of social good but today, that attitude is changing at a very fast rate. Sustainable development has become a core strategic competence for most modern day businesses.
There are a number of reasons for this “megatrend” ranging from pressure from well-informed customers to morality on the part of business owners. However, the biggest reason is that sustainable business is good business. That is, while still effecting positive change within the local community and on the environment, sustainable businesses have the capacity to grow and make profit.
Sustainability should be the top priority for all businesses for a number of reasons, the first and most obvious one being because the world needs it. Since sustainability has a role in all sectors, private corporations are in a better position than the government and also have more resources to tackle the world’s biggest challenges such as poverty, hunger and pollution. For example, auto companies can reduce GHG emissions by building greener vehicles and food-processing companies can minimize food costs to alleviate world hunger. The wellbeing of the planet and the people living in it has a direct impact on the success of all businesses in the world.
Secondly, sustainability can have a direct impact on profits in a number of ways. One is cutting production costs by reducing waste production in manufacturing and processing firms and limiting the use of fossil fuels by investing in renewable energy. Another way is improving the brand value of the business, which in turn improves its relationship with the local communities and authorities hence expanding the number of loyal customers while avoiding crisis, inappropriate regulations and new taxes. A strong socially responsible management should also help a business attract highly productive new employees and win the loyalty of the existing ones. Happy and productive employees mean high profits for the business.
Lastly, sustainable business is good because it is what the people want. From employees to customers, people are demanding for sustainable businesses. With strengthened communication across the world, it would be unwise for businesses to alienate themselves from the concerns of the people. Working in partnership with the local communities leads not only to work that aligns with global sustainability goals but also to long-term profits for the business.
Sustainable businesses are more resilient to shock, more competitive, more adaptable in a fast-changing world, more at ease with regulators and more likely to attract and retain the best employees and loyal customers.