Why sustainability is vital for businesses in every consumer industry
–Nine years. That's how long we have to change the world.
Year 2020 marked the start of the Decade of Action, a critical period during which we need to attain solutions to the most serious challenges of the world: poverty, hunger and climate change.
This a brief period of time to begin with, and then a curve ball called the coronavirus got thrown into the game. Now, when we can start imagining the post-pandemic world with the vaccines finally rolling in, how about making it a more sustainable one?
What that might look like in reality varies of course between different areas of business. However, at the foundation there are 3 pillars of sustainability: environmental, social, and economic. Or as these are called within corporate sustainability: planet, people, and profit.
Whichever word one prefers, these three areas provide a good starting point for anyone who wants to get the ideas flowing.
Let's take a closer look at each of them.
When hearing the word sustainability, it is the first pillar, environmental sustainability (or planet), that probably comes to mind at first. This makes sense, since environmental sustainability covers all the practices that usually are brought forth when discussing sustainability: recycling, waste disposal, plant-based diets, or using renewable materials and sources of energy – just to name a few.
Now, thinking about what a business should do in this area, it is good to start from those practices that are the most relevant to your business. A retail business should therefore focus on environmentally friendly materials and supply chain, whereas a restaurant might opt for more plant-based options in their menu. This way these actions are likely to come across sincere, and truly benefit the business.
Speaking of which, if a business markets their environmentally friendly practices in a larger volume than they are used in reality, we're talking about greenwashing, and it might actually steer away customers. Consumers are growing increasingly conscious, and more and more want to support brands whose values align with theirs. Value based shopping is especially noticeable when it comes to sustainability. Not moving towards reducing environmental impact will thus become expensive in the long run.
However, these customers aren't only focused on environment, but are expecting actions in other areas of sustainability as well. This brings us to the second pillar of sustainability.
At its core, social sustainability is about people: human rights and equality. The areas a business should focus on in order to be socially sustainable include paying a fair salary, saying no to child labour and ensuring safe working conditions, as well as taking care of employee wellbeing and supporting gender equality.
As said, many of these value-based shoppers aren't only looking for environmentally friendly products. Increasingly, they also demand above mentioned actions from the brands they choose to support.
When it comes to business practices, social sustainability connects strongly to responsibility and transparency. Is it easy for customers to find information about manufacturers and supply chains? Where are the raw materials coming from? Consumers are increasingly more aware of issues in these areas, and would like to see businesses be more explicit about their practices.
After all, it is the consumers with their wallets who hold the power – which brings us to the third and last pillar of sustainability: profit.
A sustainable business is a profitable business. It makes sense. However, an increase in economic capital should not happen at the expense of the other two pillars.
In other words, as defined by KTH Royal Institute of Technology, economic sustainability means "economic development that does not have a negative impact on ecological or social sustainability". Furthermore, economic sustainability can be viewed as a tool to promote sustainable development.
Some concrete examples of economic sustainability include for example smart growth and cost savings, as well as energy efficiency when connected to the pillar of environmental sustainability.
Many efforts in digitization have the added bonus of improving sustainability, and both are good for business. Not only can one save money and resources, but also signal consumers that they are taking sustainability seriously.
Make the choice before you are forced to.