Sustainability

Reducing the challenges faced globally and building a successful business are the main goals of business sustainability. Sustainable business practices deal with the effect of business activities on the environment and on society. So, let's take a closer look at what sustainability is in business terms.

Sustainability meaning and examples

Due to the constant evolution of the business world, corporations now have a huge impact on the environment and society in general. This impact underlines the importance of studying sustainability in business.

Business sustainability aims to make a positive impact on the environment and society through sustainable development goals and to make businesses conscious of the environmental, economic, and social factors of their operations. Some examples of sustainable business activities are:

1. Reduction of greenhouse gas emissions

2. Reduction of land and water pollution

3. Use of sustainable materials

4. Renewable energy usage

5. Constant revision of sustainable behaviours with an aim to improve

6. Use of green-certified products.

Business sustainability practices often include the following:

• Using sustainable materials during manufacturing or business processes

• Optimising manufacturing processes and supply chains to reduce emissions of greenhouse gases to the minimum

• Employing renewable energy sources like solar power and wind power to run business operations

• Empowering local communities through development plans or education funds

• Reducing pollution of natural bodies.

Importance of sustainability in business

Sustainability is important for all businesses, as:

• Apart from the social responsibility that comes with sustainability, it also helps a business succeed by attracting new customers and talents and building up more support from the public.

• Sustainability may help attract new talent as people are more willing to work for companies that are known for treating their employees, the environment, and society well.

• Sustainability may also motivate employees to work hard, which can improve the business's reputation and attract new customers.

• Sustainable technology uses less energy, thus saving businesses money spent on energy costs.

• Investors are more willing to invest in businesses with an eco-friendly business process, as they know their funds are being used for good purposes.

• It promotes the reduction of greenhouse gas emissions and efficient use of scarce resources.

Industrial activities, as previously mentioned, are major emitters of greenhouse gases during their processes. Business sustainability looks to reduce the level of greenhouse gases emitted during these business processes.

Business sustainability principles and development goals

The principles of business sustainability are the foundation upon which business sustainability is built. Business sustainability principles are divided into three categories:

• Economy sustainability

• Social sustainability

• Environment sustainability

Figure 1. Business Sustainability Principles, StudySmarter

The principle of sustainability says that for complete sustainability to be reached, the foundation of sustainability is to be maintained.

The three sustainability principles aim to work and promote the seventeen UN sustainable development goals, which are:

• Zero poverty

• Zero hunger

• Good health and well-being

• Quality education

• Gender equality

• Clean water and sanitation

• Affordable and clean energy

• Decent work and economic growth

• Industry and innovation

• Reduced inequality

• Sustainable cities and communities

• Responsible consumption and production

• Climate action

• Life below water

• Life on land

• Peace justice and strong institutions

• Partnership for the goals.

The three sustainability principles are also informally referred to as profit, people, and the planet, respectively.

1. Economic sustainability

Economic sustainability aims to maximise the resources available to a business in order to maintain profit generation. It has the capitalistic aim of profit generation while improving the standard of living at the same time.

Sustainability also protects businesses from extreme measures, such as large fines and business closure, which can sometimes be imposed on businesses by the government or market regulators. Economically sustainable activities include compliance with the rule of law, risk management, and good governance.

2. Environmental sustainability

Environmental sustainability looks to improve human and natural welfare by looking to protect natural resources from pollution and exploitation. It ensures that in reaching the needs of consumers, future generations are not adversely affected in any way, emphasising maximum business productivity with low or no negative impact on the environment. Examples of environmental sustainability activities include carbon footprint reduction, management and reduction of packaging waste, water bodies management, and protection from pollution.

3. Social sustainability

This involves a business having the support and backing of its employees, investors, and from the people in the community where its operations are sited. This support is achieved through human resources investment and improvement of social quality through support for equality and diversity campaigns. Social sustainability also promotes the ideas shared in the sustainable development goals, which aim to improve and protect the environment and society from further harm.

Trade-offs between sustainability and profits

The main focus of many businesses in the long term is profitability, which begs the question: does sustainability produce enough profits?

Many businesses often struggle to answer this question, meaning they sometimes have to make a choice between sustainability and profit generation. This is known as a trade-off. For example, implementing ethical and environmentally friendly practices, such as using eco-friendly materials, can often increase business costs. As a result, the business might generate less profit than if it were using cheaper, unsustainable materials. This is the trade-off between sustainability and profit generation.

Sustainable profitability might pose a solution to the problem of trade-off, allowing companies to produce products or services that are both profitable and sustainable. This not only provides businesses with profits in the short term but secures business activities in the long term, especially as resources needed for business activities are often scarce.

Sustainable profitability aims to help businesses maximise available resources without causing damage to the environment. This solves the problem of making a choice between profit generation and sustainability, as it provides businesses with the best practices and platform to carry out sustainable practices without having to sacrifice profitability and vice-versa.

Factors of sustainability

The factors of sustainability are divided into four pillars:

• The Social Pillar

• The Human Pillar

• The Economic Pillar

• The Environmental Pillar

1. The Social Pillar

This looks to preserve communities and their culture by investing in social services that promote community culture. The social pillar stresses the importance of quality relationships, togetherness, and honesty among people.

2. The Human Pillar

This pillar looks to maintain and improve human capital in society through investment in empowerment, education, and good, reliable services. Here, the well-being and growth of everyone in society is the goal.

3. The Economic Pillar

This looks to improve the standard of living, and also maintain economic capital. The economic pillar looks toward maintaining quality economic growth through various investments in ecological systems and people.

4. The Environment Pillar

The environmental pillar looks to improve the standard of living through investments in the protection of natural resources and natural capital like water, land, and air. It aims to satisfy human needs without causing a negative impact on the environment and harming future generations.

In conclusion, business sustainability incorporates the four pillars of sustainability into their business activities. This benefits both society and the business.

Sustainability in business not only protects the environment, putting people and the ecosphere first, but also generates wealth for businesses and establishes trust between them and employees, investors, and the community.