Sustainability in business: How to get there and why
Sustainability in business is not just about encouraging companies to do the right thing by our planet - sustainability in business is good for business. Why? It makes a business more attractive to sustainability-minded consumers and investors, as well as other businesses who are reviewing their value chains to meet their own sustainability targets. How? Read on for the three key steps to consider.
Sustainability involves integrating environmental, economic and social factors to create healthy, prosperous and diverse communities now and in the future. It acknowledges that natural resources are finite and should be used in a smart way so that we leave a healthier planet to future generations.
We are currently using these resources at unsustainable levels, and emitting greenhouse gasses and other pollutants that are set to raise global temperatures by more than the 1.5°C target as outlined at the?Paris Agreement?in 2015. Taking action now to mitigate and indeed overturn the negative effects on everything from nature loss to inequality, and from supply chains to human rights, is imperative.
Businesses are beginning to take this message on board and to shoulder their share of the responsibility with ambitious sustainability goals increasingly part of strategic plans, and with Environmental, Social and Governance (ESG) matters integrated into operations. But for a real sea change, this needs to scale up further to permeate through all businesses from small enterprises to large corporations – and translate beyond goal setting to concrete action.
And a big incentive to do so is the competitive edge that sustainability-minded businesses are gaining in the marketplace.
Here are three key steps to accelerate sustainability in business:
1. Do the groundwork and set goals thoughtfully
Once sustainability is worked into a company’s strategic priorities, the next step is to clarify stakeholder expectations to help identify the areas to focus on when it comes to setting and achieving sustainable development goals. Next, by establishing relevant Key Performance Indicators (KPIs) and ensuring there is an evaluation system in place, progress can be monitored, and any necessary adjustments made to make sure targets are met.
Sustainability Manager for Sustainability Reporting & Engagement at?Neste?Anna Aulakoski?explains how annual monitoring and bi-annual reviews help ensure that the relevant sustainability topics are being focused on at Neste, and success is being measured: “To achieve long-term sustainability goals, we must also focus on setting short-term targets that can be monitored using real data because you can’t manage what you don’t measure.”
Having driven sustainability in business for decades, Neste -?the leading producer of?renewable diesel?and?sustainable aviation fuel- has the experience and knowledge to help other businesses start their journey.?
“It’s extremely rewarding to be at the forefront of a global movement,” Aulakoski says, “When we design sustainability goals, we set a positive example to other businesses and we are happy to collate and share our data.”
2. Embrace the circular economy through collaboration and innovation
To meet ambitious carbon-emission targets?and tackle related issues such as social inequality, poverty, and access to healthcare, forward-thinking collaboration across and within sectors and industries is key. Embracing a circular economy means sharing resources, changing attitudes towards waste and designing new business models to maximize long-term sustainability in ways that can’t be achieved by working in silos.
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“A circular economy is built on foundations whereby products are designed and built to be re-used, repaired and possibly upgraded, and then recycled at the end of their life,” says?Perttu Koskinen, VP of Innovation, Discovery and External Collaboration at Neste.
“However, this requires a change in mindset where businesses and sectors collaborate to close the loop and benefit everyone in the value chain. If waste from one sector can be re-used as a raw material in another, then fewer virgin resources are needed.”
There are some great examples of this already happening to draw inspiration from: from major initiatives such as??McDonald’s fuelling its trucks and making sustainable aviation fuel with used frying oil from its restaurants, to exciting innovations such as?converting municipal solid waste into fuels, via the proliferation of smaller scale projects such??Ananas Anam?making artificial leather Pi?atex from vast quantities of waste pineapple leaves, providing a new income stream to the farmers.
3. Focus on Environmental, Social and Governance performance
A recent survey by European asset managers?Amundi?found that investors were increasingly concerned about climate change, and were gravitating towards companies that managed natural resources more efficiently, tackled social inequality, and were honest and accountable over their governance.
To become such a company it is essential to put in the time to establish what this means for your business in particular; what levers make the most sense for you to pull within your organization and along your value chain - and from that what data you need to be gathering and monitoring.
Collating such ESG performance data for example around carbon emissions and waste management is a double-win. Businesses can use it to keep track of key sustainability metrics such as energy usage and water consumption, helping them improve efficiency and reduce costs. But this kind of data is also increasingly used by investors and lenders as a screening tool to help gauge which companies are worth capital investment – so that is a strong additional incentive for having those figures to hand and in good shape.
Moreover, supply-chain partners, as well as end-users, are also demanding to see sustainability prioritized in business practices and in products. Good ESG performance may be a precondition for a retail store to stock a product, for example.
With all this in mind it is clear that sustainability in business is far more than just a nice to have – it is now a must have, not just ethically, but to future-proof your business. And the good news is, that as this global movement gathers pace, it is also becoming more and more achievable.
Author: Liam McCann
Originally published on?Journey to Zero Stories