Sustainable Business in 2021: Table Stakes

2021: THE YEAR OF RECOVERY

Last year brought tremendous change in the business world with the acceleration of so many mega trends including remote work, video conferencing, eCommerce, and the digitization of almost everything. The business world will never be the same.

2021: ALSO THE YEAR OF SUSTAINABILITY

That’s right. Our team here at Green Busing Bureau strongly believes that this will be the year of mainstream sustainable business where every company, not just the purpose-driven ones, will be committed to being more eco-friendly and socially responsible. For large companies, the focus will shift from shareholders to stakeholders. This stakeholder capitalism is a more conscientious approach to business by balancing profit and purpose. It’s an approach to growing your business but where workers, customers and the planet are just as important as investors and shareholders.

BUSINESS AS A FORCE FOR GOOD

Just like many of our GBB business members, Green Business Bureau has a business to run. We ourselves remain committed to running our own operation in a sustainable way and are even more committed to being socially responsible. Our goal is to demonstrate how our platform and business can be a force for good and to be the beacon of balancing profit and purpose while growing.

A LOOK BACK AT THE HISTORY OF GREEN BUSINESS BUREAU

Green Business Bureau has been focused on creating a sustainable business world since its founding in 2009. Like any company, the business has evolved with the times from a focus on strictly green certification to a solution for managing green initiatives, facilitating a community of green businesses and providing a framework to engage employees. We’ve evolved as has the entire definition of sustainable business.

HOW COMPANIES USED TO THINK ABOUT SUSTAINABILITY, AND WHY

There’s no question that the perception of “sustainable business” has changed from being a business cost that had to be managed to now being both a business driver and a strategic imperative. The concept of sustainability has also changed from a focus on the planet to an expanded definition that includes not only saving the planet but taking care of workers, the local community and contributing to “good” causes around the world. In other words, a sustainable business today has to be both eco-friendly and socially responsible.

When GBB was founded, our primary value proposition was our green business certification and Green Business Bureau seal. In 2009, a very small percentage of companies were green businesses, mostly led by founders who were huge advocates of saving the planet from climate change. Back then the focus of sustainability was environmental. GBB’s online certification was a way for companies to demonstrate their commitment to being environmentally friendly.

HOW COMPANIES’ PERCEPTION OF SUSTAINABILITY HAS CHANGED

In the following 10 years, the business community experienced a phase where the proponents and ambassadors of sustainability touted the financial benefits of sustainability to build momentum, both internally and in the business community. Energy efficiency related to lighting, equipment, and infrastructure as well as recycling, reuse, and other green practices have been financially rewarding areas of focus.

Most recently, we see a movement towards green business driven by the demographics of a generation shaped by their predecessors’ activism, and the reality of the science they have been taught. They inherently believe that fundamental change in the areas of sustainability and social behavior must happen. As the new predominant block of consumers, Millennials and younger generations prefer purchasing from green and socially responsible businesses. They will, in effect, vote with their wallets. As a workforce, these employees prefer working for companies that care and give back. And they will vote with their career choices. If a business is looking to attract and retain top talent, it must be an active player in the Sustainability and Social Responsibility game. Truly, sustainable business has become table stakes.

STAKEHOLDER CAPITALISM

But it’s not just the market pressure and desire to win new customers that drives change. Many CEOs and executive leaders want to give back. The goal is to do good for the sake of doing good because it’s the right thing to do! Many believe that to be a truly GREAT company, you have to be a GOOD company. There’s a titanic shift from “shareholder focused capitalism” to “stakeholder capitalism” which expands the focus from value to shareholders to creating value for employees, customers, partners, society and the local community.

FOCUS ON PEOPLE AND EMPLOYEE ENGAGEMENT

One of the biggest changes we’ve seen in sustainable business is a shift in focus from operations and process to a focus on people. Company leaders and managers are engaging with employees at all levels on environmental and social causes. Social responsibility goals and initiatives have become a major component of the sustainability programs and missions we are seeing in our GBB community. Diversity, inclusion, local community involvement and charities, are all part of being a sustainable business and purpose-driven company.

EXAMPLES OF COMPANIES THAT ARE MANAGING TO PROTECT THE PLANET WHILE ALSO REMAINING PROFITABLE

This expanded vision of sustainable business is happening at all levels, from small business to major corporations. Fortune 500 leaders like Marc Benioff at Salesforce are touting a new more conscientious capitalism and stakeholder capitalism that balances profit and purpose. We are all very familiar with the early adopters of purpose-driven companies like Patagonia and Starbucks. They all strive to use “business as a platform for good” and they have succeeded without sacrificing business success and growth. In fact, these companies have had amazing sales growth which enabled them to hire more people and invest more in “save the planet”, “worker care”, “local community” and “social justice” causes. In 2013, only 15% of the S&P 500 companies reported ESG (Environment, Social. Governance) measurements. By 2020, over 95% did.

GREEN BUSINESS BUREAU MEMBERS LEAD THE WAY

GBB members are from every industry. We have high-tech software companies, large manufacturers, retailers and insurance companies as well as small businesses like restaurants, law firms, bed & breakfast inns, commercial cleaners, and dry cleaners. One thing they all have in common: their leaders are showing that profit and purpose go hand and hand, that committing to sustainability is not a major hit to profits, and, in fact, it’s often the key to creating a great company. Our members are creating socially responsible cultures and are hiring great people that care about the environment, society and the local community. They are engaging ALL employees and giving them a chance to give back to great causes including the local community. There are many excellent examples of purpose-drive corporations and famous brands, but one of the big changes is that this expanded definition of sustainability is working its way down to businesses of all sizes and budgets. GBB recently announced the GBB Best of 2020 winners – companies that led the way in sustainable business and demonstrated both innovation and results. Here are a few examples of our members taking their commitments to the next level:

CyberArk is a public security software company that has over 40 employees working on various green teams. They’ve attacked the initiatives in the GBB EcoPlanner and raised their ESG score for investors to a full letter grade. They’ve created an amazing caring culture and are known for being one of the best places to work in the Boston area.

Hit Promotional is a manufacturer and distributor of corporate branded marketing items including shirts, hats, pens and mugs. They have drastically reduced waste, added electric forklifts, and saved energy over the years. But they also give back to the local community and several charities. This commitment is not a huge financial burden to the company. By being one of the few sustainable vendors in their industry, they have elevated their brand and differentiated themselves from the competition resulting in winning valuable new contracts to fund their sustainability efforts.

School Specialty is a leading provider of comprehensive learning environments for the PreK-12 education marketplace and joined GBB to use our framework for managing their green team goals and program tracking. The company focused on educating their internal teams and took steps for driving sustainability both at home for employees working remote and in the workplace. They are committed to further educating and demonstrating their environmental leadership and stewardship to their local communities and the schools they serve.

Martinrea is an auto part manufacturer committed to ensuring the responsible use of natural resources and the prevention and reduction of negative environmental impacts. Their “zero waste” initiative is a prominent goal of theirs and employees are rallying behind it. But it doesn’t stop with environmentalism. The company’s mission is “Making People’s Lives Better” which includes providing meaningful employee growth opportunities, job satisfaction and job security for their people and being positive contributors to their local communities.

The Frugal Florist is a florist who is actively committed to sustainability but in a way that keeps their costs down. They were able to improve operational efficiency through sustainability and in fact completed several initiatives in their first year as a GBB member that resulted in $1,200 annual savings.

CHALLENGES STILL EXIST FOR COMPANIES THAT WANT TO INVEST IN SUSTAINABILITY

The biggest challenges in sustainable business are not with Fortune 500 companies who have resources to hire people, pay for consulting, and dedicate significant resources to their initiatives. The biggest sustainability challenges lie within small and medium-sized companies who don’t have the same budget and access to resources. We’ve noticed that most of the large corporations that now report ESG have hired a head of sustainability and have dedicated ESG resources. They can afford that level of investment. Small and medium-sized companies have to rely on the people they already have. Sustainability takes time, money, and expertise but they can’t afford expensive consultants and they can’t spend too much time trying to figure it out. For them, engaging with employees to let them lead the way is the best approach. Our focus at GBB is to provide these teams and employees with the knowledge, tools, advice and online apps to manage their sustainability programs at their own pace. We help them understand where to start and what’s practical, and help them create their own personal playbook for building a sustainable purpose-driven culture and company.

BEST PRACTICES

If you Google “sustainable business”, over 100 million articles will be returned. There is information overload. That’s where software can help. Online applications and knowledge bases can provide a framework and structure to organize people and projects. Our GBB EcoAssessment and EcoPlanner online tools were designed to engage employees, accelerate learning, automate processes and drive change. Our members get organized content and EcoPlans on over 400 green initiatives for learning and training employees. We also provide a scorecard for tracking performance and measuring results.

At GBB, we’re working hard to capture sustainable business “best practices” and document them in our EcoPlans and business guides. We lay out an approach that starts with a sustainability vision statement and mission statement. We define key first steps including creating a green team, setting quarterly goals, and prioritizing initiatives. Our goal is to help companies track their progress and measure results. Getting official GBB certified at the Platinum Level is the culmination of becoming a truly sustainable business.

THE STATE OF SUSTAINABLE BUSINESS IN 2021

Now more than ever, a commitment to sustainability is critically important for individual companies and especially for the state of society and the planet. Many of the themes of 2021 are simply the continuation of the past few years. In summary:

• Sustainable business has become table stakes.
• Many leaders want to use their business as a platform for good.
• Sustainability is becoming part of the business culture and companies must engage their employees to be successful.
• Profit and purpose can be balanced.
• To be a GREAT company today, you also have to be a SUSTAINABLE company.