Traditionally, Organizational success was termed as the ability of an organization to attain its set goals. Today, companies are broadening the definition of success. Instead of just results, they’re factoring in sustainability and to make their efforts sustainable, they need to integrate a sustainability strategy into their business.
Sustainability in business addresses the effect of business on the environment and society. The goal of a sustainable business strategy is to make a positive impact in these areas. When a company fails to assume responsibility, the opposite can happen, leading to issues such as environmental degradation, social injustice and inequality. Eventually, these issues create negative publicity and losses for the company.
Businesses looking into sustainability consider a wide array of environmental, social and economic factors when making business decisions. This is why sustainable business strategies are unique to each organization as they tie into the company’s business goals. For instance, sustainability for the Fashion industry can mean using fabric from recycled plastic bottles. By recycling bottles, not only are they finding purpose for all this post-consumer single waste but also reducing the dependence on oil within the fashion industry which is very costly and far from sustainable. For other businesses, it’s optimizing supply chains to reduce their carbon footprint. Supply chain inefficiency affects more than the planet, emissions and environmental impacts. Companies are also seeing the effects of climate change on bottom lines and revenues. McKinsey reports that Unilever estimates that it loses some €300 million per year as worsening water scarcity and declining agricultural productivity lead to higher food costs. For others, it means funding organizations to implement their sustainability strategy or sponsoring education funds for youth in the local community. Whereas for others, it’s putting in place strong corporate governance structures. Governance establishes the rules and regulations that guide behaviour and shape outcomes. It also establishes regulations that limit pollution and promote sustainable practices. An effective governance structure supports innovation and sustainability by focusing on research and development, knowledge sharing and providing incentives. Overtime, Investors are becoming keen on working with businesses that adhere to sustainability – as customers are also likely to purchase products from a company that is environmentally conscious. Corporate governance will help investors and stakeholders determine if it is the right investment for them as corporate governance encourages transparency and therefore accountability as to what the organization has accomplished in their sustainability journey.
To reap from the benefits of incorporating sustainability in business, organizations need to formulate an integrated sustainability strategy. An integrated sustainability strategy combines both business and environmental and social goals in a cohesive framework which creates value for suppliers, staff, clients and the business itself. With support from consultants, SMEs in Africa can achieve this. The first step is to conduct a materiality assessment to identify the relevant issues and decide the extent to which they matter to an organization. At this stage companies could review the sustainability initiatives in place and retain what is relevant. With the materiality matrix, the focus changes to defining relevant objectives as well as concrete actions to be taken.
Next is to develop a sustainable strategy map of objectives which brings together different sources of capital that could lead to value creation such as Human Capital where the organization celebrates diversity and inclusion or Financial Capital which ensures they maintain access to green financing. The strategy map acts as a framework for setting out individual objectives, defining the necessary performance indicators, the target values and actions required to achieve this targets. To track progress towards an organization’s sustainability goals, duties and projects need to be clearly defined for efficient collection of data and reporting.
Lastly, develop a communication and implementation roadmap. Teamwork makes the dream work, thus its key to communicate internally and externally to the team on the sustainability strategy as you roll it out. Train the team on theustainability objectives to bring everyone on board. It could start with basic things such as categorising waste from the plant as re-usable and non-biodegradable. Encourage the team to be transparent in their compliance and reporting and raise issues as they arise. Bring the company’s partners on board to ensure you share the same mind-set. Innovate in design and delivery by investing in research and development activities focused on low-carbon solutions.
In conclusion, when a business incorporates sustainability, it becomes easy to meet the legal requirements for the industry and they also attract investors and green financing. Following these steps will help businesses embark on their sustainability journey.
