The Importance of Corporate Sustainability
Sustainability is among the most demanding issues in the world at the moment. Since we are witnessing rapid climate change, many of us are seeking out ways we can reduce our impact on the environment. Over the last few years, there has been an upsurge in companies committing themselves to “sustainability.” There have been different ways of achieving “sustainability”. Some organizations have set net-zero carbon goals, some have tried to diversify their workforce, or move into new, cleaner lines of business. The interest in sustainability is likely to grow even more over the next decade, as businesses feel pressure from social movements and environmental challenges.
Corporate sustainability originates from the concept of “sustainable development.” The World Commission on Environment and Development under the aegis of United Nations initiative has defined that concept in 1987. Sustainable development means actions that “meet the needs of present generations without compromising the needs of future generations.” To contribute to sustainable development, businesses need to create wealth to reduce poverty, without harming the natural environment. In this way, businesses help the world today without compromising the prosperity of future generations.
Corporate sustainability vs Corporate social responsibility
Both these terms have been buzzwords with respect to business ethics. Though both these words seem similar, their meanings are very different. In fact, corporate sustainability falls under the term corporate social responsibility. While corporate sustainability is the strategy or plan carried out in order to achieve business objectives in an environmentally friendly way, corporate social responsibility is a broader term. Corporate sustainability is all about what can be done in the future.
There are broadly three primary pillars that are often associated with the topic of corporate sustainability: social, environmental, and economic (often known as people, planet, and profits). Together these core components help corporations embrace sustainability in a way that is beneficial to efficiency, sustainable growth, and shareholder value.
The economic pillar is not about profit at any cost for the corporation – it is about corporate risk management. The importance lies in the balance between profit and ethics. The social pillar is all about having the support of employees, stakeholders, and the community. Overall, practising sustainable social strategies in the long run results in a workforce with greater skills and more motivation. The environmental pillar is arguably the most crucial out of all three. Sustainable corporations are often the most innovative because they are constantly reviewing existing processes to find better, greener alternatives. By reducing their carbon footprint and packaging waste, corporations are also able to see a positive impact on their public reputation and financial returns.
These three pillars of corporate sustainability – economic, social, and environmental – work together and help organizations endeavour for more sustainable practices. Businesses need to move from an outdated sense of fast profits at the expense of the environment to more mutual interdependence and eco-innovation. Adopting sustainable practices not only helps the environment but also leads to an improved brand image, reduced costs, happier shareholders, increased productivity, and countless more benefits. Sustainability is here to stay.