Sustainability – people, profit, planet
The term “sustainable business practices” usually means giving consideration to the environment, economic and social impact of a company’s business practices – both internally and externally – when making business decisions. It differs from the term “sustainable workplace practices”, which means creating and maintaining a safe, healthy and functional workplace.
Sustainable companies think long-term. They forge strong relationships with employees and members of the community and find ways to reduce the amount of natural resources they consume and the amount of waste and pollution they produce. As a result, sustainable companies thrive, surviving shocks like global recessions, worker strikes, executive scandals and boycotts by environmental activists.
However, companies can only do so much without the support of their customers. If consumers are unwilling to buy or pay for environmentally responsible or fair-trade products, the sustainability movement will stagnate. As one business leader said, “Most people buy products based on price and features, not on whether the material were sourced sustainably or the product can be recycled after use”. Therefore, it is vital for companies to engage with consumers and try to promote cooperation in order for the initiative to become long-term and successful business practice.
A recent article in the Strategic Management Journal showed that companies that invest heavily in sustainability have a higher return on assets than firms that invest moderately. What’s more, companies that dabble in sustainability perform worse financially than companies which do nothing. A half-hearted approach is worse than no approach at all.
Are you investing in sustainability and engaging with your customers to promote this?
Sources: Ivey Business Journal, Society for Human Resource Management