If you’ve heard about corporate sustainability in your industry circles but aren’t quite sure what it means for you and your business, keep reading. This article will help you understand what it is and what role it plays in your business.
What is corporate sustainability?
You may have heard the term “corporate responsibility” thrown around. This term represents the social aspect of responsibility that has been rolled into corporate sustainability.
In short, corporate sustainability is a broad term that covers the environmental, social, and governmental aspects of running a business while monitoring and managing environmental and social impact that extends beyond the business and into communities. This is the expertise of sustainability consultants in Brisbane, they provide the guidance needed in order to understand how to implement sustainable practices effectively.
However, corporate sustainability doesn’t exist on its own. Workiva explains that corporate sustainability needs to be paired with intentional environmental, social, and governmental (ESG) efforts to maximize effectiveness.
For example, your business might be operating sustainably in a silo, but what are your third-party vendors doing? And how do your company’s activities impact the local community? A factory that produces emissions that harm the surrounding community can’t be considered sustainable. You might not own this factory, but if they’re part of your supply chain, it will reflect on you poorly.
Corporate sustainability is a critical component of ESG, and it’s vital for all businesses to consider cultivating it from the inside out – even when it’s not legally required.
The benefits of implementing corporate sustainability
There are a few major benefits that come with adopting a forward-thinking approach to corporate sustainability in your business. For example:
• If required by law, you won’t face fines. You don’t want to be on the receiving end of a massive regulatory fine for not following legal ESG requirements. Unfortunately, many businesses are still ignoring the requirements and are risking everything, hoping they won’t get caught. Lesser-known businesses might be able to get away with this for a short period of time, but the more you get into the public spotlight, the harder it is to skirt the law.
When you start hiring outside companies to perform your required audits, they will advise you on where you need to get into compliance, and if this happens later down the line, it will be a lot harder. Getting compliant now will save you time, money, energy, and stress.
• You can attract more investors. Today’s investors are making decisions based on how companies approach sustainability. If you can’t show them proof of how your business activities impact the environment and local communities, they might not invest in your company.
• You can grow your business more easily. When you’re following the ESG guidelines for your location and industry, you won’t have to overhaul your entire business model just to get compliant when your business eventually must comply by law. This makes it easier to grow your business because you won’t experience a major setback that can force you to redesign your business model from scratch.
The challenges to running a sustainable business
Even if you are fully on board with corporate sustainability and ready to put your all into getting compliant, you will face challenges. The first challenge is going to be the cost of making changes. Any change you have to make will require a financial investment, and it could be big.
The other, more pressing challenge is that “sustainability” has varying definitions. According to data sourced by TravelPerk, 60% of businesses say they have a sustainability strategy, but that doesn’t mean their strategies are effective or meet legal requirements.
ESG laws have specific requirements, but just meeting these regulations isn’t all you need to be concerned about. Your market will also be looking at your business practices to see if you meet their definition of sustainable. And unfortunately, some of the things we take for granted aren’t all that sustainable.
For example, it’s said that getting electricity from renewable energy sources, like solar power, is ideal. However, solar panels are made from rare materials that are not mined sustainably, the panels can’t be recycled, and solar energy companies aren’t tracking their carbon emissions. It’s kind of like trading one problem for another, and savvy consumers will spot these issues even if you aren’t aware of them.
Embracing corporate sustainability is worth it
Although there are challenges to embracing corporate sustainability, it’s worth the effort to avoid compliance issues in the future. Currently, only large corporations are regulated, but since concerned citizens are pressing hard for major change, it won’t be long before sustainability requirements are applied to everyone, including small businesses.
