What is sustainability, and why is it important in a business?

Sustainability is one of those concepts that, actually, has always been with us. As soon as humans started farming, they worked to maintain the quality of land and supply of livestock. And the first documented references to sustainability appear in 17th-century German manuals on forestry management.

The current concepts and practices, however, started in the 1980s at the UN. Although frequently assumed to be an environmental concept, policies usually consider three dimensions — environmental, social, and economic — which all must be balanced.

What this means for business

The UN considers a sustainable business one that is profitable but also contributes to present and future environmental and social wellbeing. In other words, it makes money and makes the world a better place. How this might look for a business will depend on their trade.

A manufacturer, for example, might look at how it can minimise the environmental impact of its processes, perhaps setting goals on carbon emissions. A retailer, however, might instead have to consider looking at its procurement policies and how it has an impact that way.

To meet social obligations, businesses might consider their employment policies, for example committing to paying living wages or offering family-friendly leave policies. Or they might extend such policies to contractors, making it a condition of the contract that similar policies are in place.

How does this benefit your businesses?

All businesses exist to make a profit, so the economic dimension of sustainability is something any business owner would expect. However, the other dimensions can seem like a cliché, after all, what difference can a small business make to a global problem?

But there is growing evidence that actively pursuing sustainability brings significant benefits for business.

Can it save your business money?

Practical steps towards sustainability can be money-saving. Perhaps the most obvious example is in reducing energy costs by avoiding unnecessary energy use. But there are plenty of other benefits. For example, reducing packaging can cut distribution costs, or increasing recycling might mean less waste and lower trade waste fees.

Attract more customers and investors

There is increasing evidence that customers are actively choosing to use businesses that share their ethical values, and that their preference will even outweigh higher prices. In other words, sustainability can increase your products and services’ perceived value.

Similarly, it also appears that sustainable businesses will tend to attract better staff, who have more commitment, as well as investors.

Green businesses are better businesses

Research at Harvard into businesses that had, and had not, adopted meaningful sustainability practices found they performed differently. Sustainable businesses showed better business practices and higher profitability than the businesses that were not deemed sustainable.

When sustainable businesses were fully committed to their goals, the result was an improvement in performance at each level of the business that far outweighed the costs of any sustainability measures. Sustainability is not just about being worthy and saving the planet: all the evidence suggests it’s good business sense.