Incorporate sustainability in a Company
I have been contacted and asked to find out how a business can become sustainable. As a matter of fact, in order “to develop one, companies need leadership commitment, an ability to engage with multiple stakeholders along the value chain, widespread employee engagement and disciplined mechanisms for execution.” (Eccles, Perkins & Serafeim, 2012)(p.43). All these elements are essentials to create a successful sustainable business. However, everything cannot be implanted at once but step by step.
This report will look at:
• The ways of making a sustainable company
• The 4 major steps company have to follow by introducing it
• The examples of companies that have successfully integrated sustainability
• Recommendations for action
1. Making a sustainable business is not something that will be introduced overnight. Different stages are required to allow a good implementation in an efficient way. In addition, according to Ellis (2017) “Sustainability has a lot to do with transparency, not only in the public reporting of finances, but also in how the company manages environmental, social, and corporate governance (ESG) practices.” (p. 1).
2. The first step is to define the goals of the company by building itself a new identity through new perspectives and missions. For that purpose, it is essential to create a viable action plan by determining the required means, the principles to be followed and the values to be respected, the priority of the tasks, as well as a timetable to achieve these goals. The aims can be unalike depending on the company, but most of them have to include business model innovations in order to differentiate themselves.
3. The second step is to appoint a person in charge of sustainability, who can promote the goal of the company to the other staff members. The company will have to check if its company culture is well-integrated throughout the entire community.
4. The third step is to allocate resources as establishing new goals requires time, money, tools and work force. It is not possible to manage a sustainable business without these indispensable tools. In addition, it will be also necessary to make sure that the staffs have enough time, and the ability to conciliate their daily job with joining in the new involvement of the company in terms of sustainability.
5. The last step is about the ways a company can improve sustainable practices. According to Ellis (2017), once you have a good command of those sustainable practices on the inside of your working group in one sector, you can begin to implement sustainable opportunities in other areas. (P.3).
6. There are a lot of successful sustainable companies including:
• Novo Nordisk, a Danish healthcare company that is based on a mix of financial, social and environmental awareness since many years. They also bring to light their results in a matter of sustainability in a report to show their commitment.
• Toyota, by encouraging their employees to work and communicate with external colleagues. It is stated that to build a culture of innovation, it is essential to share ideas with members from other global companies in order to learn without interruption, and without being closed-minded. Thanks to that collaboration, they are closest to achieve their goals efficiently.
• Natura Cosméticos S.A, a Brazilian cosmetic company is a good model concerning its truthfulness by showing transparency. According to Eccles et al., 2012, transparency is a crucial advantage, and sustainable companies reach it by sharing their goals with the rest of the world, and by publishing genuinely their progress in order to achieve those objectives. (p. 46) To sum up, they are not hiding their failures through their engagements.
• PepsiCo invites its suppliers to “an annual gathering where they share best practices and discuss progress on sustainability.” (Eccles et al., 2012) It helps to reduce tensions with suppliers and maximize sustainability in the supply chain. (p.46)
Sustainability is important for every business but requires several steps and times. These steps include: establishing clear objectives according to the new identity the company will provide; assigning a person who will be advocating the sustainable business practices of the company to the entire community; allocating resources to allow a good implementation of all the necessary tools contributing to achieve its goals and improving sustainable practices from sector to sector.
• Some factors have to be taken into consideration through the sustainable implementation process.
• Leadership commitment is one of those factors. It proves its personal commitments to sustainability and, therefore can inspire others throughout the organization. Employees are more likely to be highly motivated because they know that their leaders feel concerned about what they are doing.
• There is also Employee engagement that enables even more external engagement because a wide range of employees will be able to effectively involve with outside stakeholders including environmental groups, competitors and suppliers.
• External engagement builds up the company’s mechanisms of execution, since stakeholder pressure challenges the company to continuously improve its quality.
• “Companies with an established organizational culture that includes strong capabilities for change, a commitment to innovation and high levels of trust have a significant advantage.” (Eccles et al., 2012, p.46)