Remember in 2020, when Starbucks stopped offering plastic straws? Well, that was no isolated decision. It was part of a global trend among corporations to focus on sustainability efforts. As the values of companies’ employees and customers shift, so do corporate priorities. In this article, I’m exploring how sustainability became a popular focus for corporations and how it aligns with profitability.
Changing Context
According to the World Economic Forum and the World Wide Fund for Nature (WWF), the world is undergoing an eco-wakening. In short, people are becoming more aware of the impacts society has on the environment. As a result, interest in sustainable practices has skyrocketed. In the United States, this has been reflected in many efforts of the current administration. For instance, President Biden has formed the National Climate Task Force to implement a “whole-of-government approach.” Interestingly enough, this task force is not merely focused on reducing environmental harm. It simultaneously aims to boost the economy through sustainable practices. In the President’s own words, “dealing with this existential threat to the planet and increasing our economic growth and prosperity are one and the same.”
In fact, the economy is changing in response to the demand for sustainable practices. For instance, this Forbes article highlights some emerging trends in 2020 that represent a shift towards sustainability. These include the popularity of electric vehicles, increased reliance on clean energy, and a growing focus on plant-based diets. Have you seen more restaurants focus on vegetarian and vegan options in recent years? Well, that’s a perfect illustration of the changing times.
By the way, the government’s efforts to make business practices sustainable are just part of the conversation. Over 1,000 companies have signed on to this call to action for governments worldwide to demand policy changes that support the environment. These include many companies with a revenue of over 1 billion dollars: think Google, Walmart, and the Coca Cola Company. Advocating for sustainability is becoming mainstream.
Consumer Values Around Sustainability
In last week’s blog, I described the importance of knowing and listening to your stakeholders. As I mentioned, this includes a wide variety of people. That includes government agencies, customers, employees, and shareholders. I’ve already outlined an instance of the government pushing for sustainable change. How about others?
This report, based on data collected by 2020, found that consumers are increasingly demonstrating interest in sustainable goods and services. For instance, between 2016 and 2020, Google searches for sustainable goods increased by 71% globally. And in the US? These kinds of searches saw a 450% increase in just the two years from 2016 to 2018. Additionally, a 2019 survey found that the majority of respondents would consider sustainability before making a purchase. And here’s the most interesting statistic to me. Nearly half of respondents to a 2019 survey reported that they had switched products or services because of their values.
So consumers care about sustainability. Moreover, they’re willing to put their money where their mouth is. This means that businesses need to pay attention to consumer values or risk harm to their bottom line. As this Forbes article notes, those values include prioritizing recycled materials in manufacturing and being conscious of waste treatment practices. Consumers will access resources like the B Lab’s certifications to find out what kind of environmental impacts a company is having. Companies have to start stepping up to the plate of sustainability.
Learn the Lingo
If you’re ready to lead change towards sustainability in your company, start by learning some key terms. For instance, have you heard of the triple bottom line? This term was coined in the 1940s and brings a sustainable focus to the notion of profitability. The theory asserts that companies should be measured by three things: people, planet, and profit. In other words, it doesn’t just matter how much money you make. The way you affect society and the environment is important too.
That feeds into the notion of Corporate Social Responsibility. This is a business model that encourages companies to be accountable for its social and environmental impacts. This model posits that a company should be able to report these impacts to its stakeholders and the public. That can really affect the brand image of a company.
Finally, understand the concept of a circular economy, as described in this article. To visualize this, think of how materials usually move through the economy. First, they’re mined, grown, harvested, or otherwise obtained from the earth. Then, they’re used to make products. Those products are sold, used, hopefully loved, and eventually discarded. That’s when tons and tons of waste heads to the landfill. That whole process creates a linear economy. By contrast, a circular economy would involve discarded products being reprocessed into raw materials that can be reused in manufacturing. This would decrease the burden on the earth and could potentially lower manufacturing costs for companies.
What Can Your Organization Do?
All right, you’ve learned about the importance of sustainability and can talk the talk. Now it’s time to walk the walk. This article provides some first steps to take towards sustainable practices. In the big picture, try to adopt a model of Corporate Social Responsibility. This will involve some introspection as an organization, as well as transparent reporting to the public. Additionally, try to partner with sustainable vendors. Businesses are customers too. To move towards a circular economy, find ways to repurpose waste in your company. Finally, make sure that your marketing reflects the work you’re doing. Update your brand marketing to reflect your new value of sustainability.
It might be helpful to learn from an example. This Investopedia article describes how Starbucks has taken steps to prioritize sustainability. As mentioned above, Starbucks has moved away from single use straws and invested in reusable and recyclable alternatives. They’ve also begun to incorporate green architecture in the design of new buildings. Every company will take the steps that make sense in its industry, so this is just one example of how a company can respond to the new focus on sustainability.
Lingering Challenges to Sustainability
As this article from Investopedia notes, it’s hard to measure a company’s progress towards a broad aspiration like sustainability. (By the way, I wrote about the importance of setting measurable goals in this earlier post.) This HBR article describes some of the obstacles in the way of real change emerging. For example, the graph shows that although companies have started documenting their efforts, the impact on the environment has yet to really improve. Further, it’s hard to understand what companies’ sustainability reports really mean. They’re rarely audited by third parties, they don’t measure progress towards science-based goals, and you can’t compare impact across different companies. At least, not yet.
Your company can be part of the trend to not just do good business, but also do good. Period. When you need to coordinate a big effort like focusing on sustainability, you’ll want tools to support communication and collaboration. That’s where Pyrus comes in. Our software can help you move your work forward, towards a more sustainable future and beyond.
