The focus needs to switch from how to make the largest profit to how to make the greatest profit with the least amount of impact on the environment. The negative impacts that companies have on our planet are often underplayed and ignored, as the main priority is to make enough money to please shareholders. While a business will not remain a business for long without a profit, it important for businesses to find ways to be innovative and help to limit the impact of operations on the environment. There are many benefits, other than preserving our environment, to being a sustainable business including: marketing, innovation, and employee satisfaction.
Definition of a Sustainable Business
A sustainable business is any organization that participates in environmentally friendly or green activities to ensure that all processes, products, and manufacturing activities adequately address current environmental concerns while maintaining a profit. Sustainable, or green, businesses are concerned with adding value to stakeholders, the environment, and society collectively. In order to be considered a sustainable business, a business can be focusing on reducing harmful actions or actively supporting efforts to improve the environment.
The included video does a great job of introducing business sustainability and the different levels of sustainability that we most commonly observe within businesses.
Why Become a Sustainable Business?
There are many reasons to motivate a business to become more environmentally conscious. A business can decide to do this out of the ethical obligation to care about the world we live in and how we are impacting quality of life for future generations. Additionally, being a business with sustainable practices or policies can serve as a differentiator from competitors. Consumers are becoming increasingly concerned with how businesses they support are impacting the environment. Not only are consumers pleased to see a business working to be more green, but investors are also seeking out these sustainable businesses. Savvy investors are often looking to support not only a business that they believe will result in a high return, but additionally a cause that they believe in. It is becoming increasingly popular for investors to want their money to be going towards a company that is conscious of the environmental impacts.
Becoming a sustainable business can be tricky for a company as it requires finding a way to effectively meet customer needs, while not being destructive to the environment. When a business is striving to change approaches to become more sustainable it is imperative that the triple bottom line is understood first. The triple bottom line consists of environmental, economic, and social sustainability. It is imperative that a sustainable business finds a balance between these three concepts. Additionally, it is of utmost importance to set very clear goals and have measurable metrics defined when working to improve sustainability within a corporation.
Impact on Marketing
Sustainability can be used as a powerful marketing tool when a company is clearly working to become more sustainable and truly care about the environment of current and future customers.
There are conflicting views on whether or not a company should use the amount that the business focuses on being sustainable as a marketing tool or not. After exploring both sides, I think it is safe to say that it is an individualized decision to make based off of different aspects of the business. Some companies like to market it to increase their consumer base, while others believe it is simply more about their social responsibility and if a customer really cares about it they will look to see if the company is sustainable
For example, from guest lecturers I have heard that Nike does not advertise the ways in which they are benefiting the environment. The thought is that Nike does not need to use this as a marketing message, they feel that it is simply part of their corporate responsibility and a customer could find information about Nike’s efforts by doing a little research if they are concerned. Contrary, The Honest Company advertises their efforts to helping the environment and it seems to be a core belief, focus, and mission of the company.
Through my research on business sustainability, I found that marketing sustainability has become a hot topic in this field within the last decade. Marketing sustainability is closely related to the overall idea of sustainable business and can be defined as follows: The process of promoting, selling, and distributing a product or service in a sustainable market in such a way as to educate customers of the multiple benefits of valuing human, economic, and natural capital.
Impact on Business Practices
Many business practices and processes are influenced by efforts to develop or improve upon sustainable business practices. While changing an internal business process can be difficult, it can lead to a very positive outcome in the long run. One of the main benefits of being a green business is that when a business is focused on sustainability, they are often among the most innovative because they are always trying to research new processes to improve business and decrease impact on the environment.
I do need to acknowledge that being a sustainable business can have a meaning other than being environmentally conscious. The second meaning for sustainable business includes the business structure, employment, and management remaining consistent over a long period of time.
I was surprised to learn that often, green businesses generally have employees who are more invested in the business culture, which provides more fulfilling jobs. The focus on ensuring sustainability also builds a culture of accountability throughout the organization. When all members of an organization are on board with working to remain as sustainable as possible, they are bound to be more honest and committed to their efforts.
The Future of Sustainable Business
My prediction for the future of sustainability it that it will continue to be a topic of conversation and concern for the government, businesses, and consumers. Given our political state, I unfortunately do not predict that regulations regarding business sustainability, at the government level, will become stricter in the next five years. With that being said, I think that consumers are becoming more concerned with how the businesses they support impact our environment and are aware they have the option of which businesses to purchase from. Although regulation will not be forcing businesses to decrease impact on the environment, I think consumers will apply a greater amount of pressure within the next five years. Consumers have a great amount of control over this topic by making the choice to support businesses with sustainable practices. As previously discussed, consumers are not alone in having the choice of who to support. Investors are also becoming increasingly aware of sustainable practices and choosing where to invest their money wisely. In the next decade, I do believe that we will see an increase in regulations regarding the impact a corporation has on our environment and efforts to improve or decrease that impact.
Written by Anne Hagerty, a University of Montana student studying Business Analytics. Anne will graduate with her M.S. in Spring of 2016 and hopes to pursue a career in the realm of marketing analytics.
