Measuring Environmental Sustainability

Now more than ever, environmental sustainability matters in business. Not only are a company’s eco-friendly practices a positive influence on our dying planet, but conscious consumerism can have significant impacts on the success of an enterprise. A recent study by Nielsen found that 81% of global consumers say it’s extremely or very important to have a sustainability commitment from the companies they do business with. According to the Green Business Bureau, 89% of companies believe that demand for sustainable products and services will continue to grow for the foreseeable future. Appealing to these consumers and adapting to the changes in the world of business can have a positive impact on any enterprise.

So, how does one measure environmental sustainability?

Green certifications set straightforward standards regarding how to best measure a company’s sustainability efforts. By earning a green certification, businesses can win approval from consumers who are more likely to give their money to companies that have clear proof of their environmental achievements.

One such green certification can be earned from Greener Coral Way, a program that focuses on the removal and replacement of Styrofoam and plastic items from businesses. Different certifications can be received depending on the level of elimination a company has reached. For example, to achieve a “gold level” certification from Greener Coral Way, a company must be 100% plastic and Styrofoam free, having removed non-sustainable versions of items such as straws, bags, cups, lids, silverware, and to-go containers.

Fair Trade Certified is another program that offers guidelines and green certifications to help businesses measure the environmental and social sustainability of their agricultural production. Their environmental standards come down to three major tenets of agricultural sustainability: biodiversity, ecosystem function, and sustainable production. One of Fair Trade Certified’s standards asks farmers involved in production to comply with national legislation on agricultural land use, protect and enhance biodiversity and endangered species, and reduce their use of pesticides (using the least toxic pesticide alternatives when necessary).

Green certifications aren’t the only way to measure sustainability and tap into the conscious consumer market. Triple Bottom Line is an accounting framework that deals with the ever-strengthening relationship between profit, people, and the planet. While the profitability of a business is almost always measured in numbers, its social and environmental effects are not. However, the latter two aspects of a company will affect the profits that company makes.

So, what steps can be taken for people and the planet?

Tangibly measuring the social impact of a business is hard, but Triple Bottom Line helps by emphasizing the importance of assessing the following variables as measures of social impact: labor force participation rate, median household income, average commute time, and health-adjusted life expectancy.

Investment strategies are yet another way to identify and finance sustainable businesses. By choosing to fund sustainable businesses, investors can play an important role in expanding the sustainable market and encouraging the emergence of innovative and environmentally sustainable businesses.

Environmental, Social, and Governance Investing (ESG), a business term popularized in the 2000s, refers to an investor’s evaluation of a company’s sustainable practices before deciding whether or not to make an investment. While there are no universal specifications for what ESG investing has to look like, it can be broken down to selective investing, mission-related investing, and active ownership. This means that environmentally conscious investors are inclined to selectively fund businesses based on their level of sustainability.

Measuring environmental sustainability is a crucial step for businesses trying to make a positive impact. Sustainable practices are becoming more and more cost-efficient, and are not only useful when tapping into the conscious consumer market, saving money, and improving business image, but are critical in the fight to save our planet.