3 Critical Considerations for Building a Sustainable Business
While the last two years have certainly been challenging, sometimes disruption presents an opportunity to make positive changes. Sweeping, institutional change can be slow and cautious, often for good reason. But for organisations ready to meet the moment, now’s the time to embrace big shifts like digital transformation, hybrid workforces and long-term sustainability for a better business and a healthier planet.
Building or adjusting your business model to be more sustainable accomplishes many objectives like reducing waste and wasteful processes, improving employee and customer experience and shrinking carbon footprint.
Tackling these types of challenges can seem overwhelming. But the key is to just get started—even small, incremental changes can lead to great outcomes.
Here are three things to consider to make your business more sustainable.
1. Know the trends
It shouldn’t shock anyone that companies prioritise profitability, sometimes to the detriment of people and the planet. But it’s clear now that flipping that equation can actually drive profitability and set your company up for long-term success.
People prefer and expect convenient, rewarding interactions with companies that care and are committed to sustainability goals.
- 53% of employees in the U.K. say sustainability is an important factor when choosing an employer
- Nearly 70% of consumers in the U.S. and Canada think it’s important that a brand is sustainable or eco-friendly.
- Almost 60% of businesses feel increased pressure from stakeholders to develop and disclose plans that address climate risk
The pressure is clearly on, even from investors and regulators. Many investors are getting savvier and raising their expectations around meaningful climate action and disclosure, allowing for a better understanding and mitigation of their investment risks.
Larry Fink, CEO of Black Rock, Inc., the world’s largest asset manager, recently said: “We focus on sustainability not because we’re environmentalists, but because we are capitalists and fiduciaries to our clients.”
The UK government announced its ambition to require mandatory climate disclosures for the largest companies at COP26 in 2021. The resulting Climate-related Financial Disclosure (CFD) regulations were enshrined in UK law on 17 January 2022.
Expectations are high, and inaction isn’t an option. 86% of employees now expect their CEO to publicly speak out on societal challenges—but far more important is that those words are backed up by actions.
2. Set achievable goals
It’s now clear that stakeholders, from customers to employees and beyond, prefer brands that align with their values and priorities. The health of our planet is a high priority, so businesses must do their part to reduce their impact on the environment.
There are many ways to make positive changes, and it’s key to start small, setting achievable targets that ladder up to long-term sustainability. Just like any good business plan, there has to be a clear vision and mission. Building a team dedicated to sustainability, with clearly defined responsibilities and goals, and ways to measure outcomes, will ensure accountability.
Many organisations start by focusing on reducing emissions, which are typically split into three categories:
- Emissions under their direct ownership or operational control (scope 1 emissions)
- Emissions from their purchase of electricity, heat and steam (scope 2 emissions)
- Indirect emissions made from up - and downstream supply chain partners (scope 3 emissions)
The first two are tied to in-house operations, and the third, while more challenging to control, often represents the majority of emissions for companies. Let’s look a little closer at examples of each.
Business travel and commuting are under direct control, so they’re a good place to make an immediate impact. The fastest way to reduce business travel-related emissions is to implement or continue with virtual, hybrid and remote operations. The past two years have proven that companies can be successful without requiring in-person experiences. Fewer commuters generally means less emissions, and organisations redesigning the way work gets done must consider the environmental impact of the various types of business travel.
For most companies, the electricity used in operations (such as offices and data centres) is a significant driver of overall emissions. Reducing electricity consumption, switching to renewable energy sources and including stricter environmental criteria in RFPs are great opportunities to reduce emissions.
Organisations committed to hitting science-based emissions reduction targets must address their supply chains. The most common method is to engage suppliers and set similar goals together. Companies should also consider including climate-related requirements in vendor contracts—mandating the disclosure of carbon emissions and levying financial penalties for noncompliance. These actions can also create new opportunities for collaboration with innovative partners and help respond to mounting pressure from investors, customers and regulators.
While these changes can represent massive shifts in operations, there’s another consideration that impacts the foundation of how business gets done.
3. Embrace digital transformation
Using virtual communication tools is certainly one way to reduce emissions, but there are many more facets to a holistic digital transformation that will fundamentally change how businesses operate, spurring productivity while cutting waste and wasteful processes.
A good starting point in any company’s digital transformation journey is evaluating how it creates, signs and manages all of its agreements. The agreement process is commonly overlooked, but it touches every aspect of business, including contracts, onboarding, procurement and acquisitions—and it’s commonly riddled with inefficiencies and waste.
Digitising and automating these functions reduces reliance on in-person interactions and error-prone, paper-based processes. In the UK, the average office worker uses 45 sheets of paper per day, while US offices use around 12 trillion sheets—at least 100 million trees’ worth—of paper every year.
There’s a ton of room for improvement there, and consequently, organisations are under intense pressure to establish modern, digital agreement workflows to help eliminate paper waste to shrink their carbon footprint.
The beauty of embracing digital transformation is that it brings so many other benefits. Streamlining agreement processes removes obstacles to innovation and frees up time to focus on strategic and revenue-generating activities.
Build sustainability into every part of the business
Organisations today have a unique opportunity to embrace environmental momentum and build sustainability into everything they do. It’s no longer an either-or proposition between profitable and sustainable.
The threat of climate change isn’t diminishing, and we’re at a crossroads. And now, doing the right things also means doing the best things for the business. Cutting emissions is a huge part of this, but it goes well beyond that. This is a chance for organisations and their leaders to pioneer and redesign how work gets done.
Embracing digital transformation and making workforce flexibility permanent will cement emissions gains into long-term, sustainable operations—and ultimately, success.