Communities and key stakeholders are becoming more aware of the environmental effects of production processes and can legally challenge the behaviour of firms through well-organised class actions.
Global concern on environmental challenges has been on the increase especially in the last three decades. Companies cannot remain inactive given that the burgeoning challenges affecting the world can also in some way have an impact on their productivity and business continuity. Sustainable development is the development that meets the needs of the present without compromising the needs of future generation to meet their needs.
Green business relates to how processes, products and services are delivered in a manner that has minimal impact to the environment and society whilst at the same time helping companies to generate profits. It is well known that businesses use natural resources such as water, energy, minerals and chemicals for their production processes. Furthermore, waste and residuals are generated from The production processes.
Environment and industrial development are interdependent of each other such that the dwindling environmental resource base may have an effect on the ability of some companies to access raw materials and process inputs. Companies which require water as a process input may find it difficult to access it in the next decade due to climate change induced water scarcity. This unfolding reality means that green growth and green industry are everyone’s responsibility. The private sector should take a lead in championing green industry.
The world is currently faced with a raft of sustainability challenges such as climate change, energy crises, waste generation, hazardous chemicals as well as the generation of electronic waste. Some of the challenges have been as a result of the growth and development of industrialisation in many parts of the world since the Industrial Revolution. Climate change is amongst some of the greatest challenges facing humankind today.
In order to solve these challenges, business should adopt sustainable business models. Communities and key stakeholders are becoming more aware of the environmental effects of production processes and hence can legally challenge the behaviour of companies through well-organised class action.
Adopting sustainability at company level has become an imperative. The leading brands in the world have started implementing sustainability initiatives such as ISO 14001:2015 Environmental Management Systems, ISO 9001:2015 Quality Management Systems, ISO 45001:2018 Occupational Safety and Health Management Systems, sustainability reporting, energy efficiency, renewable energy technologies, waste recycling amongst other globally acceptable activities. An organisation that only focuses on profit generation without considering the stakeholder needs is bound to fail and its future is capricious and uncertain. Implementing sustainability is a license to operate that is informally given by stakeholders such as customers, shareholders, regulators and investors
Any organisation which aspires to conquer international markets should be reminded that the adoption of sustainability within its corporate strategy is a pre-requisite to facilitate global dominance and increased export capabilities. There is an increased demand for products that have a less ecological footprint and that release less carbon emissions. The emergence of conscious consumers who demand certification of companies and products makes it increasingly difficult for companies who are not sustainable to do business. Ignoring sustainability may result in companies losing access to international markets. As greening the supply chain gains momentum, where does your organisation stand as procurement becomes increasingly based on sustainability?
Boards of Directors, Executives and Corporate Leaders should take the lead in promoting sustainability within their organisations due to reputational risks that may arise to their companies if environmental, quality and safety incidents arise within their organisations. The media is awash with organisations that were caught on the wrong side when trying to dispose untreated effluents and those disposing toxic chemicals into the environment.
Many lessons have been learnt when a company has received bad publicity or share prices have fallen due to reduced confidence. In extreme cases products have been boycotted by customers due to actual or perceived sustainability issues. Investors do not want to be associated with organisations with a bad reputation including poor sustainability practices. Companies which ignore sustainability may end up suffering dents on their popularity and market positioning.
Environmental laws have been on the increase in many parts of the world and companies are required to adhere to the requirements or risk being fined or given compliance orders. Paying fines unnecessarily due to failure to adhere to sustainability requirements leads to a company lowering its profitability. Competitiveness of businesses is hinged upon the ability of a company to produce goods at minimal costs. Reducing compliance costs can play a part in increasing the profitability of companies through cutting unnecessary costs.
With respect to the social dimension of sustainability, companies should uphold rights of workers and at the same time promote gender mainstreaming and equal opportunity for women. The world needs more companies which prioritise socially sustainable enterprise. In order to operate a business without conflicts with the community it is necessary to understand their needs, prevent pollution of water bodies that they depend on, facilitate their inclusion through providing employment opportunities and inclusive business in the supply chain. Operating without a strategy of building relationships with the communities can brew unnecessary conflict.
Companies which instil a sense of ownership in the community through genuine Corporate Social Responsibility (CSR) activities stand to be far more productive and get the much needed support from their stakeholders. The community has the ability to promote or derail a company’s operations. In the 21st century there is increased realisation of the stakeholder needs. Companies are strengthening their social activities at the same time increasing revenue. Workers are also a key stakeholder of an organisation’s social sustainability. Their occupational safety and health has to be maintained. This entails companies to provide them with the personal protective equipment (PPE), creating safe working conditions and upholding labour rights.
It is then necessary to assess how a company that is currently not implementing sustainability can develop a sustainability plan or strategy and identify sustainable development programmes at company level. One of the most common approaches is to mainstream sustainability within the corporate strategy through implementing standards that address the multi-pronged aims of sustainability
- Step 1: Identify the needs of your stakeholders with respect to sustainability (e.g. regulators, customers, investors).
- Step 2: Select specific sustainable development tools that your organisation can implement.
- Step 3: Appoint specific individuals or departments with your organisation to drive your sustainability strategy.
- Step 4: Measure the impact of your sustainable development initiatives (e.g. ISO 14001:2015, ISO 45001:2018; ISO 9001:2015, emissions monitoring, evaluation of suppliers, audits, and assessments).
- Step 5: Benchmark your operations with other organisations within your sector.
- Step 6: Provide feedback to your key stakeholders on your sustainability activities (e.g. Sustainability Reporting, community engagement, communication with workers).
- Step 7: Continue to learn and improve your sustainability performance
Adopting an Environmental Management System based on ISO 14001:2015 helps your company to identify environmental aspects and impacts, identify regulations, set up environmental policies and prevent risks that may arise in the production process. In order to demonstrate fully the success of the environmental initiatives, a company may also seek third party certification from certification bodies in order to demonstrate conformity. Already some leading enterprises are requiring companies who wish to join their supply chain to show evidence of implementing recognised management systems.
Exploiting the opportunity of sustainable business has been demonstrated on the leading stock exchanges in the world which have already started to consider Sustainability as a key requirement in making companies competitive. The Boston Consulting Group in a survey carried out on executives, note that executives are increasingly taking time to mainstream sustainability strategies in their firms. Companies are beginning to be ranked on their Environmental and Social Governance (ESG) practices. It is only a little while before reactive organisations lose the “license to operate” from the stakeholders who make their businesses strive. Start your sustainability journey today!
