Although sustainability has become a bit of a ‘green buzzword’ in Australia’s business landscape, it’s important to keep in mind that sustainability as a concept has roots outside of environmentalism. There’s more than one way for business owners to ensure that their enterprises are operating ‘sustainably’. And even though implementing environmentally conscious initiatives can benefit your company’s bottom line in its own way, there are other initiatives that businesses can implement to further improve on the overall sustainability of their enterprises.
To provide some guidance, we’ll be outlining some key concepts that all Aussie business owners should familiarise themselves with. These tenets will help you cultivate sustainable practices for your own business.
Sustainability through process evaluations
Let’s start with a basic definition of sustainability in business. At a foundational level, sustainability refers to the ability to maintain a process or practice over a prolonged period of time. So sustainable business practices should be regarded to be any practices that can improve the longevity of your enterprise.
Routinely assessing your business insurance is a great example here. When looking to secure business insurance in Australia, business owners must take a myriad of factors into consideration, ranging from environmental risks to operational risks and financial risks. Ensuring that you maintain a business insurance policy that provides cover for your risks as they change over time, is crucial to keeping your company operating smoothly over the foreseeable future.
In other words, the best processes aren’t static, as the best solutions aren’t either. So reevaluating your company’s insurance policies and other risk management strategies at routine intervals throughout the fiscal year can help drastically minimise your chances of falling victim to your identified business risks, be it in the form of an operational disruption or a financial loss.
Understanding ESG and the triple-bottom-line approach
Recontextualising the concept of ‘sustainability’ so that it aligns with the ESG framework. A three-pillar approach to business sustainability, the ESG framework covers the environmental, social, and governmental impacts of your business and not just its recorded profits.
This has also led to many referring to the ESG as a ‘triple bottom line’ approach, which is opposed to a traditional bottom line approach that involves prioritising profits above all other performance measures for your business. Business owners who want to ensure that their business is operating sustainably with regard to all three of these pillars can implement tailored initiatives to help ensure that their enterprise reaches these sustainability goals.
Here’s a brief example of what your ESG goal-setting may look like:
Boosting Environmental Sustainability
- Reduce office waste production
- Optimise energy and resource consumption
- Lower your workplace carbon footprint
- Invest in carbon credits and other climate-conscious initiatives
Boosting Social Sustainability
- Develop community engagement and volunteering initiatives
- Implement equal-opportunity hiring processes
- Maintain a commitment to upholding WHS/OHS standards and processes
- Invest in employee wellness initiatives
Boosting Governmental Sustainability
- Maintain industry and regulatory compliance
- Maintain ethical financial management processes
- Develop an ethical corporate structure/hierarchy
- Practice routine risk management for your business
How to establish a culture of sustainability for your business
With a solid understanding of how an ESG framework would look, now is the time to strategise on how you can incorporate these practices into your daily operational processes. Doing so can help you establish a culture of sustainability in your business, which will, in turn, help solidify any newly implemented sustainable practices as fixtures of your company operations.
Here are some of the best methods you can use to cultivate a strong culture of sustainability within your organisation.
Establish strong and clearly defined values for your business
Of course, in order to maintain sustainable practices, you need to ensure that your company values are shared and upheld by every member of your staff. This can be done by integrating an exploration of your company values into employee induction programs, and, most importantly, by ‘walking the walk’.
Whilst the idea of ‘performative action’ certainly has its flaws, it doesn’t hold a candle to all the issues of ‘performative non-action’. So if you have outlined a goal to maintain environmental practices in your company mission statement or recorded company values, then make sure that you’re actually maintaining those practices.
If you’re able to establish and stand by your company values, it’s highly likely that your employees will follow your lead.
Introduce ethical supply and distribution processes
This is an extension of ‘walking the walk’, but considering how large of an impact that your supply chain activities can hold on your company’s carbon footprint, we felt it deserved its own paragraph entirely. If your company is able to make a commitment to only working with suppliers who abide by all their licensing and compliance requirements, then you can increase your chances of securing supply partners that will be able to accommodate your business as it continues to grow.
This is crucial for eCommerce businesses or even brick-and-mortar retailers who are looking to scale up their enterprises, as stock shortages or fluctuations in stock quality, are some of the foremost obstacles for businesses who are looking to boost the size and speed of their production line.
Partnering with ethical suppliers and distributors may also help you reduce your company’s carbon footprint, namely by allowing you to carbon offset your supply and distribution activities.
Stay strategic when making business investments and mapping growth
Another superb way of investing in sustainable initiatives for your business is to simply make sustainable investments. Of course, this isn’t the same as adding Apple stock to your personal investment portfolio. For business owners, making sustainable investments means being highly strategic with the way you spend your company capital. The best way to do this is to prioritise investing in assets that are more likely to provide a higher return.
How do you identify these investments? For modern business owners, it’s recommended you take full advantage of the analytics software and market insights that are available to you. Assessing digital transformation investments made by your competitors can help you make well-informed investment decisions for your own enterprise. Similarly, business owners also have the option of working with ICT and industry consultants or even pitching investments to their own company stakeholders and investors in order to receive feedback from these authoritative figureheads as well.
Do away with the concept of ‘exponential growth’
Finally, as we delve deeper into the digital age, more businesses are recognising that sustainability is a far healthier and more realistic quality to chase than the abstract construct of ‘exponential growth’. The major flaw with the traditional ‘bottom line approach’ is that profits aren’t the be-all and end-all of a company – even if your revenue is what pays dividends.
As we mentioned earlier, there are other metrics for success. And if Aussie businesses are able to prioritise these metrics alongside optimising their revenue streams, they’ll find that the profits will be positively impacted in the process as well. So do away with the construct of ‘exponential growth’, as it’s serving fewer and fewer businesses nowadays. On the contrary, maintaining an ESG framework or triple-bottom-line approach will help you ensure that your enterprise is well-positioned to continue thriving in an increasingly climate-conscious global economy.
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Yes, sustainability in business involves so much more than just environmental initiatives. However, the fundamental benefit of the ESG framework is that these three pillars are also interconnected. That means that giving back to your community will have positive ripple effects that also strengthen your local environment and government as well. So you don’t even need to invest in all three pillars of the ESG in order to practice sustainability in your own business.
If you are, however, looking to ensure that your business is sustainable for its own longevity, then the tips outlined above will help you get there. Just remember to stay adaptable with your sustainable initiatives, and to seek input from not just your workforce, but members of your wider community as well.