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Sustainable Business Practices: Building a Better Future

May 05, 2024

In the current market, customers want to do business with ethical companies that are minimizing their environmental impact. That includes lowering their carbon footprint, using sustainable materials and partnering with nonprofit organizations committed to environmental sustainability.

For a company to be successful long term, sustainability and social responsibility are no longer a luxury; they’re necessary for attracting both customers and employees. Following sustainable business practices allows a company to better position itself while also contributing to society as a whole.

Introduction to Sustainable Business Practices

As more people implore businesses to protect the climate, sustainable business practices are not just nice to have, and they are not just for positive public perception. And the general public is keenly aware that corporate sustainability goes beyond environmental stewardship as well, or simply donating to organizations that promise a greener future. To truly make an impact, companies must also consider their social responsibility and economic sustainability.

Corporate social responsibility (CSR) is a voluntary set of guidelines that cover how a company will make a positive environmental and social impact. CSR can be implemented in many different ways depending on the primary values of a company, such as only using recycled materials, or creating programs to empower female leaders.

Not only are these sustainable business practices important and in an organization's best interests morally and financially, but also for long-term growth. Factors like these are a must for businesses that want to attract and retain top talent while standing out in the market. In fact, as their concerns over climate change grow, more than half of Gen Z and millennials consider a company’s environmental impact before accepting a job.1

Understanding the Triple Bottom Line: Environmental, Social and Economic Sustainability

In the past, companies primarily focused on profits to measure their success. Now, the triple bottom line methodology requires companies to focus on social and environmental concerns as well.2 Among their other key performance indicators, companies should measure corporate social responsibility efforts and eco-friendly business practices, and report on them as with other goals.

Of course, focusing on people and the planet in addition to profits helps companies make a positive impact on the world. But even further, sustainable businesses focusing on the triple bottom line often outperform their competitors financially.3 This is likely because consumers want to feel they are making a difference, and they might feel that they are doing good themselves when they patronize a company with sustainable solutions.

Strategies for Implementing Sustainable Practices in Business Operations

Companies can incorporate green business practices across their operations. In the procurement stage, they can choose to work with vendors that have sustainable supply chains and whose sustainability goals align with their own. Procurement managers can also assess a potential partner’s social responsibility before agreeing to do business with them.

Businesses can implement resource efficiency, renewable energy sources, waste reduction, green product design and other strategies during product development and manufacturing. They can also use renewable energy in their offices and other facilities.

Environmentally-friendly business practices are not a new concept, but they might be difficult to introduce and explain to older generations who did not grow up with these standards. New MBAs and entrepreneurs entering the workforce with change management skills can help companies of all sizes shift to enact corporate sustainability measures. At Yeshiva University, for example, students can take courses that focus on entrepreneurialism and how to create businesses that use processes, practices, talent, operations, services and resources in a sustainable and responsible manner.

Benefits of Sustainable Business Practices for Companies and Society

The benefits of sustainability go beyond catering to future generations of consumers. Sustainable business models offer a competitive advantage in the marketplace and also help companies mitigate risks. For example, if a company operates in a highly regulated field, sustainability reporting and other best practices will aid in compliance.4

Additionally, sustainable businesses can enhance their brand’s reputation and improve employee satisfaction, with 80% of retail workers saying they want companies to address their environmental concerns.5

Businesses prioritizing the triple bottom line can positively impact society by reducing their overall carbon emissions and contributing to a sustainable supply chain. These businesses may also be inspired to innovate to meet customers’ sustainability expectations, which benefits society as a whole.6

Measurement and Reporting of Sustainability Performance

Eco-friendly business practices depend on sustainability reporting. Common key performance indicators include carbon dioxide emissions, energy usage, supply chain miles, waste reduction, recycling rates and social impact.7 Companies can monitor their social impact by reporting how they treat suppliers and how well their suppliers treat their own employees.

As more businesses aim to adopt more sustainable business models, they may follow frameworks such as the Global Reporting Initiative and those established by the Sustainability Accounting Standards Board.8,9

Challenges and Barriers to Implementing Sustainable Business Practices

A lack of resources, a lack of awareness among employees, a short-term mindset and regulatory uncertainty can challenge a company’s sustainable development initiatives. To combat these challenges, companies need to communicate how sustainability fits into their overall mission and values.10 This should be included in the company's employee handbook, as well as on their website, in onboarding materials, and in regular internal communications.

If leaders can clearly communicate how sustainable business practices benefit the company and its employees, they will help create buy-in and overcome resistance to change.11

Sustainable Supply Chain Management and Vendor Engagement

Sustainability doesn’t stop within the company itself. On average, a company’s supply chain contributes 11.4 times more emissions than its standard operations.12 To reduce these numbers, companies need to work with vendors to enact sustainability initiatives or partner with ethical companies from the start.

Companies can also diversify their supply chain to alleviate these concerns. Before working with any vendor, a company should investigate its hiring and labor practices to make sure they’re ethical.

Innovations and Trends in Sustainable Business Practices

As climate change becomes more apparent, people are embracing the circular economy. This involves sharing, refurbishing, repairing and recycling products.13 The circular economy focuses less on consumerism and more on responsible consumption, such as renting clothes.

Some sectors are incorporating sustainable practices, like regenerative agriculture. This is a way to regenerate topsoil with limited use of pesticides and other harmful materials.14 Sustainable finance is also prioritizing investments in green businesses and other environmental business strategies.15

Case Study of a Successful Implementation of Sustainable Practices

There may be some companies that immediately come to mind when you think of sustainability: Tom's, Coca-Cola and Tesla, to name a few. Cosmetics giant Estée Lauder is one of those brands, as they had committed to achieving net-zero emissions by 2020. As of 2023, 100% of the company’s operations are powered by renewable energy. The company has achieved carbon-neutral status, and 71% of its packaging is recyclable.16

As stated before as a key pillar of sustainable business, this is not all just for show. By annually publishing its sustainability metrics, Estée Lauder is holding itself accountable and boosting its brand image in the process.

Be a Part of the Global Solution With an Online MBA From Yeshiva University

Yeshiva University’s accredited online MBA program offers the foundational skills you need to enter the exciting world of sustainable business practices. Our expert faculty includes business leaders at the forefront of social responsibility. Additionally, capstone projects with the YU Innovation Lab give you hands-on experience with real business scenarios and challenges.

Contact an admissions outreach advisor today to learn more.

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  3. Retrieved on April 8, 2024, from tiicker.com/insights/triple-bottom-line
  4. Retrieved on April 8, 2024, from engineeringnews.co.za/article/regulatory-compliance-key-to-driving-sustainability-2021-07-02
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  6. Retrieved on April 8, 2024, from imd.org/reflections/triple-bottom-line-what-is-it-and-how-does-it-work/
  7. Retrieved on April 8, 2024, from sustainabilitymag.com/diversity-and-inclusion-dandi/five-kpis-businesses-use-measure-sustainability
  8. Retrieved on April 8, 2024, from globalreporting.org/
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  13. Retrieved on April 8, 2024, from ellenmacarthurfoundation.org/topics/circular-economy-introduction/overview
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  16. Retrieved on April 8, 2024, from elcompanies.com/en/our-impact/social-impact-and-sustainability-report