Unilever launched a dishwash liquid named, ‘Sunlight’, which needs less water to be used as compared to other brands. Other water saving products showed a significant impact with 20% growth in other categories.
Finland’s Neste was founded as a petroleum refining company around 70 years back. But today it generates over two thirds of its profits from renewable fuels and sustainability related products.
These are examples of how some companies decided to study the impact of products on environment and create environmentally friendly products. Our corporate decisions today will impact our future, environment and posterity in unprecedented ways. We might feel that change in decisions is unnecessary and unprofitable while we consider sustainability goals. But, for the society as a whole and for our business too our corporate decisions might harm the environment and the society.
What is embedding sustainability in corporate decision making?
Whenever we take a corporate decision, we need to integrate social, environmental and economic considerations into our business operations. We require to consider the long-term approach to create values balancing the profitability along with the impact on society and environment.
Benefits of embedding sustainability in corporate decision making:
- Efficient operations
- Improvement in brand reputation
- Creates loyal customer base
- Gives access to new markets and partnership
- Increased employee engagement
- Reduction in regulatory and legal issues/challenges.
“When you prioritise sustainability into your existing processes, you’re already on your way to making significant change,”
- Janina Nakladal, Director of Sustainability at Celonis.
- Embedding Sustainability in corporate decision making is vital
Beyond business impact:
To remain relevant in the present business world its necessary to embed sustainability in strategic / corporate decision making. Times have changed; every company has to contribute to the society they function in and draw profits from. It is not merely sufficient for companies to focus on profit maximisation without considering the impact on society, and environment. They have to consider the impact of their operations on a macro level.
Consumers, stakeholders and investors today wish to know if your organisation is taking responsibility of the impact of the business operations on society and environment.
Sustainability in every aspect of business:
Companies need to embed sustainability in their operations and supply chain processes. In every interface with the customers, they need to reflect their commitment to environment and social welfare.
Challenges in embedding sustainability in corporate decision making:
- Insufficient data management:
There is a lack of data management and measurement. Most companies lack data and metrics to track and measure how they have performed on sustainability. Are their efforts paying and are they effective? So, it’s tough to detect the improvement areas, track the impact of the efforts and initiatives.
Companies should show interest and inclination to invest in creating an efficient data management and measurement system. Often it is asked what could be the motivation to create and invest in such systems? Well, as companies benchmark against other companies to compare their performance it would be evident if they have been able to make a considerable impact.
- Avoid looking at short-term profits:
At times top management gives into the pressures from investors, and stakeholders. Then the sustainability agenda and investments are looked at purely with an eye on the short-term profits. Sustainability efforts and initiatives end up being shallow and just at the periphery rather than being at the core of the strategy. But there is a need to have a long-term view where considerable focus and attention is given to sustainability efforts to yield business benefits.
- Lack of a collaborative effort:
Sustainability procedures are complex and require collaborative efforts from stakeholders, employees, consumers, suppliers/vendors, management and communities. This collaborative effort is surely lacking, which results in only a few parties struggling to implement sustainability ideas. The key stakeholders have to identify the party who is impacted the most? Everyone’s concerns and challenges should be considered while including sustainability in the decision-making process. Companies should also approach other organisations to benefit from their efforts and expertise.
At Professa we guide companies to adhere to sustainability norms and educate companies with the benefits of doing so. Get in touch with our team to know more.