The business mindset has shifted. Governments, societies and stakeholders expect corporations to engage in business practices that are good for people and the environment, not just the bottom line. This is because sustainable economic growth is no longer just a business imperative — it’s critical to our future.
Environmental risks, such climate action failure, dominate the World Economic Forum’s lists of the top global risks, in terms of likelihood and impact, according to the Global Risks Report 2020. Societal risks, like water crises and infectious disease, were also named among the top threats. In terms of impact, however, infectious disease ranked No. 10, while climate action failure ranked first. With this in mind, it’s obvious we can no longer sleep on taking action to address climate risks, which are projected to have 10 times the impact of something like the COVID-19 pandemic.
Against this backdrop, businesses must have a corporate sustainability strategy to address climate volatility, create a better world for our communities and ensure long-term economic growth is possible.
What is Corporate Sustainability?
Corporate sustainability is about more than just protecting the environment, although that is core to this approach. A sustainable business is one that works in step with societal and environmental goals, rather than at odds with them.
Corporate sustainability is a business strategy for long-term growth that works in harmony with people and the planet.
There are three pillars of corporate sustainability:
- The Environmental Pillar, which includes strategies to eliminate and offset greenhouse gas emissions, use green energy, eliminate toxic hazards, reuse or recycle materials and manage waste, reducing the carbon footprint throughout the value chain.
- The Social Pillar relates to practices that promote the health, safety and wellbeing of employees, customers and communities. This includes activities like establishing an effective safety culture, ensuring customers have the information they need to use products safely and protecting access to basic resources.
- The Economic Pillar is about ensuring businesses can survive and thrive to make a long-term positive impact. Examples of this might be reducing costs by using less plastic in product packaging or creating green jobs.
Corporate Sustainability vs. Corporate Social Responsibility
Corporate sustainability is closely related to corporate social responsibility, though it is a distinct business practice. Corporate social responsibility is a broader term, used more generally to describe practices or actions a business has taken to advance social and environmental causes. Corporate sustainability, however, is the strategy a business uses to make a positive impact on the environment and our communities. Where corporate social responsibility is about what a business has achieved, corporate sustainability is all about how a business is going to achieve environmental, societal and economic goals and remain viable for years to come.
The Impact of Sustainability
Corporate sustainability is good for business, plain and simple. Given the challenges our world faces, a focus on social and environmental impacts ensures businesses can create long-term value. Corporate sustainability helps mitigate risks, build brand reputation, increase revenue, reduce costs and attract investment. A business that engages in sustainability practices is securing itself a place in the future economy.