Managing Business Sustainably

The buzzword today in all spheres across the globe is ‘Sustainability’. Any forum you happen to go, one cannot escape the hype around sustainability. I have been attending a few conferences in India and globally, and the heart of all these conferences has been sustainability. Well it is very true, only when you talk and discuss about an issue, awareness spreads and when more and more people manifest the issue, tendency to act towards resolution and continue doing it develops in people.

The UN’s ‘Brundtland Report’ famously defined, ‘Sustainability’ as “’meeting the needs of the present without compromising the ability of future generations to meet their own needs.’ In practice, this means building businesses that endure not just economically but also ethically and ecologically.

A Google search of the term ‘Sustainability’ throws the following definition ‘Sustainability is the practice of meeting present-day needs without compromising the ability of future generations to meet their own. It involves balancing three interconnected pillars: environmental protection (preserving natural resources), social development (ensuring well-being and equity for all people), and economic growth (creating lasting prosperity without harming the other two pillars).’

The core idea thus, is to ensure that the present generation uses the available resources responsibly and protects them wherever needed, so that they are available for the long term, fostering future viability and intergenerational equity.

A sustainable business, or a green business, is an enterprise that has (or aims to have) a minimal negative (or potentially positive) impact on the local or global environment, community at large, society, and economy.

Such a business operates to minimize its negative environmental and social impacts, ensuring long-term economic viability by integrating environmental, social, and economic concerns into its strategy and operations. It balances profitability with fair labour, resource efficiency, and positive community impact, often using Environmental, Social, and Governance (ESG) metrics to guide its efforts and demonstrate progress towards a healthy planet and prosperous society for present and future generations.

A sustainable business attempts to meet the ‘Triple Bottom Line’. The triple bottom line (TBL or 3BL) is an accounting framework with three parts: social, environmental (or ecological) and economic.

In traditional business, accounting and common usage, the ‘bottom line’ refers to either the ‘profit’ or ‘losses,’ which is usually recorded at the very bottom line on a statement of revenue and expenses. Over the last 50 years, environmentalists and social justice advocates have struggled to bring a broader definition of bottom line into public consciousness by introducing ‘Full Cost Accounting’ or ‘True Cost Accounting (TCA)’. It is an accounting approach that values and measures the hidden impacts of business activities on the environment, society and health.

Managing for Sustainability: In rapidly evolving global economy and global village, sustainability is no longer an optional feature; it has become an essential strategy for long-term business survival and success. Consumers, investors, and other stakeholders increasingly expect businesses to operate responsibly, minimize their environmental impact, reduce waste and contribute positively to environment and society.

Managing a sustainable business does not mean only reducing one’s carbon footprint, but it involves a broader action by embedding sustainability into every aspect of operations, strategy, decision-making, policies, and stakeholder relationships.

Rather, in the long term, it is in the interest of the business that it should focus on sustainability for obvious reasons such as, ensuring long term profitability by reducing waste and increasing operational efficiency, enhancing brand reputation in the eyes of modern consumers, (especially the Millennials and Gen Z who prefer brands that are eco-conscious and socially responsible), being future-safe as regards governmental regulations in view of stricter environmental laws, and gaining investor confidence as most investors focus on ESG.

In reality, managing for sustainability goes beyond compliance. It is now about embedding environmental, social, and governance (ESG) principles into the very DNA of a business.

Sustainable Business Strategies: Managing a sustainable business is not just about compliance of mandatory guidelines or corporate social responsibility, it is about thinking forward and future-proofing your business. Here are few cost effective strategies that organizations can implement easily for managing sustainable business enterprises.

1.Integrate ESG into core business strategy: Environmental, Social, and Governance (ESG) considerations are no longer optional, they are central to business strategy. Businesses should set measurable sustainability targets for key aspects such as energy usage, paper usage, waste reduction, ethical sourcing etc. and monitor progress continuously.

2.Adopt Circular Economy Practices: Design products for durability, reuse, and practice recycling to minimize waste. Take ownership for the waste generated from your business and adopt ways to responsibly dispose of the waste.

3.Responsible Supply Chains:  Choose suppliers astutely and deal with them transparently. From coffee beans to microchips, supply chains can make or break a sustainability effort. Businesses should assess suppliers on environmental and labour standards, incentivize sustainable practices, and encourage circular economy models, where waste becomes input for new processes.

4.Employee Engagement and Training: A sustainable business is powered by a workforce that understands and practices sustainability. Training employees on creativity, waste reduction and segregation, energy saving, ethical practices, and innovation fosters a culture where sustainability is not a burden but a shared value.

5.Innovation for Green Growth: Innovation is one critical factor which can go a long way in ensuring business sustainability. May it be through renewable energy adoption, eco-friendly packaging initiatives, digital transformation to reduce paper use, or transformations in operations, all positive innovation initiatives would foster business sustainability.

Conclusion: Presently we live in a world of climate risks, stringent regulations, stiff competition and shifting consumer preferences, where sustainability management emerges as a strategic advantage. Businesses that act now will not just survive, but they will thrive in future.

Managing for sustainability is not just an ethical choice, it’s a business imperative. As climate risks grow and resources become scarce, companies that fail to adapt will be left behind. The future belongs to businesses that can balance ‘People’, ‘Planet’, and ‘Profit’, the triple bottom line that defines business sustainability.

Sustainability is not a destination, but it’s a journey. For businesses, the question is no longer ‘Why should we go green?’ but ‘How fast can we get there?’