Sustainability has long been a pertinent issue worth addressing. Many companies have for centuries battled out on what exactly sustainability entails. Business sustainability is synonymous with corporate sustainability. In other words, business sustainability can also be viewed as triple bottom line whereby companies manage the financial, social and environmental risks as well as opportunities. According to Hart, & Milstein (50), sustainability can be understood as the meeting of demands of the present population without having to cut down on the needs of the generations to come. From this definition, there is, therefore, a need to balance the short term and long term business needs. Based on the definition from ISO and the European Union, sustainability will entail a balanced approach for organizations to integrate stakeholders concerns into business operations in a manner that aims to benefit for to ensure sustainability over the long term, management teams need must do more than maximize shareholders profit. Enterprises require considering the needs of employees, customers and community at large. Thus, managing and coordinating the environmental, social and economic demands and concerns is a recipe for attaining sustainability. From a broader perspective, social, ecological and economic needs are considered the three pillars of sustainability. In the corporate world, they are sometimes referred to as a triple bottom line (McDonagh 34). The concept deviates from the traditional notion of the bottom line, which evaluates all efforts regarding their short-term effects on profits. With traditional corporate cultures, social and environmental concerns have at times been considered to conflict with financial goals. Depletion of non-renewable resources, for example, is not sustainable practice. Since alternatives require investments in infrastructure, continuing to rely on fossil fuels is the least expensive short-term option. The surge in demand for "green" products has opened avenues for entrepreneurs to reap massive profits.
Some of the ways in which a company can inculcate sustainability includes risk management strategy, altruism or through adoption of a sustainable routine in the business decision making process (Willard 17). Thus, sustainability issues require being part of a companys overall performance management practices. However, integrating sustainability initiative in daily business processes is quite challenging especially given the fact that the enterprise has to surge its transparency level, consistently measure results efficiently an efficient and systematic manner, incorporate sustainability into decision-making and business processes as well as ensure continued business momentum. Nevertheless, the enterprise stands to gain a lot by incorporating sustainability. Some of the merits associated with adoption of sustainability include derivation of strategic advantage, minimal waste disposal, increased networking and business connectivity, conservation of the environment through production of environmentallyfriendly products, enhanced brand image, better risk management and increased ability to attract capital from prospective investors (Pojasek, 84). Some of the areas that business should lay emphasis on in order to achieve business sustainability include:
Return on investment. As a matter of fact, sustainability requires an extensive timeline for organization to attain a favorable return on investment (ROI). Many companies focus their effort on creating value through sustainability first look to improving returns on capital. Focusing on the return on investment means reducing the operating costs through improved natural resource management (such as energy use and waste) (SAI Global). Companies drive down their costs by systematically managing their value chains. Staff motivation and retention through motivation through sustainability activities also helps add value to the business (Bansal 200).
Growth. Corporations that embark on sustainability also consistently revisit their business portfolio for the sole purpose of identifying new growth opportunities. Waste management, for example, reinvented itself as a provider of integrated solid offerings by adding waste reduction and waste to energy solutions to its services. Companies also screen rigorously to unfulfilled needs created by sustainability trends in line with their strategies and identify potential business partners.
Risk management. Detecting potential operational risks arising out of eventualities such as climate change require sound management of risks which cannot be the case if in the case whereby mishandling sustainability issues. The choice of companies today is not if, but how they should manage their sustainability activities. Businesses that utilize risk management techniques in handling sustainability issues requires to establish clear codes of conduct and ensure transparency in all their operations (Carroll, & Shabana 100). Business risks are numerous some of which include: Financial, customer, strategic and operational risks.
According to McKinsey survey, many corporations integrate sustainability principles into their businesses by pursuing goals that extend to large boundaries that concern the ego of the management. For example, saving energy, developing green products, retaining and motivating employees all of which assist the companies in capturing the value through growth and return on capital. Business opportunities that offer the highest return prompt the business to embrace long-term objectives while pursuing sustainable opportunities that hold the greatest value potential.
The main reason for embracing business sustainability is to create value of the shareholders for an indefinite period of time in the business and integrating opportunities as well as managing risks that result from the organization's economic, environmental and social responsibilities. It is thus a requirement that the business sustainability ought to cater to the enterprise and staff needs.
Business sustainability is broad-based and involves a range of diverse areas including organization behavior, operations management, accounting, finance, economics, business strategy, environmental science, ethics and social psychology. This approach, however, accounting based and fails to capture the time element that is inherent within business sustainability. As a requirement, business sustainability requires enterprises to adhere to practices of sustainable development. World Council of Economic Development (WCED) provides that sustainable development is that development that caters for the present demands of clients while still responding to future needs. Thus, for industrial development to be sustainable, it is required that essential issues such as economic efficiency, social equity, and environmental accountability need addressing at the macro level.
Ensuring long-term business sustainability requires the commercial enterprises to remain relevant in the market by generating significant amounts of profit and also growing by the changing market. Essentially, business sustainability provides a competitive advantage to the enterprise and helps differentiate the company from the competition. It is the onus of the company to improve the environment and deal with the changing business climate. Corporations feel comfortable doing the usual business, but a few of them want to threaten their competitiveness for the new virtue. A growing number of examples from diverse industries indicate the extent to which sustainable business practices is essential to the enterprise from bottom-line up. A good example is Unilever Company that has developed washing-up fluids that use less water, and sales multiplying and surging up to 1.59%. People get to name a favorite product or two whose brand associated with its green credentials. Thus, the central point is that sustainability can be much more that it has a role in any and all sectors.
Inculcating business sustainability and assist organizations to requires the organization to embrace stakeholder engagement. Enterprises stand a lot to gain massively from participation from clients, employees as well as the surrounding society. Engagement, in this case, entails understanding the position, getting to find a common ground as well as engaging stakeholders in joint decision making. It thus should not only involve pushing out the message but ensuring that these values put into practice. Additionally, the corporation can adopt environmental management systems that provide the structures and processes that help environmental efficiency into the firm's culture and mitigation of risks (Carroll,& Shaban 103). ISO 14001 is the most widely recognized standard worldwide. However, there exist other industry-specific and well as national specific benchmarks. Another means of inculcating sustainability is through reporting and disclosure. Sustainable practices, measurement, and control require collection of information to provide a perfect apparent ability to outsiders. A perfect epitome of a well-recognized reporting standard is the global reporting initiative. Adoption of the life cycle analysis in evaluating evaluates impacts with high precision can best be practiced by enterprises having the goal of leaping forward. In this case, the organization is required to analyze the environmental and social impact of the products they choose to utilize.
Every business ought to consider sustainability as part of risk management strategy. Thus, sustainability issues ought to be part of the overall performance management practice by including all stakeholder requirements and sustainability in goal setting process as well as incorporating sustainability initiatives into financial and operating plans. Additionally, this may involve paying close attention to sustainability metrics and reporting progress on sustainability initiatives to internal and external stakeholders. Nevertheless, it factoring in sustainability issues at all business levels helps in achieving a competitive edge can also help integrated sustainability indicators into balanced scorecard framework and thus help the company monitor its operations and how it is performing.
Businesses can choose to integrate sustainability in all another perspective of a balanced scorecard. Incorporating sustainability in the enterprise model serves as a catalyst for improving performance in all areas of the company. It is the finance department is mandated to conduct sustainability reporting. Sustainability reporting resembles financial reporting in the sense that both require data collected by entities per period. The challenge with sustainability reporting poses is that it requires additional requirements not typically found in business analytics and reporting systems. In reporting sustainability, several business intelligence tools are essential for use. Systems used have advantages such as: Efficient, are reliable, less error-prone. Although sustainability reporting in many countries is voluntary and auditable process, sustainability models are effective in that all sustainability data gets stored within a single system, together with the overall operational and financial management information (Oracle White Paper 12). The organization is thus able to analyze correlations, results, variances, and improvement opportunities, and to create a sustainable decision-making process.
Business sustainability is not only essential but also paramount to the organization. The application of knowledge, skills, tools and techniques to the organization's activities, products and services to attain the following: Identification of objectives and targets that must require achieving, eradication of impediments that could obstruct the organization from attaining its missio...
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