Sustainability in Business: Meaning, Examples, and Importance

In modern times, we often hear the term sustainability. It is used in a wide variety of topics – from people’s everyday sustainable life to business and corporate sustainability.

Ecological limits are a hard topic to talk about head-on. But it is becoming more and more apparent that without everyone’s help in reducing negative environmental practices, we are on a rough path towards issues like global warming, resource depletion, or even potential hunger. 

One of the main areas where sustainability is needed is business. 

According to the Global Infrastructure Hub, global statistics indicate that 84% of all carbon emissions are emitted by the private sector. Research from the World Resources Institute in 2023 further found that the top economically developed countries – China, the United States and India – and their economic activity are responsible for 42,6% of all global greenhouse gas emissions.

Such statistics highlight the need to involve businesses in the solution of potential environmental crises. 

Climate change, customer demand, and regulatory pressures have already started driving changes amongst firms. In fact, for the past few years companies have been implementing action plans to become more sustainable. 

In this article, we are going to explore examples of such sustainability practices and how they benefit firms. We will overview the major obstacles for global and UK businesses to take action and how they are responding to the challenge. Keep reading if you also want to learn how a company can get started on their own sustainability strategy. 

What Is Sustainability in Business?

In short, sustainability in business refers to conducting company practices in a way that doesn’t have a negative impact on the environment. To meet sustainability criteria, businesses need to operate without compromising the ability of future generations to meet their own needs.

Sustainability is about implementing best practices and eco-friendly rules regarding the wider environment. This means factoring in people and the planet for company decisions while generating a profit. Examples of such operations are producing less waste, conserving resources, lowering greenhouse emission, supporting fair labour and fair wages, and more.

Sustainability is divided into three pillars:

1. Environmental: emphasises the need for responsible management of natural resources. Here categories like greenhouse emissions, food waste, cleanliness of water, and more, are important.
2. Social: focuses on the well-being of individuals and communities. It does so by promoting fair labour practices, social justice, inclusion, education, healthcare, and other relevant social factors.
3. Economic: looks at businesses implementing practices such as reducing emissions, managing waste disposal, or promoting the use of renewable energy. 

Each of the three looks at sustainability from a different perspective. The main goal of the pillars is to create a balanced approach that benefits society, safeguards the environment, and ensures economic stability.

The Role of Corporate Social Responsibility (CSR)

Corporate Social Responsibility, or CSR for short, is a self-regulating business model or strategy. It is a subset of sustainability. While the latter can also be the essence of the business model and is tied to the wider community and the environment, CSR is often a set of additional corporate governance activities impacting the stakeholders of the business. 

The aim of CSR is to stimulate the accountability of the company to itself, the stakeholders, and the public. To put it simply, companies implementing CSR strategies are aware how the business is impacting every aspect of its activities. In this way businesses can operate in an effective way while benefiting society and the environment as a whole.

Among the major benefits of CSR are brand recognition and social impact. Whether choosing a company to work in or one to purchase from, people tend to prefer companies with high social involvement. 

This is really beneficial to firms because on the one hand it reduces employee turnover and improves staff morale. On the other hand, a CSR operations model is likely to bring in more customers as the company is involved with the consumers’ social values.

One of the best examples of CSR strategy implemented in the UK is the Plan A program by Marks & Spencer. The retail giant plans to become a net zero business across all operations by 2040. The company has developed a roadmap to help achieve all goals along the way. 

Primark has also implemented a sustainable strategy oriented towards ethical supply chains and fair trade. The company has set a goal to improve the welfare of all garment workers in its supply chain. It also introduced a circular economy approach to clothing production.

Importance of Organizational Values

Sustainability in business and the CSR model have core values that are hugely important to local communities, the general public, and potential business partners alike.

Promoting social and environmental values like fair pay, inclusive working environment, management of waste disposal, or using renewable energy sources, can highly contribute to the overall reputation of any company.

Implementing the core values and practices of the company throughout the workforce and the workplace is fundamental in achieving sustainability.

Examples of Sustainability in Business

Sustainability in business is a very broad term. This is why companies focus on different sustainable practices depending on the specific area of business.

Let’s take a look at some examples of initiatives that companies can implement.

Environmental Sustainability Initiatives

Best practices regarding the environment can be really simple things and ideas that make a large impact.

For instance, promoting recycling and the use of sustainable materials in the workplace is one such example. By encouraging employees to adopt a more sustainable lifestyle in the office, you impact their lives also at home. Some of them will adopt the same changes in their day-to-day life, because they will see the benefits.

Promoting the use of renewable energy in the chain of operations is also a very good idea. Renewable energy can be costly, but in the long run green energy sources are far less likely to damage the environment. Also, this will affect the company’s image in a very positive way.

Also, implementing energy-efficient processes at work can be very beneficial. For example, adopting a hybrid model of work, where employees work some days from the office and some from home, can significantly reduce emissions related to transportation as well as waste and water usage. 

Socially Sustainable Practices

Socially sustainable practices are adopted by bigger companies, mostly in the retail, manufacturing and technology sectors.

One example can be promoting fair pay in support of local communities. For companies with business in more than one country it’s really important to implement ethical labor practices. Companies should enforce these rules no matter where their operations are situated.

For retail, we have many examples in the modern world. More and more companies turn to innovative ways to reduce their ways through recycled materials and packaging. 

There’s been huge development in the area of recycled fabrics with some already being preferred instead of more common materials. For instance, eco-friendly skin has been widely accepted in the retail industry for years.

Socially sustainable examples in the field of technology are also more and more common. Companies are aiming to reduce the energy needed for tech production. Others are more and more involved in waste recycling.

Manufacturing is the area where it’s most difficult to implement practices all the way. Here, we are talking about optimizing large production volumes and creating efficient supply chains. Implementing sustainable goals like the reduction of greenhouse gases, mindful waste disposal, and other, are a step in the right direction.

Benefits of Sustainability in Business

Sustainability in business can be hugely beneficial not only to society and the planet but also to companies.

Let’s explore some of the major potential gains for businesses.

Environmental and Social Impact

According to a 2024 research paper by YouGov, 60% of Britons think that climate change is the biggest threat to civilisation. 

With that being said, limiting greenhouse gasses and disposable waste can be hugely beneficial for gaining new customers in the UK. 

Based on another research done by the British Business Bank, 39% of all the millennial workforce in the UK consider a company’s sustainability before applying for jobs. A great sustainability strategy can then become that competitive advantage when it comes to attracting talented workers. 

Financial Gains

The finances of any business can be hugely impacted by implementing sustainability practices. For instance, reducing waste disposal and improving energy efficiency can lead to reduction of costs for the company, 

Another key takeaway from the above-mentioned YouGov research is that 21% of all Britons are willing to invest more in products that favour sustainability. Also, 64% of British citizens are prone to pay 10% more for sustainable packaged foods and drinks. 

Such statistics can give companies the confidence of developing sustainable innovations, charging more premium prices, and earning higher profit margins. 

Enhanced Reputation

The financial benefits are intertwined with the enhanced reputation of the company. If the business is sustainable and promotes itself that way, people are more likely to choose it over competitors.

One other major benefit is investor appeal. More and more investors decide to fund sustainable firms as opposed to their major competitors. A well-developed sustainability policy can also increase the overall market value of your company.

How to Improve a Company’s Sustainability

Both small and large steps can improve business sustainability. Every company yet needs to decide how to start and what’s best for its operations.

In the following sections, we share general tips on how to start improving the sustainability of your business.

Developing a Sustainable Business Strategy

While CSR activities can be beneficial, it is best if you implement a whole sustainable business strategy that encompasses all areas of work in the company. 

When developing a whole business model around sustainability, you can make sure that even from the start, the final objective of the company is to do business in a sustainable way. If you begin with your sustainability goals in mind, this can help you focus not only on short-term issues, but also on the long-term impacts.

Planning your sustainability strategy is not only an exercise for mature businesses. It can already start before creating your startup or even when generating your business idea. You can then always revisit your potential socio-environmental impact. 

Implementing Sustainable Practices

Implementing sustainable practices throughout your business is another way to boost your company.

For example, think about small actions you can initiate in the workplace. You can encourage employees to recycle waste in the office or use reusable bottles and food containers. This way you will significantly reduce waste and the cost of its disposal. 

Another great starting point is to assess your business operations. Evaluate and eliminate any bottlenecks or harmful activities that limit an eco-friendly impact. This can involve reconsidering your supply chain, reducing the waste materials or even creating new processes for your company services.

You can also re-examine your carbon footprint and other impacts. Set ecological benchmarks along with your business goals and track your progress. 

Engaging Employees and Partners

Engaging others in positive company culture with the goal to achieve sustainability is key. 

The first step is to make sure everyone in your company understands the company’s values. Meeting on sustainability challenges, employee feedback and resources on the subject can help your staff understand the larger goal of the company. Highlighting their key role in every sustainable practice is really important, because most people don’t see the bigger picture.

Involving other partners of your business is also equally important. By letting them know what your goal is or involving them in the process with different events or educational seminars, you are likely to gain a new ally towards sustainability. 

Aligning together on common ecological standards or developing a more sustainable transportation route are just a couple of ways to collaborate with your partners and improve your sustainability efforts. 

Overcoming Challenges in Sustainability

We know it can be overwhelming when trying to make your business sustainable. And it’s no secret – there are a lot of challenges for companies.

Below we are going to highlight some of the main concerns regarding sustainable business practices.

Balancing Costs and Benefits

Most companies don’t implement sustainable practices because they are more costly. The problem here is that the management doesn’t see the long-term benefit for the company.

For example, renewable energy is more expensive than regular energy. But in the long-run it will decrease costs because it’s more efficient. Also, it will boost company image and attract new investors and customers, resulting in bigger financial gain in the future.

Navigating Regulatory Requirements

Most countries in the world have different government regulations on sustainability. Here in the UK, the Council for Sustainable Business is helping companies achieve the business goals of the Environmental Improvement Plan – a 25-year project aiming at making the UK a sustainable and green country.

The main goal for the UK is to become net zero by 2050. This commitment has made the UK economy one of the first in the world to prioritise sustainability in a major way.

Following all regulatory requirements can be time-consuming and resource-intensive at times. Such regulations can change and evolve often, making it hard to keep track of their updates and adapt accordingly.

Thankfully, there are all sorts of government resources, experts, and companies that can help with this matter. Employing a sustainability expert can be one of the best business decisions you’ll ever make. That way, you can be sure that your company is following all current laws and standards.

Measuring and Reporting Progress

What gets measured, gets done in the sustainability field. But how do you measure sustainability? While it’s not that simple, there are some metrics you can keep track of. 

For example, you can measure the waste you’re producing before and after implementing sustainability strategies. You can also measure greenhouse gas emissions, water waste, types of materials used, or recycling rates.

One data point that will be measured in the future is the whole positive impact of your business on nature and the local environment. Such data is harder to collect, firstly, because it requires multiple measurements throughout time, and secondly, as numerous elements need to be tracked for their progress. 

This is why effective data collection and analysis is a key priority in this impact accounting process. A good idea again then is to employ an impact consulting company that will measure all the data for you and comprise a very detailed report. That way you can be sure that you’re not missing some key findings.

Current Trends in Sustainability

One of the most followed trends, especially by big companies, is Net Zero. This means achieving an amount of greenhouse gas emissions that is balanced and not detrimental to the environment.

There are many countries in the world that are committed to reaching this goal by the year 2050. This has led businesses to pursue more sustainable sources of energy, invest in recycling their waste, and develop different strategies for reducing carbon emissions.

One other major trend isimplementing circular economy principles. Waste contributes to the emission of greenhouse gases and creates pollution. Yet discarding most materials is a large waste of resources. Recycling and repurposing also enable companies to regain back value from their expenditure on materials. 

Adopting a nature-positive approach to manufacturing and agriculture has also become a trend in the world of sustainability. More and more companies are diverting funds and workforces in areas dedicated solely to biodiversity. World food production is one of the major players in this segment, adopting new ways of growing food while promoting the recovery of nature.

Both the circular and nature-positive trends align with consumers’ rising engagement with sustainability. More and more are becoming increasingly aware of the huge impact on the environment, as a result of products and activities harmful to nature. 

This is why more and more consumers are starting to prefer using green energy at home, buying eco-friendly products, recycling waste, and even growing food themselves. Such activities are also becoming an attractive market opportunity for companies. 

The Future of Sustainability in Business

The World Economic Forum highlighted in 2023 two aspects in the future of business – digital evolution and sustainable practices. With the pace of change of the digital and sustainability realms, modern companies need to think about the future.

Using more and more digital technology in all business aspects – from product development and manufacturing to operations is tightly connected to sustainability. Why?

The evolving troves of data, different AI and Cloud solutions can significantly cut business costs in every business aspect. A cloud-based, for instance, merchant account allows for simple funds management that does not require trips to your bank. 

For the consumer, implementing modern technology can be beneficial, because it will make it easier to use all sorts of products. For example, the possibility for companies to take payments online in recent years has made it easier for every consumer to navigate modern life. This is ultimately also a financially sustainable practice because it cuts costs for retail companies and all sorts of client operations. 

Beyond saving costs, digital payments can also contribute to sustainability by decreasing finance-related emissions. 

For example, powering the company data center by renewable energy sources can create a more sustainable solution in comparison to cash-based options. A paperless payment process can also be created by implementing digital receipts, which can be generated electronically even through a mobile POS terminal.

For sustainability, the World Economic Forum highlights the importance of strategic decisions early on. Based on their research, 80% of the environmental impacts of a product are linked to decisions made at the design stage. By shifting the business to a “do-less-with-more” approach can significantly increase the overall sustainability in all aspects.

Conclusion

Sustainability is no longer optional, and many businesses have recognised the need to implement new ways of running their operations.

By adopting different environmentally-friendly practices, embracing new business models, and thinking in the long-term, companies can do more with less. This can deeply affect their image, the costs of the businesses and the interest from investors.

Being a sustainable business is not only beneficial to society and the planet, but it can also tremendously benefit companies in the long run. 

Frequently Asked Questions

What does sustainability mean to a business?

Sustainability in business is the way the company conducts all operations without negatively impacting society and the environment, both short and long-term.

What is an example of sustainability in business?

A great example of sustainability in business is a company using only renewable energy for all of its operations.

What are the three pillars of sustainability?

The three pillars of sustainability are environmental, social, and economic.