The Growth of Corporate Sustainability
06/16/2014 § 3 Comments
By Brad Lufkin, Education and Research
More often than not, in order to convince businesses to adopt sustainable practices, it has to be shown that the practices make financial sense; unless these efforts help the company’s bottom line, no action will be taken. With rising consumer pressure and increasingly available technology and processes, however, the adoption of sustainability as a key business tenet is inevitable.
The “business case for sustainability” is tired at this point, and it’s now generally accepted that participating in sustainability initiatives will lead to improvements to a company’s bottom line. So what is the delay in the adoption of sustainable practices across the board? One of the major hurdles seems to be the bureaucratic organization companies — sustainability wasn’t a primary concern when many business structures were initially developed, so there is a delay in operations and results. Behavioral economists also blame status quo bias and groupthink for some of the stagnancy seen in the adoption of corporate sustainability .
Despite this latency, however, there are burgeoning trends in corporate sustainability that provide direction for the future.
As the importance of internal sustainability at companies continues to grow, accountability is becoming crucial. Pressure can come from the company’s shareholders, employees, customers, activists, or any other stakeholders. Sustainability reports are becoming a much more common practice, but the tools necessary for tracking the data for various metrics are still developing.
Compared to the tools that are used for tracking financial metrics, the tools used for sustainability reporting are still fairly primitive. The capability of companies to answer to those who come asking questions about their environmental efforts is limited by the tools that are used. These tools can also increase the overall transparency of a company, creating a more engaging and open environment.
As the actual operators of a business, employees can be the strongest drivers of change within an organization. “Green Engagement” and education has recently become much more institutionalized [2, 3]. In order to ensure the success of sustainable efforts, employees must value and be aware of the efforts being made; an internal culture of sustainability must be created. Sustainability must be fully embedded in the psyche of the company if the success of environmental efforts is to follow.
Hope for the Future
Despite these obstacles, there are examples of companies that have exerted an honorable effort toward taking the lead in corporate sustainability. While its treatment of its employees is an issue for another day, Walmart is pulling its big-box weight when it comes to pushing sustainability into the mainstream — completely voluntarily. Landfill waste was reduced by 80% in the US and ASDA (their UK Company) sends zero food waste to landfills . They have done this primarily through recycling programs, food donations, and reusing organic material (for animal feed, biodiesel, etc.). Walmart has also made concerted efforts to purchase its food from suppliers that have been certified as sustainable [5, 6]. The largest retailer in the world is doing its part to push sustainability into the mainstream.
As sustainability permeates further into long-established business models, the more standard it will become in all aspects of society. Largely, the momentum of the adoption of sustainable practices in businesses relies on the “top from the top” — how much support comes from the company’s senior members? Ultimately, however, it looks to be sustainability’s effect on companies’ capacity to compete that will drive change and innovation.