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.

One of five Walmart facilities equipped with solar panels in Puerto Rico. One of Walmart’s broad sustainability goals is to be powered by 100% renewable energy.

One of five Walmart facilities equipped with solar panels in Puerto Rico. One of Walmart’s broad sustainability goals is to be powered by 100% renewable energy.

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 [1].

Despite this latency, however, there are burgeoning trends in corporate sustainability that provide direction for the future.

Reporting Tools

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.

Employee Engagement

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 [4]. 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.

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§ 3 Responses to The Growth of Corporate Sustainability

  • meploch says:

    Although adaptation of sustainable principles in corporations has been slower than ideal, it is good that corporate companies are starting to step up to the plate. Some companies have a longer way to go than others in terms of the types of sustainable tools employed, but if anything, these popular corporations are setting an example of where companies should be going in the future. This sustainable future shouldn’t be directed at only large companies, but small businesses as well.
    It goes without saying that practicing sustainability gets a small business up and running faster, and gives its employees something to be proud of. Small businesses that write sustainability objectives into their business plans will see that it can save them money, enhance their brand image and increase investment opportunities. Small businesses do not have to get overshadowed by corporate sustainability initiatives, as they have the opportunity to make the same changes!

  • emichugh says:

    So interesting! I think employee engagement is fascinating to think about. When I was fresh out of undergrad I went to the State of Illinois Green Government Symposium. The Symposium focused on the steps that various agencies were or could be taking to make their offices more sustainable. My favorite speaker talked about the book “Nudge” (which is great) and how you could change peoples behavior for the better if you made it super easy for them or made it feel like their peers were judging their actions! The speaker said that he was able to get employees to use the more energy efficient revolving doors by putting little stickers on them that teased people about doing it – something like, “come one, everyone else is doing it!” At first people would actually kid each other about it, and it really worked – the doors were used more because of those interactions.

  • danacs90 says:

    I love the point about employee engagement. I often hear about sustainability initiatives companies are pursuing and think it sounds more like a laundry list than a comprehensive vision. Once employees realize their individual connections to sustainability, the culture of an entire corporation can shift! “Going Green” should be more than checking actions off of a list, right? Great post :)

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