The word sustainability carries certain connotations when mentioned, both positive and negative. When used as intended, the word often insinuates environmental and societal protection, philanthropy, and the enabling of future generations. However, in recent years sustainability has been politicised to represent “wokeness”, particularly in America where right-wing politics has increased its attacks on equality and environmental stewardship.
The issue is that there shouldn’t be any sides to an argument that shouldn’t exist. If we entertain the argument that fossil fuels aren’t damaging the environment and that climate change is a myth, the nature or economics makes it a no brainer to adopt a source of energy that cannot run out rather than one with a limited supply.
Despite the obvious, the consensus is that short-term gains are the main objective and “hypothetical” consequences of climate change will impact a time where the decision makers are not alive. This isn’t the case – climate change is here and impacting our world now.
Every company has a carbon footprint, be it the waste from offices or the emissions from the manufacturing process. Stakeholders are now interested in the sustainability of the company they buy from, invest in and work for meaning there is a need for companies to act and consider sustainability factors. This doesn’t mean setting a net-zero 2050 target and leaving it for the next leaders to deal with, it means immediately integrating sustainability into the business model and proactively planning how to achieve short and long-term targets.
Away from the E, every company has workers, customers, suppliers and operates in local communities meaning they have an impact on each of these. Making sure this impact is positive maximises the performance of each which more often than not translates to higher revenues. For example, a more diverse workforce brings a range of perspectives than a homogenous one which allows for better decision making, and ensuring the company and its suppliers operate within human and labour rights laws reduces the risk of fines and reputational damage.
So why should a company care about sustainability? The question is always “What’s in it for me?” as short-term profits are a necessity over contributing to a positive environmental impact. Well the two actually go hand in hand. Sustainability is financially material to businesses not only because of the increase in regulation, but also due to a shift in stakeholder preference for more sustainable companies, products and services. Not engaging and adapting could result in fines for not adhering to regulation as well as reduced demand for products and service, missed opportunities to expand into different markets and missing out on investments. This isn’t just applicable to large companies but very much for SMEs too.
A lack of understanding shouldn’t be a deterrent, it should be the catalyst for change. This change doesn’t have to be monumental when starting to explore how your business can integrate sustainability. It’s a journey that will involve continuous learning and alterations as the business develop. However, it can’t be seen as a tick boxing exercise which ultimately leads to greenwashing. To successfully integrate sustainability into your business you need unrequited commitment and sponsorship from senior leaders, and you need the right talent to help drive this. While internal talent is certainly a requirement when things begin to develop past the “start-up” stage of the journey, external consultants are an affordable and efficient way to get started as well as take the initiative to the next stages.
However a company decides to do so, it’s clear that sustainability isn’t a trend or an in topic, it’s now a part of the economy and it won’t be disappearing. There are opinions that disagree with the importance of sustainability, but those will be the ones that will lose heavily in the long-run by not preparing for what’s coming now while regulation isn’t mandatory. There are plenty of opportunities to seize and now is the best time to start doing so.
Kelsey Francis is currently completing a PhD in ESG and Sustainable Finance at Nottingham Business School