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Sustainability Plan: How it can be designed and implemented in your company

implementing sustainable business plan

by APLANET , APLANET

May 12, 2023

Sustainability Plan

In this article, we’ll investigate what a sustainability plan is, how it relates to the Sustainable Development Goals (SDGs) and how its implementation can help your company in a number of ways. We’ll also take a look at the benefits of adopting a sustainable approach to your business and we’ll give you a step-by-step guide to creating and implementing an effective sustainability plan in your organisation. So, accompany us on this sustainability journey and discover how a sustainability plan can boost your company’s long-term success and resilience.

What is a sustainability plan and why is it so important?

63% of Spanish workers believe that sustainability policies, such as the one we’re exploring here, are a determining factor. These are the results from a study recently published by Compromiso RSE (in Spanish), a specialist CSR website. As we can see, ESG criteria (i.e. environmental, social and corporate governance) are growing in importance.

Defining a sustainability plan

A sustainability plan is a guide that sets clear, measurable and realistic objectives to improve an organisation’s sustainability. In addition, it needs to work in harmony with the UN’s Sustainable Development Goals (SDGs), which are aimed to be achieved by 2030. Generally speaking, it should follow the European Union’s lead in reducing the company’s carbon footprint.

It is worth highlighting the fact that the EU stands out from other organisations of its kind in that it implements realistic and specific policies. What’s more, the plan needs to include all workers, directors, clients and investors linked to the business. By ensuring these key components are incorporated, companies all over the world will be able to effect real change.

Benefits of implementing a sustainability plan

The European Environment Agency has been urging us to adopt plans to combat this pressing issue since 2015. In fact, it declared that Europe is far from reaching its target of “living well, within the limits of our planet”. For this reason, it is now more important than ever that we fully understand the advantages of these kinds of guidelines:

  • Improved corporate image . Four out of every five large companies in Spain increased their sustainability investment in 2022, according to Deloitte (in Spanish). One of the main reasons for this was the need to show a commitment to the planet. The same study revealed that 74% of people are worried by the role that companies are playing.
  • Reduced operating costs . Sustainable policies have an overwhelmingly positive effect on the value chain in the medium and long term. This is mainly a result of optimising the use of resources and reducing waste. Increasing your company’s energy efficiency is a great way to ensure a promising future.

A step-by-step guide to creating a sustainability plan

Nowadays, every company can choose exactly how to adopt its own sustainability plan . However, it is worth noting that there are a number of regulations that must be observed, which contain some important aspects. Of these, the most important to consider are state regulations which are then transposed into law in EU member states, such as:

  • Spanish Law on Cooperation for Sustainable Development and Global Solidarity (2023). This forces companies and institutions to also focus efforts on combating hunger and creating healthy environmental conditions.
  • Spanish Sustainable Economy Law (2011). This called for businesses to join together in the fight against climate change. It marked an important milestone in this regard.

Step 1: Perform a materiality analysis

First of all, it’s vital that you know how to create a materiality analysis . This will help you infinitely when deciding on which actions should take priority and other relevant aspects. You will be able to optimise the investments your company makes in terms of time, as well as human and financial capital.

In order to prepare a materiality analysis, you’ll need to provide in-depth details of your corporation’s impact from an environmental, social and economic viewpoint each year. In other words, you’ll describe what your company is doing to bring about real change. Next, you’ll have to find out which resources are available to you and try to make them more sustainable.

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Step 2: Identify sustainability goals and objectives

Your chosen goals must meet certain requirements so that they can be effective:

  • Specific and detailed . Do away with vague proposals and make firm commitments that are in line with societal demands. In particular, this refers to issues such as minimising your carbon footprint and cutting down on natural resource wastage.
  • Measurable . It’s crucial that you assess your progress by using relevant metrics. To do this, establish a series of indicators, as you’ll see in step four. Some of the more fitting ones include the percentage of GHG emissions reduction and carbon footprint offsetting.
  • Assessment and monitoring . Objectives must be subject to a critical evaluation during the planning stage. Once they have been implemented and you’ve started to work towards them, ask an independent body to come and check that they are actually being met.

Step 3: Drawing up strategies and actions for your sustainability plan

It goes without saying that any action you decide on must be focused on meeting the goals that you set in the previous step. This is the only way to bring about your desired changes and minimise obstacles and difficulties . As such, they need to form part of a detailed guide which all members of your team, and even society as a whole should be involved in creating.

Some strategies have a far-reaching influence that goes way beyond the sector itself. Give priority to these kinds:

  • Optimising energy efficiency (in line with the guidelines of the Institute for the Diversification and Saving of Energy [IDAE]).
  • Effectively and intelligently managing waste, whilst preventing the misuse and contamination of natural spaces.
  • Integrating an eco-friendly policy in the production chain, such as tourism sustainability plans .

Another cornerstone that offers many possibilities is collaboration between companies. In any case, it is worth broadening your scope and also working alongside bodies and NGOs that are dedicated to improving companies’ sustainability.

Step 4: Setting and monitoring key performance indicators (KPIs)

Some of the most common KPIs that you can include in your company’s sustainability plan are:

  • Renewable energy penetration . Make full use of the grants offered by public bodies such as IDAE. They tend to be focused on solar energy, whether photovoltaic, thermal or hybrid installations. The latter in particular is starting to show great promise and potential.
  • Energy efficiency in production . Industrial activity is one of the main causes of GHG emissions. Adopting measures that reduce electricity consumption is of utmost importance. To help achieve this, the most effective KPIs you can use are those that concentrate on company energy consumption.

One of the key ways in which APLANET can be of service is by helping you set indicators that are sure to contribute to reaching the goals you’ve set. This is a fully personalised service that is adapted to the needs of your company, and our real-time data management system will make sure you stay on the right track. This ensures that your investment is being used effectively.

Step 5: Communicating and participating with stakeholders

When adopting an environmental sustainability plan , it’s a good idea to identify your different stakeholders. This usually divides your company, the people that comprise it and the different organisations that interact with it into groups. The most effective plans are those that involve all parties affected:

  • Investors , who are responsible for providing the financial capital required to carry out the company’s sustainability plan .
  • Clients , who, as we mentioned earlier, are mostly willing to pay more. What matters to them more than anything else is that they are supporting an eco-friendly solution.
  • Shareholders , who may belong to other companies or entities focused on CSR. These provide invaluable help when searching for shared goals.

Step 6: Reviewing and continuously improving your sustainability plan

This final step never really comes to an end, as it just keeps going as a cycle. We recommend establishing a methodology for constantly reviewing, monitoring and developing your plan. Therefore, you’ll need two professionals to take care of this. One of them needs to be part of the company’s senior management, while the other should be an independent specialist.

Together, and with representatives for all stakeholders , they will embark on the review process. Following this, they will report back on the progress to those who have invested in the plan. The aim of this is to show exactly how their time and money have been used, as well as the milestones that have already been achieved and those that are still in progress.

This is when you’ll have to sit down and review each of your KPIs one by one in order to compare the degree to which each of them have been achieved and determine whether or not the company is heading in the right direction. If, on the other hand, it is deemed to be going in the opposite direction, there’s no need to worry: this step will allow you to detect the causes and further develop your sustainability plan .

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Conclusions and recommendations for creating an effective sustainability plan

We are firm believers that this needs to be a three-pronged approach that tackles the economic, environmental and social scope of the company in order to provide a true reflection of its current situation. This also includes ensuring that the needs of its clients, investors and society as a whole are being met.

  • Get in touch with experts in this field to create a network of collaborators, both internal and external. This will give you a valuable and constant flow of ideas.
  • Report on your progress and challenges . Your company should provide frequent updates on its achievements and shortcomings. Don’t be afraid to ask for advice.
  • Use supporting software . One example is the program developed by APLANET, which allows you to manage all your information efficiently and give you complete control over traceability.

Create a sustainability plan that meets your company’s goals with the help of APLANET. With our software, you can collect data and manage your indicators and information all in one place, while also generating your own reports. Request a demo .

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Organizing for sustainability success: Where, and how, leaders can start

Sustainability and environmental, social, and governance (ESG) issues affect how all companies do business —and increasingly so in recent years. More companies, and their investors, are recognizing sustainability as a strategic priority that involves significant business risks and opportunities. But historically, few companies have organizational structures that are designed to treat sustainability as a material business issue. Instead, sustainability activities—and the organizations that support them—have focused primarily on investor relations, PR, and corporate social responsibility.

The “sustainability organizations” that still operate that way (and there are many) are tasked with managing stakeholder communications, target setting, and reporting. While those tasks are important, they are also insufficient for sustainability organizations to be successful. Our experience suggests that success is more likely when executives empower sustainability organizations to engage proactively and strategically hold them responsible for creating measurable impact. Only then will companies be able to maximize the value at stake from their sustainability initiatives (see sidebar, “A leader’s guide to embedding sustainability in corporate strategy”).

A leader’s guide to embedding sustainability in corporate strategy

To make sustainability a true organization-wide issue and a pillar of company strategy, CEOs and senior executives must be leading from the front. In our experience, leaders are most effective at doing so when they follow these three strategies (usually in this order):

  • Embed sustainability in the company’s strategy-setting process. This is a prerequisite for the effective management of sustainability—and something that senior leaders are best positioned to do. The goal is not simply to have a great sustainability strategy but rather a corporate strategy that includes sustainability as a core component.
  • Shape the portfolio to reflect an integrated strategy. Once a company’s sustainability-related priorities are clear, companies must make decisions on capital allocation, R&D funding, and portfolios accordingly.
  • Scale up sustainable business practices through a full transformation. To incorporate sustainability in business planning and to empower and motivate the whole organization to take action on these issues, leaders should approach sustainability as they would any other new large-scale change effort. To ensure buy-in across the organization, it’s important to be clear about which sustainability topics the company will and won’t prioritize.

To get sustainability programs right, companies have big decisions to make. To start, they should choose which issues under the broader sustainability umbrella should be the responsibility of their sustainability organizations and which issues should be left to other parts of their businesses. The issues range widely, from building new low-carbon businesses and commercializing green products to managing environmental compliance and ESG reporting more proactively. As companies mobilize to respond to increasing sustainability concerns, many have struggled with the differences between sustainability and other business issues in the trade-offs involved, decision-making and governance processes, and even employee and leader mindsets.

So how do executives build sustainability organizations that are well placed and empowered to help their companies meet stakeholders’ increasing expectations, manage sustainability-related risks, and capture business opportunities? In this article, we outline four ways that leaders can guide the organizational redesign of their sustainability work and why they must think differently about sustainability compared with other, more traditional business issues (Exhibit 1).

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Design according to sustainability topics , not sustainability overall

Sustainability is often used as a catchall term covering a great many topics. But for any given company, few topics will be of equal importance. Our work shows that companies address sustainability issues more effectively when they design their sustainability organizations to focus on each sustainability topic the company is prioritizing (for example, green hydrogen or its subtopic, operational decarbonization).

To do this well, companies should define the list of sustainability topics that matter for the organization, either because they are important to the business or because they are the areas in which the company is uniquely positioned to make a difference. One way to do so is with evergreen materiality assessments, 1 A materiality assessment is the process of identifying and prioritizing the potential sustainability topics that are most important for a company to address because of their potential impact on the business or its stakeholders. The process requires the engagement of both internal and external stakeholders, especially business-unit leaders with profit-and-loss responsibilities, investors, customers, nongovernmental organizations, regulators, and other key partners to the business. which account for the potential impact from, and likelihood of, a range of issues that could affect the company. Based on its materiality assessment, a company can then develop a short list of priority topics for its sustainability organization to cover. This will help companies make better decisions on resourcing and organizing around the issues that matter to their business.

When it comes to supporting sustainability work at the topic level, our experience suggests that a modular organizational design—rather than one holistic, central sustainability organization—often works best. A modular design gives companies the nimbleness to address emerging topics in a more agile way. Indeed, many sustainability topics arise quickly: for example, in 2018, the number of earnings calls that mentioned “plastic waste” increased 340 percent year over year. 2 Audrey Choi, “The business case for investing in sustainable plastics,” World Economic Forum, January 20, 2020, weforum.org. In practice, even if there’s a dedicated center of excellence for a certain topic, it doesn’t necessarily need to be part of the central team. Instead, it could be embedded in a business unit that has particular expertise on the topic or will be primarily responsible for leading the company’s response to it.

To support sustainability work at the topic level, our experience suggests that a modular organizational design—rather than one holistic, central sustainability organization—often works best.

One company we worked with built a carbon-management organization that distributed initiatives among different parts of the company, rather than relying on a central organization that covered all sustainability topics or that managed all of the organization’s carbon initiatives. The R&D department, for example, focused on researching and developing new low-carbon innovations. A separate business unit was created to commercialize low-carbon offerings to customers. Meanwhile, manufacturing sites set their own carbon-reduction targets, embedded their decarbonization initiatives in line with site-level turnaround schedules, and were held accountable for implementing those initiatives. The procurement team focused on decarbonizing the company’s supply chain. Finally, a lean central team coordinated carbon-emissions reporting and other carbon-related activities across the company.

Give your central sustainability team the decision rights to execute change

In our experience, it’s important for companies to have a central sustainability team to coordinate their work on these topics. Our experience also suggests that companies don’t need large central teams to implement their sustainability agendas successfully. While we have seen many companies start their sustainability transformations by allocating more central resources to these issues, we have also seen that having a smaller central team and more dedicated resources in the business lines that execute the detailed planning and implementation of sustainability can be most effective. In fact, among the companies we have worked with, some of those with highly effective sustainability programs have lean central sustainability organizations whose mandate is to incubate new sustainability ideas and integrate sustainability initiatives across the company.

What makes the central team particularly effective is having the decision-making authority to execute change, particularly regarding priority sustainability topics that affect multiple functions or that have a material impact on the overall organization. This authority has several dimensions. First, the central group should also engage the board of directors on critical sustainability topics, since the board holds the ultimate decision rights on such issues and the company’s strategic direction. The central team should also be empowered to hold others accountable, which it can do by setting centralized targets. Individual sites or businesses then come up with specific initiatives, timelines, and plans for pursuing those targets, and the central team tracks their progress while also maintaining a corporate-wide view of the company’s performance on the topic.

To ensure broad engagement in and commitment to common sustainability goals, the central team can enlist the company’s leaders to develop and define a corporate-level sustainability agenda. When the central team has a clear mandate from the business, it can better see that the sustainability agenda cascades through the organization and that business units have clear guidance on which priorities to take on.

At one company with a successful sustainability organization, an existing business unit worked closely with the central sustainability team to incubate a new business for end-of-life products. Once the idea reached a defined financial milestone and level of technological maturity, the responsibility of business building shifted away from the central team to that business unit. Since the business unit was involved in the effort from the start, the transition of the business’s decision rights was smooth.

To be clear, not all decisions need to be made by the central team, which could overstretch it (especially if it’s a small group) and divert attention from specific priorities. Rather, cross-functional decisions and those that are highly material to the full company are best suited for central-team oversight. 3 For more on how to classify and make decisions appropriately, see Aaron De Smet, Gerald Lackey, and Leigh M. Weiss, “ Untangling your organization’s decision making ,” McKinsey Quarterly , June 21, 2017. The right to make other decisions, such as those that involve single functions, can be assigned to leaders or teams that are more closely associated with those units.

Find the structure that best fits your sustainability agenda—and your organization as a whole

Reporting structure is usually the first topic that comes to mind when companies consider organizational redesigns, and so the first question we are often asked is, “Which organizational structure is ideal for capturing the full potential of sustainability?” In reality, there is no single “right” answer for the design of a sustainability organization and no one-size-fits-all approach, beyond the general principle that the structure should be well integrated into—and compatible with—the rest of the company’s setup.

There is no single ‘right’ answer for the design of a sustainability organization beyond the general principle that the structure should be well integrated into—and compatible with—the rest of the company’s setup.

That said, we do see that some organizational models tend to be more effective than others at elevating sustainability as a true strategic priority (Exhibit 2).

Compared with two other models that we see most often today in which sustainability is embedded in a support function or fully decentralized within business units, these three models help link sustainability to an overall strategy and give a sustainability organization real decision rights:

  • Large central team with few business-unit resources. In this model, a large central team plans—and maintains the decision rights to—most sustainability initiatives and also coordinates with individual business units that are actively working on specific sustainability issues or have expertise related to the topic. The central team incubates sustainability initiatives before handing them off to the business units and supports activities that have no other natural owners in the organization. It also ensures that sustainability priorities across the company have sufficient budgets and staff and that the organization stays focused on its priority topics. A central team may also have the best view of broader sustainability trends and stakeholder demands, though it’s likely less equipped than business units to respond to new sustainability-related market opportunities and risks. As an example, Newmont Goldcorp (a leading gold-mining company) was prompted by shareholders and its board to improve its management of sustainability issues after completing a merger. It responded quickly, creating a centralized sustainability group from 2002 to 2007 to design and drive the implementation of global environmental standards across its operational sites. This central group also managed decision making and the allocation of execution resources to sustainability issues.
  • Lean central team with decision rights and many business-unit resources. In this structure, the prioritization of sustainability topics is largely a top-down process, led by the lean central team, to ensure that a common company-wide agenda and targets are in place. Business units have a mandate to develop specific initiatives to achieve company-wide goals, which they do by deploying their own resources. Business units also have the flexibility and resources to set up and work on sustainability initiatives of their own, in line with the central team’s guidance. In our experience, this structure can be most effective at companies that have already embedded sustainability in the organizational culture, which increases the likelihood that sustainability becomes a true cross-functional effort. Since 2019, this model has been in place at International Paper, a leading pulp-and-paper company. Its lean central team sets the company-wide sustainability agenda and focuses on both managing external relationships and integrating internal efforts. Meanwhile, business-line leaders drive the sustainability agenda. They set targets, develop the company’s sustainability initiatives, assume responsibility for delivering on those initiatives (including the coordination of resources), and embed sustainability into day-to-day operations.
  • Central team that deploys agile or SWAT teams to business units. This structure puts a central team in charge of deploying sustainability-focused task forces to individual business units. Once a task force is embedded in a business unit, it helps with the planning and initial execution of that unit’s priority sustainability initiatives and builds capabilities so that the business can eventually run its own initiatives, once the task force leaves to support another unit. This facilitates the deployment of sustainability expertise and the sharing of best practices across the company, as well as the nimble reallocation of resources in response to the rapidly changing sustainability landscape. From a talent-development perspective, this model (what we call the “helix organization ”) also allows for a clearer separation of leaders—between those who help individuals develop capabilities and those who oversee employees’ day-to-day work. The result is that sustainability talent can be developed both ways.

Prioritize the design of processes and governance—rather than reporting lines—that account for sustainability’s complexity and dynamic nature

In our work on organizational redesign, we have found that many companies’ default mode is to focus solely on reporting structure. But we know from experience and research that going beyond “lines and boxes” corresponds with a much higher chance for redesign success: in a McKinsey Global Survey on organizational redesigns , respondents were nearly three times more likely to report successful redesigns if they focused on improving multiple elements of the organization (for example, performance management, business processes, and culture), not just on changing reporting lines. With respect to sustainability, which involves reorganizations that are more complicated and multifaceted than those of a typical function—and priorities that can shift much more quickly than in other areas of the business—we have found that it’s critical to think about redesigning sustainability-related processes and governance early on. Several guiding principles can help with this kind of effort.

For one, companies’ processes for making sustainability-related decisions should be robust and clearly define when an issue or decision should be escalated from the business unit to the central sustainability team. Decision-making processes should also include frequent discussions among stakeholders and fast decision cycles so that cross-functional or high-level topics can be identified and resolved quickly.

In most cases, the central team should be empowered to make decisions on topics that individual business units can’t resolve on their own. If the central team, in turn, finds it can’t resolve high-priority issues, it can escalate them to the executive team or a C-suite sustainability council. We have seen many companies fail to adapt their cadence on engaging with sustainability issues as they would with other topics. But that’s what sustainability necessitates, since many of these topics require quicker decision making and responses than other business issues. For many companies in traditional and mature sectors (for example, petrochemicals, cement, steel, and other heavy industrials) that are used to longer decision-making cycles, this may require a significant mindset shift. The executive team can help effect such a shift by clarifying that sustainability is a strategic priority that requires different decision-making approaches.

Another principle of effective sustainability processes and governance pertains to capital allocation. Sustainability investments often have different risk–return profiles and greater uncertainty than other, more traditional investment types. In our experience, many companies that lead on sustainability have set aside a separate pool of funds dedicated to sustainability initiatives, defined different hurdle rates for sustainability investments, introduced an internal carbon price to account for carbon impact and related risks, and put in place integrated financial and sustainability criteria to facilitate capital-allocation and M&A decisions.

Finally, it’s valuable for companies to develop sustainability-specific performance metrics. While the specific metrics will vary depending on the topic, the same principles of good performance management of other business activities also apply to sustainability: setting measurable targets (both financial and nonfinancial), establishing incentives (such as linking compensation to sustainability performance), and putting in place regular performance reviews of sustainability.

Sustainability is no longer an issue of compliance for most companies but rather a strategic and operational one. Once senior leaders integrate sustainability into their corporate strategy, they will benefit from having a dedicated organization to support their sustainability efforts. There is no right structure that applies to every company; each will need a structure of its own and will likely need to adjust this structure as business conditions and requirements change. A well-designed sustainability organization, we find, can give the company the capabilities that it needs to capture value and manage risks from sustainability in a systematic and even transformational way.

Aaron De Smet is a senior partner in McKinsey’s New Jersey office; Wenting Gao is an associate partner in the Houston office, where Thomas Hundertmark is a senior partner; and Kimberly Henderson is a partner in the Washington, DC, office.

This article was edited by Daniella Seiler, a senior editor in the New York office.

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How to Integrate Sustainability into Business Strategy: 5 Key Steps

The challenges to accelerating decarbonization action require business transformation .

implementing sustainable business plan

It’s clear from the latest climate science that the world is not doing enough, fast enough to decarbonize. Without immediate and profound changes to how society lives and does business, the world is likely heading for a future marked by widespread changes to the climate with devastating consequences for every region across the globe.  

The business community is alert to the crisis and has started to make progress in foundational ways: working to understand what regulators and standard setters expect, gathering data to help measure their impact in society, and responding to their stakeholders through dialogue and disclosure. Importantly, companies also embracing a broader concept of sustainability as a strategy for business resilience and long-term success. 

Still, there continues to be a worrying gap between most corporate actions-to-date and the deeper changes required to achieve net-zero and the 17 United Nations Sustainable Development Goals (SDGs). 

If the business community is aware that every moment counts, and companies are starting to align themselves to a more sustainable world, then why hasn’t more progress been made to help address climate change? 

In a word, uncertainty. 

To learn more about some of the key barriers preventing deeper sustainability integration, Deloitte Global interviewed 25 leaders from around the globe in the investment community, business world, academia, and non-profit sector. The interviews revealed that even seasoned leaders are having trouble keeping up with the changes to the operating landscape over the last few years. There are now economic, social, ethical, and regulatory reasons for companies to change, but they face integration challenges at all levels, complex stakeholder environments, and ambiguity over their role as corporate citizens. 

implementing sustainable business plan

Along with shining a light on the challenges, the interviews also reveal the following set of five key steps to help leaders gain clarity, align resources, prioritize goals and spending, and overcome hurdles to progress on their sustainability transformation journey. 

Integrating sustainability into the core of the business begins with taking a 360-degree view of a company’s operational relationships with people and the planet. This process can often turn into a meaningful conversation about overlooked risks, operational inefficiencies, and broader business realities that could affect business’ future performance. 

For many companies, getting this level of insight may require deep investments. This may include new data collection tools, improved data sharing with suppliers and customers, developing a data quality assurance process, and establishing internal governance for tracking the firm’s progress against stated goals and identified risks. Organizations that are doing this well pull together strands of data from various systems and make it easily digestible for different audiences. 

Having access to more data is not the same thing as having the right data. The key is to have data that reflects the sustainability risks and opportunities that are material to the business. The specialists interviewed suggest that companies look closely at the resources and relationships that make them successful to identify the opportunities for making the value creation process more sustainable. 

In turn, understanding the ESG matters that are relevant to the business can create a new rubric for evaluating and monitoring enterprise risks, prioritizing spending and making decisions that integrate sustainability aspects into the company’s DNA: “To be successful in the new business reality, companies need to understand if they are leaders or laggards in their sector transition paths and how they manage trade-offs between financial and non-financial targets,” said one interviewee.

Aligning data collection efforts to the company’s key risk and opportunities is a good starting point: “There is a world in which companies could stick to 20 metrics that were deemed material for their sector,” one interviewee said. “This would serve as a reasonable proxy for performance along the most important and meaningful dimensions for sector peers.” 

For those overwhelmed by the number of metrics, another interviewee recommended that companies leverage the emerging set of International Financial Reporting Standards’ “Sustainability Disclosure Standards” to focus on climate-related risks.  

Root goals in strong governance: Embedding sustainability into business operations requires accountability  

To help elevate accountability for sustainability integration, some companies are assigning responsibility to the senior leaders of the organization, including the board of directors, the CFO, or a cross-functional sustainability steering committee.  

To help drive governance over sustainability data and accounting, some companies are assigning sustainability information disclosure to the CFO. “Finance teams have the capabilities to put strong controls in place, build systems that capture data once and reuse it for multiple purpose,” one interviewee explained. “They are also the teams responsible for management reporting and the information systems that support internal strategy and business decision making.” 

Chart your own course: Gain traction on advancing the sustainability journey through authentic stakeholder dialogue about the future and the company’s progress on sustainability   

No two sustainability transformations are alike. Even within the organization, the integration process may require different strategies for different business units. 

That’s why it’s important to be honest about where your business is on the transformation journey. “Quality of dialogue is critical here,” one interviewee said. “We are at a tipping point where investors, auditors, business, and others need to collaborate to find solutions and address challenges.” 

Directly engaging with stakeholders can be a chance to understand their needs and improve connections that can support the business transformation. Some companies formally incorporate stakeholder dialogue into the goal-setting process, while others find that these dialogues can open the aperture for bigger shifts in the business.  

Stakeholder mapping can also help companies target communications, based on the needs and uses of the various audiences. The interviewees recommended that companies take a “multidimensional” approach. 

Reframe the problems: Managing uncertainty requires getting business leaders comfortable with making decisions without a perfect answer  

While most corporate leaders have grown up in a business culture that expects answers to come from accurate and timely information, sustainability will likely require business leaders to make decisions when they simply might not have the information, when choices are ambiguous, and the business outcomes vague. 

“The differences with financial reporting are not trivial,” one interviewee explained. “The fact that ESG reporting will be forward-looking is an important distinction. There is also the timeframe, [which] is significantly longer than for traditional financial reporting. The data challenge gets compounded, and further compounded if you want that data to be verifiable. You need data based on science-based metrics. You need data on Scope 3. Those challenges are there. You are more likely to get qualitative than quantitative information.” 

It may be uncomfortable for leaders to admit what they don’t know, but it’s more accurate to present information in terms of ranges, scenarios, and confidence intervals and with explanatory narrative if the pace or direction of change may shift over time.  

When it comes to setting goals and reporting progress, leaders should be authentic. This may mean limiting the scope at the outset to focus efforts and build internal capabilities. “Figure out a couple of things [that] have impact and make progress on those,” one interviewee recommended. “This has been the most effective way to break through the noise and be a part of the conversation.”  

Sustainability programs require long-term thinking, so leaders may have to make the business case for spending on programs with much longer payback periods. It’s important to begin talking with stakeholders about the idea of making legacy investments in long-term risk reduction, resiliency, and business continuity.  

Once companies start changing processes to help reduce factors such as energy consumption, water use and waste, they often discover new opportunities to help reduce operating expenses, improve efficiency, and even to generate new revenue altogether. 

Making progress with sustainability integration is not about having all the answers, but about having a process that can help people understand problems better, align decisions to the core purpose of the organization and create space to experiment with solutions. 

Commit together to a better future: No organization or institution can address the sustainability challenge alone.  

If the goal is to create a new economic system that operates within the planetary boundaries and ensures quality of life to all members of society, then every organization is being called to do its part—in partnership. This last (and often overlooked) goal in the list of 17 SDGs recognizes the importance of building multi-stakeholder partnerships and voluntary commitments to help mobilize resources, build capabilities, and drive innovation. 

Transformation can only happen if everyone works together. What’s missing is key players (financial market, regulators, and corporates) working together. We are seeing more collaboration, but the question is if it’s happening fast enough.” 

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Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.

About Deloitte

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Six Steps to a Sustainability Transformation

August 31, 2021  By  Rich Hutchinson ,  Vinay Shandal ,  Judith Wallenstein ,  Mark Wiseman ,  David Young , and  Kilian Berz

If you think the disruption caused by digital has been far-reaching, just wait. That impact will pale in comparison to the changes coming as companies wrestle with how to transform their businesses to become truly sustainable.

Sustainability, a company’s ability to create positive environmental and societal impact, is rapidly reshaping competitive advantage. It is remaking whole industries, blurring and in some cases obliterating boundaries between industries, and generating new waves of growth. The scale of the disruption that will play out over the next few decades, along with the opportunity it creates, will be staggering. Just the push to limit global temperature increases to 1.5°C—the central sustainability challenge of our time—will drive a massive transformation of the global economy and require investments totaling an estimated $100 trillion to $150 trillion by 2050 .

But while the opportunity is clear, the way to drive a successful sustainability transformation is less obvious. To succeed and create a competitive advantage, companies must simultaneously integrate an environmental, social, and governance (ESG) lens into every element of the business and capture the value that this transformation creates.

On the basis of our extensive experience working with companies and investors to drive sustainability transformations, we have identified six actions that distinguish leaders from the rest of the pack:

  • Develop a sustainability strategy anchored in purpose.
  • Capture business value.
  • Build new sustainable businesses.
  • Make the core sustainable.
  • Build capabilities.
  • Own the narrative, and engage investors and stakeholders.

Companies that fail to take up the challenge, and instead continue to view sustainability through a compliance or ESG reporting lens, will miss the opportunity to tap into lucrative new markets and create new, winning business models. They will also see their space for creating shareholder value narrow dramatically. On the other hand, companies that execute effectively in all six areas will truly transform their business and turn sustainability into a competitive advantage.

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Develop a Sustainability Strategy Anchored in Purpose

Companies must devise a strategy that takes as its starting point the principle that sustainability is a source of durable competitive advantage. The strategy must clearly connect to the company’s purpose , focus on long-term value creation, and be driven from the top, including the CEO and board.

To outline a clear strategy, companies should step back and look at their performance in all material environmental, social, and governance (ESG) areas. Then they should focus on the areas that matter the most to all stakeholders—not just to investors—today and in the future, and where outperformance can contribute most significantly to long-term business success. That prioritization is critical to helping companies avoid the all-too-common pitfall of creating a profusion of siloed initiatives that ultimately have little impact.

At the same time, companies can reassess their existing business model with the objective of understanding its degree of sustainability. This assessment will likely reveal opportunities to enhance the environmental and societal benefits that the company generates, but it will also strengthen the company’s competitiveness by improving the resilience of its business model.

Capture Business Value

Companies that lead in sustainability, as reflected in ESG performance, can also outperform their rivals financially. But capturing the value that sustainability efforts create can be challenging.

That’s why companies must be intentional and systematic about capturing this value. To start, they must develop a robust business case that accesses all sources of value that their sustainability efforts create. These sources are numerous and varied:

  • Enhanced brand equity and loyalty
  • Price premiums
  • Fresh growth in the form of share expansion, penetration of new markets, or new businesses
  • Operational cost savings
  • Advantages in sourcing, including reliable supplies of scarce inputs
  • Improved access to or reduced cost of capital
  • Reduced risk
  • Valuation premiums

Once they have clearly articulated those business cases, companies should ensure that key areas of the business—including marketing, sales, product development, and finance—have the capabilities not only to capture the value created, but also to track and measure it accurately.

Companies can move quickly to test and scale changes and initiatives in areas where value capture is straightforward and likely to yield immediate financial results. Such efforts will validate the power of the overall sustainability transformation and can be the source of revenues or cost savings to fund other aspects of the journey.

Take, for example, decarbonization for auto OEMs. According to BCG analysis, eliminating 60% of scope 1 and 2 carbon emissions during an initial phase of decarbonization will generate significant annual savings, and those cost reductions can help fund the costs of eliminating the remaining 40%. Even in cases where manufacturing a sustainable product leads to higher costs, the increase often proves to be marginal and more than offset by the enhanced value perceived by customers. For instance, the increased cost associated with creating a smartphone with a net zero supply chain is less than 1% for a $400 smartphone, according to BCG analysis.

Build New Sustainable Businesses

Companies have a major opportunity to unlock new sources of growth, particularly in relation to the trillions of dollars that the public and private sectors will be investing every year to drive the global economy to net zero carbon emissions. They should look for places in those new markets where they have unique advantages, and create new offerings and business models to leverage those advantages.

Digital tools and technology will be critical in building new businesses and helping companies create solutions that fulfill customer needs in new ways. For example, Norwegian mobile operator Telenor partnered with microfinance bank Tameer (with additional support from the Bill and Melinda Gates Foundation, the International Finance Corporation, and the Consultative Group to Assist the Poor) to launch a mobile-based financial services platform for unbanked and underbanked consumers in Pakistan. By the end of 2019, the operation had become the largest branchless banking service in Pakistan, with 6.4 million users. Companies also have an opportunity to invest in deep-tech innovation , including in artificial intelligence (AI), synthetic biology, nanotechnologies, and quantum computing—to generate and commercialize breakthroughs in areas such as decarbonization .

In addition, companies that embrace sustainable business model innovation can help transform entire value chains and ecosystems. They can, for example, introduce new circular business models to reshape the whole product usage cycle. And they can create new business models or make investments in ventures that address the looming scarcity of critical sustainability inputs . Consider recycled plastic. Some 45% of demand for recycled polyethylene terephthalate will be unmet by 2025, according to BCG analysis. Already, a number of companies are investing in innovation to address the gap, including through investments in R&D and recycling infrastructure.

Make the Core Sustainable

Companies that aim to become sustainability leaders must assess and enhance the sustainability of their existing portfolio and operations.

In supply chains , for example, they have an opportunity to create end-to-end transparency, from sourcing through distribution. New tools and technologies are critical in this area. AI can help companies monitor, predict, and reduce their carbon emissions . At the same time, companies can engage suppliers to impose standards, track and improve their performance, and push the ecosystem in which they operate toward greater sustainability. Companies should also re-engineer product designs to make existing products sustainable. This may involve reformulating products with more sustainable ingredients, reducing packaging, and developing refillable products or concentrated versions that reduce weight (and therefore carbon emissions tied to transportation), water consumption, and packaging. Beyond Meat, for example, leveraged plant-based proteins to re-engineer one of the world’s most famous dishes—the burger. That innovation not only launched a popular new alternative to meat, but also helped fuel one of the most successful IPOs of 2019.

Build Capabilities

Companies that want to drive a sustainability transformation must ensure they have the right capabilities and foundation in place to succeed.

First, they must design robust governance of sustainability efforts, both at the board level and within the company itself, including accountability and incentives linked to ESG targets. Second, they need to develop strong, granular data capabilities and robust ESG reporting processes to enable the business to direct and adjust efforts on the basis of real-time performance data and to meet increasingly stringent regulatory reporting standards. Third, they should build new partnerships that allow them to pool resources, combine expertise, co-invest in ways that minimize risks associated with high-fixed-cost investments, and deliver sustainable outcomes at scale more quickly. Fourth, they must embed sustainable business model innovation in the organization.

This last element is particularly critical. Companies will need to continue to adapt their operations, product portfolio, and business models as the bar for sustainability inevitably rises over time. What qualifies as leading performance in carbon footprint or equitable business practices today, for example, will likely be table stakes in the future. As a result, companies must embrace an “always-on” mentality toward innovating in sustainability. The process of driving sustainable business model innovation will be central to that mentality, allowing companies to assess the degree to which their current business models create positive environmental and societal impacts and to improve that performance over time.

Own the Narrative, and Engage Investors and Stakeholders

Leading companies must create a compelling and distinctive narrative around their sustainability strategy —one that connects and amplifies their purpose. At the same time, they can own their sustainability story in the public markets and share that story in a way that resonates with investors, rather than letting ratings agencies and investors tell their story for them. This means going beyond sharing the relevant information with rating agencies, and instead going directly to investors with an effective narrative that includes four key elements:

  • A well-defined point of view about what is most material to the business
  • A clear connection to purpose and an overall sustainability strategy
  • Targets, milestones, and initiatives to get there
  • Robust measurement and disclosure of ESG performance

The measurement and disclosure component is particularly critical, as it will provide evidence to investors that the business is hardwiring the narrative into the organization. Companies should go beyond the annual or biannual reporting cycle and instead provide real-time ESG measurement and reporting mechanisms that increase investors’ confidence in the company’s ability to monitor progress and correct course. Companies can also use ESG measurement to establish clear incentives and accountability mechanisms for employees and leaders.

As companies share their narrative with investors, they should proactively engage with shareholders, and they should do so not just during the release of quarterly earnings. In particular, they should maintain a strong dialogue with active investors who, unlike ETF or index investors, may move in and out of the stock over time. They should also share the narrative with other critical stakeholders, including customers, employees, and members of communities in which they operate. The buy-in of these stakeholders is ultimately what drives value creation.

Driving a successful sustainability transformation requires a fundamental shift in mindset. Company leaders should view the push toward sustainability not as a compliance exercise or a cost of doing business, but rather as an opportunity to create new value. Companies that do so will expand their competitive advantage and develop the muscle to continue to rethink and remake their business as expectations about sustainability inexorably rise in the years ahead.

The authors would like to thank Fanny Berthaud for her assistance in the development of this article.

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Senior Managing Director and Partner and Social Impact Global Lead

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Managing Director & Senior Partner

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Senior Advisor

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Managing Director & Senior Partner, BCG Henderson Institute Fellow

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ABOUT BOSTON CONSULTING GROUP

Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. BCG was the pioneer in business strategy when it was founded in 1963. Today, we work closely with clients to embrace a transformational approach aimed at benefiting all stakeholders—empowering organizations to grow, build sustainable competitive advantage, and drive positive societal impact.

Our diverse, global teams bring deep industry and functional expertise and a range of perspectives that question the status quo and spark change. BCG delivers solutions through leading-edge management consulting, technology and design, and corporate and digital ventures. We work in a uniquely collaborative model across the firm and throughout all levels of the client organization, fueled by the goal of helping our clients thrive and enabling them to make the world a better place.

© Boston Consulting Group 2024. All rights reserved.

For information or permission to reprint, please contact BCG at [email protected] . To find the latest BCG content and register to receive e-alerts on this topic or others, please visit bcg.com . Follow Boston Consulting Group on Facebook and X (formerly Twitter) .

Perspectives on Strategy and Value: Insights on creating sustainable value in an uncertain world.

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Developing a Corporate Sustainability Plan: Small Businesses

March 15, 2021 

implementing sustainable business plan

Corporate sustainability consists of three pillars: environmental, social, and economic. Each business is responsible for creating a sustainability plan that acknowledges all three. In addition to protecting the environment, sustainability measures can help small businesses gain favor with consumers by demonstrating social responsibility and business ethics. Sustainable practices also positively impact a company’s bottom line by reducing resource waste and improving productivity.

To learn more, check out the infographic below, created by Maryville University’s online Bachelor of Science in Sustainability .

Information on how small businesses can develop a corporate sustainability plan.

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The three pillars of corporate sustainability.

Corporate sustainability incorporates intentional business practices in three societal areas, with the goal of providing stakeholder value without compromising the environment, people, or the economy.

The Environmental Pillar

Businesses should work to limit their impact on the environment by reducing their carbon footprint, minimizing waste from packaging, and efficiently using water. By tracking the use of resources by benchmarking — or measuring resource consumption against a set standard — businesses can see and understand their spending and plan for the future.

The Social Pillar

Businesses need to maintain their social license — their ongoing acceptance by employees, stakeholders, and the public. A business can ensure it has a good reputation through several means, including treating employees well and engaging the community. It can also promote sustainable practices and make responsible supply chain decisions, publicly displaying its commitment to sustainability.

The Economic Pillar

Businesses should consider the benefits of displaying a commitment to sustainability, including improved profitability through sustainable practices. They can benefit from aligning resource spending practices with the company’s values, listening to employees’ insight about possible process improvements, and involving customers in planning sustainable practices.

Businesses also need to be transparent with investors to gain their trust. This can include maintaining compliance with regulatory requirements; avoiding hiring board members who may have a conflict of interest; avoiding the exchange of political contributions for favors; and avoiding using inaccurate, or opaque, accounting methods.

Actionable Practices in Corporate Sustainability

Companies can easily put into action a number of sustainability practices.

The Triple Bottom Line

The triple bottom line expands a company’s bottom line to consider not just profits but also people and the planet. A business that models its operating plans on the triple bottom line examines risks and opportunities to create a profitable sustainability plan. Risks include inefficiently wasting resources on packaging and hurting the environment, as well as inefficiently managing energy and creating a larger carbon footprint. Opportunities include looking for more sustainable materials in wider supply markets to reduce waste and installing energy-efficient appliances to lower long-term utility costs.

Employee Incentive Programs

These programs help involve employees in a business’s sustainability efforts. Incentives can include rewards for carpooling, biking, and taking public transit, as well as telecommuting options. In-office incentives could involve reusable supplies, such as washable cups to minimize plastic water bottle usage and rewards for lessening an office’s waste.

Corporate Sustainability Plan

More small businesses are realizing the benefit of creating an official sustainability plan. Creating a sustainability plan entails five key steps. The first step involves learning about sustainability. Next, companies should assess business areas that can be improved. Then, they should find opportunities for change. Finally, businesses should enact the changes that will make their operations more sustainable.

The Global Reporting Initiative’s Guidelines    

The Global Reporting Initiative provides businesses with the tools to create a standardized sustainability report. Tools such as downloadable, editable forms and training make reporting simple. Reporting shows a business’s dedication to transparency and sustainability.

Short and Long-Term Benefits of Corporate Sustainability

Consumers and employees want to support responsible businesses. Businesses with better environmental and social responsibility can reduce employee turnover by 25% to 30%. Some 47% of consumers want to buy from environmentally conscious businesses. Additionally, 58% of Generation Z consumers want eco-friendly packaging, and 57% want environmentally sustainable products.

Benefits      

Sustainability leads to lower costs, better operational efficiency, and better stock price performance. The assets under management that use sustainable investing strategies amounted to $12 trillion at the start of 2018 and grew to $17 trillion by the start of 2020, a 42% increase. Being energy efficient and using responsible packaging saves money and makes resources last longer, lowering costs. For example, a hotel can reduce its energy costs by 25% by asking guests to forgo daily sheet changes. This also reduces the replacement rate of the sheets, lowering both expenses and waste.

Business leaders might worry about a lack of resources and the cost, but sustainability can be implemented in small steps, removing a large overhead. The Global Reporting Initiative and other resources can help them understand the process of implementing sustainable practices. Business leaders might worry about long-term benefits, but stockholders, investors, and consumers support sustainable efforts.

Corporate sustainability should be a priority for all businesses. Small businesses that focus on implementing sustainable practices will gain and maintain a loyal customer base. Stockholders and investors prefer to support businesses that practice sustainability. Small businesses should consider a sustainability plan’s long-term benefits when creating a business strategy.

Accenture, 2019 Annual Holiday Local Shopping Survey

Business News Daily, “Your Small Business Needs a Corporate Social Responsibility Report”

Cape Farewell Foundation, “How to Bring Sustainability to Your Small Business While Maintaining Profits”

Constellation, “How to Develop a Small Business Sustainability Plan”

Cultivating Capital, “The Small Business Guide to Sustainable Business Practices”

Cultivating Capital, “10 Surprising Areas Missed in Small Business Sustainability Programs”

Cultivating Capital, “Three Excellent Employee Engagement Strategies for Sustainability”

Eco-Business, “The SME’s Guide to Benefitting from Sustainability”

Emarketer, “Sustainability Is Factoring into 2019 Holiday Shopping”

Global Reporting, The Global Standards for Sustainability Reporting

GreenBiz, Sustainability

Harvard Business Review , “The Comprehensive Business Case for Sustainability”

Investopedia, “The Three Pillars of Corporate Sustainability”

Investopedia, “Triple Bottom Line”

Kearney, “How Gen Z’s Concern with Emotional Health Fuels Retail Growth and Failure”

L.A. Times , “How Nestle, Google and Other Businesses Make Money by Going Green”

Sumas, “Unpacking the Business Case for Sustainability”

Sustainability Knowledge Group, “The Importance of SMEs Role in Achieving Sustainable Development”

US|SIF, “The US SIF Foundation’s Biennial ‘Trends Report’ Finds That Sustainable Investing Assets Reach $17.1 Trillion”

Unboxed Technology, “Corporate Sustainability vs. CSR: What’s the Difference?”

You Matter, “Should SMBs Have a CSR or Sustainability Strategy? How Can They Create It?”

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What Does "Sustainability" Mean in Business?

Sustainability

  • 10 Oct 2018

A growing number of organizations are integrating sustainability into their business strategy —realizing they can do well by doing good. In a recent McKinsey survey , 70 percent of respondents said their companies have a formal governance of sustainability in place. But what exactly does it mean to be “sustainable” in business?

In business, sustainability refers to doing business without negatively impacting the environment, community, or society as a whole.

Sustainability in business generally addresses two main categories:

  • The effect business has on the environment
  • The effect business has on society

The goal of a sustainable business strategy is to make a positive impact on at least one of those areas. When companies fail to assume responsibility, the opposite can happen, leading to issues like environmental degradation, inequality, and social injustice.

Sustainable businesses consider a wide array of environmental, economic, and social factors when making business decisions. These organizations monitor the impact of their operations to ensure that short-term profits don’t turn into long-term liabilities.

Examples of Sustainability in Business

Many successful organizations participate in sustainable business practices, however, no two strategies are exactly the same.

Sustainable business strategies are unique to each organization as they tie into larger business goals and organizational values. For instance, sustainability in business can mean:

  • Using sustainable materials in the manufacturing process
  • Optimizing supply chains to reduce greenhouse gas emissions
  • Relying on renewable energy sources to power facilities
  • Sponsoring education funds for youth in the local community

Why Is Sustainability Important?

Beyond helping curb global challenges, sustainability can drive business success . Several investors today use environmental, social, and governance (ESG) metrics to analyze an organization’s ethical impact and sustainability practices. Investors examine factors such as a company’s carbon footprint, water usage, community development efforts, and board diversity.

Research shows that companies with high ESG ratings have a lower cost of debt and equity, and that sustainability initiatives can help improve financial performance while fostering public support. According to McKinsey , the strongest motivating factors to adopting a sustainable mindset in 2017 were to align with a company’s goals, missions, or values; build, maintain, or improve reputation; meet customer’s expectations; and develop new growth opportunities.

The shared value opportunity Venn diagram showing do well on the left and do good on the right

The overlap between social and environmental progress and financial gain is called the shared value opportunity . In other words, “doing good” can have a direct impact on your company’s ability to “do well.” Due to this opportunity, it’s clear why many businesses have adopted these practices. Find out how to make your business more sustainable by following these four steps to align your strategy and mission to create shared value.

How to Create a More Sustainable Business Strategy

There are several ways you can go about transforming your organization’s purpose into performance. Here are a few steps to follow to create a more sustainable business strategy .

1. Assess the Problem and Define Objectives

The first step to driving change is assessing what sustainability means to your team, company, industry, and client. Consider the big problems each of these groups thinks is a priority.

To guide this process, consider asking questions, such as:

  • How much waste is the organization creating?
  • Is our company culture struggling?
  • Are our hiring practices attracting diverse job candidates?
  • Is our product targeted to help a certain audience?
  • What impact does our company have on the local community?

Answering these types of questions will help you establish your company’s sustainability objectives.

  • Quick Tip: Need help defining your sustainability objectives? Take the SMART goals approach as you move through these steps. Making sure your goals are “SMART”—specific, measurable, achievable, relevant, and time-bound—in this early stage can save you time in the future.

2. Establish Your Mission

Once you’ve agreed on concrete objectives, you’re ready to define your company’s mission. A distinct mission statement is an important part of becoming a more sustainable business.

An effective mission statement outlines your company’s focus on “doing.” It should capture your organization’s values and purpose and serve as a guiding light of why you do what you do. In other words, your mission statement should define your company’s five Ws: who, what, when, where, and why.

Here are two examples of companies with effective mission statements:

  • Eyewear brand Warby Parker’ s mission is “to offer designer eyewear at a revolutionary price, while leading the way for socially conscious businesses.”
  • Build the best product
  • Cause no unnecessary harm
  • Use business to protect nature
  • Do not be bound by convention

In each, it’s clear what the company’s values are and how they’re executing against them.

  • Quick Tip: Consider how your mission statement will grow as your company scales. A mission statement should help a business evolve with the market , not hinder internal capabilities to innovate and disrupt. For this reason, make sure your objectives can be extrapolated from your mission statement.

3. Craft Your Strategy

Once you’ve created a strong mission statement, you’re ready to realign your organization with a sustainable business strategy .

In crafting a sustainable business strategy, it’s important to ensure your company remains profitable. You can’t help your cause if you can’t stay in business. As proven, your sustainability efforts may help you become more profitable.

Consider the triple bottom line , which refers to how a company’s actions impact profit , people , and the planet . With this framework in mind, you can develop a sustainable business strategy that's also profitable.

Small changes can be the starting point for large-scale impact. For instance, does your company typically leave the electricity and heat on overnight, even when there are no employees on site? Imagine how much savings could be realized, in both cost and energy resources, if the last person in the office shut them off, or if you used a timer or motion sensor to automatically turn them off after the last person left.

What about the consumers willing to pay more for a sustainably produced product? A Unilever study found that 33 percent of consumers want to buy from brands “doing social or environmental good,” creating an opportunity in the market for sustainable goods.

Explore industry-specific strategies that can increase your operational efficiency while driving social and internal value. Putting in the work to build a robust sustainability strategy can help both your company and the environment in the long term.

  • Quick Tip: Need a starting point for crafting your strategy? Consider internal and external opportunities to create value around your mission. Ask your team questions like, “Will our customers pay more for our product if we produce it more sustainably?” or “Can an enhanced business process decrease our emissions?” If the answer to either of those questions is “yes,” you may have the beginnings of your strategy, while simultaneously increasing your productivity and profit.

4. Implement Strategy and Assess Results

It’s one thing to talk about a newfound motivation to do well and do good, but it’s another to take a public stance, pledge quantifiable results, and actually achieve them. With your mission and strategy solidified, you’re ready to make strides toward reaching your objectives.

As you’re implementing your strategy , remember to revisit your process periodically to assure your objectives, mission, and progress remain aligned.

  • Quick Tip: Unsure of where to start? Ask yourself if there are any areas where your mission can quickly have a great impact. Consider partnering with an organization that has a similar mission to yours. Aligning your missions can help drive progress fast. Partnering with an established player can also enhance your credibility.

Sustainable Business Strategy | Unite Profit and Purpose | Learn More

Sustainable Business for a Greater Impact

You’re now equipped with four simple steps—from purpose to performance—that can help you create a more sustainable business.

When objectives become a purpose, a powerful story is established. That story will drive your mission and allow you to create an actionable plan. Don’t worry if results don’t come immediately; the road to 100 percent sustainability is long and may require testing a few different approaches for you to make the greatest impact.

Are you interested in learning more about how to turn purpose into profit and create business models that drive change? Explore our online course Sustainable Business Strategy .

This post was updated on January 21, 2022 . It was originally published on October 10, 2018.

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About the Author

5 Impactful Sustainable Business Practices

January 17, 2023

by Lee Shields

sustainable business practices

In this post

What are sustainable business practices , factors that drive sustainable business practices, 5 sustainable business practices to get started .

Sustainability is no longer a choice; it's a necessity.

Social developments have flourished over the last 100 years, but the planet's health has constantly declined. Global temperatures have risen dramatically, and there's a need for action to avoid the worst impacts of climate change.

Companies are now making a concerted effort to implement environmental engineering and sustainable business practices to reduce their carbon footprint. The fight against climate change starts with small steps that can make a huge impact. Let's look at what your business can do to make a difference.

Sustainable business practices refer to the strategies and processes that businesses use to reduce environmental impact, increase positive social impact, and create long-term value for their stakeholders. These practices seek to minimize waste, conserve resources, and reduce emissions.

Sustainable businesses focus on creating value for all stakeholders, including customers, employees, suppliers, communities, and the environment. 

IBM describes sustainability as a company's strategy for reducing the environmental impact in its industry. A clear and concise plan for your brand's eco-friendly endeavors keeps your team striving toward a common goal. 

But how can your company contribute? Whether you're an SME, start-up, or enterprise, following best practices in social, environmental, and economic areas can be the beginning of a greener tomorrow. You can ditch plastic packaging, encourage cycling to work, or even nurture a positive atmosphere in the office – start with what works for you and your team.

An issue for some is figuring out where to start. It's easy to look at the pollution caused by big corporations and feel helpless. But, if you create an environment that makes people see sustainability as possible, they'll demand it from their favorite brands. If larger companies see consumers making more eco-friendly purchases, they will optimize their processes keeping environmental and social impact in mind.

Environmental, social, and governance (ESG) investing

Conscious investors consider environmental, social, and governance (ESG) standards to evaluate if a brand is worth putting their money behind. Think Shark Tank for sustainable businesses. 

When you think of sustainable business practices, the first thought that comes to mind is that changes cost money – and with good reason. Those fighting climate change or creating a more eco-friendly brand aren't always concerned about the bottom line.

But applying your business acumen to carbon-fighting concepts is a recipe for success. Engagement, teamwork, commitment, clarity, and strategy are all transferable skills for sustainable practices.

Environmental considers how a business protects the environment. Social looks at how a company treats its team, customers, suppliers, and communities. Governance is related to leadership and shareholder rights. Investors can set their own standards, but these three areas sway the decision of where exchange-traded funds (ETFs) will go. 

As a famous comic book hero’s uncle once said, "With great power comes great responsibility." A new wave of investors is more willing to put their money where their mouth is and back their values – supporting a business following its ESG criteria funds initiatives that can have a lasting impact. According to Morningstar , $142 billion was invested into sustainable funds globally in the final quarter of 2021, a 12% increase over Q3. 

With SMEs making up the majority of businesses around the globe, they must take advantage of ESGs as soon as possible. By leveraging sustainable business practices from the outset, an indie business can position itself for ESG investment. 

EY's Global Private Equity Survey showed that two-thirds of investors consider ESG factors when considering companies to back. Investors coming from more prominent firms may already have to comply with environmentally friendly practices or adhere to a green policy. SMEs they invest in should share similar values and sustainable strategies. 

It's more than the bottom line

The real value of ESG criteria is striving toward a better planet. Yes, SMEs can benefit from outside investment, but encouraging companies to make a real and lasting change will outweigh any profit. 

How you operate in and outside of your business affects who you are as a brand. Being perceived as a sustainable company to attract your target audience can help your bottom line, but the environment's health should be at the heart of your efforts. Getting caught up in producing reports that would entice ESG investors isn't going to stop global warming, but the procedures inside can help make a positive impact. 

Ninety percent of the world's largest companies now produce corporate social responsibility (CSR) reports. On paper, that sounds great – what's not to love about conscious reporting? The issue is only a tiny amount are validated by third parties.

By self-reporting data that isn't verified, some figures may be stretched and not make the necessary impact to reduce CO2 emissions. ESG investment may come knocking, but are you really operating a sustainable model?

You don't have to be an eco-friendly or green business to be sustainable – every company, large or small, has a role to play. 

Small steps lead to big changes 

Reaching for Net Zero is something that businesses around the globe are striving for, but what is it? According to EPA , Net Zero requires using only as much energy as produced, maintaining a sustainable balance between water availability and demand, and getting rid of waste sent to landfills. The United Nations hopes to achieve Net Zero by 2050; every effort by your business helps to make that happen. 

Ambitious goals can seem impossible when you're at the beginning. How larger companies operate needs a sustainable overhaul, but Rome wasn't built in a day. One small business can't change how every multinational company behaves, but collectively demanding more can. By insisting on sustainable products from supply chains, larger companies will eventually have to change. 

The same goes for your own business. A small used car salesperson doesn’t have to suddenly restructure their model to sell electric vehicles. Implementing small changes has a ripple effect that leads to significant results.

Something as simple as moving to a paperless online calendar system can be a tiny step to becoming a more sustainable business. Removing unnecessary in-person meetings or providing a work-from-home environment can eliminate harmful CO2 emissions caused by commuting. 

The first step is devising and implementing a sustainable business plan, strategy, and practice for your company. By identifying and integrating ESG practices, your business can help fight climate change and improve its brand image at the same time.

Improving where you can is the first step

The $142 billion-dollar question is, where do you start? With sustainability at the forefront of many business strategies, finding what works for you can take substantial time and effort.

You'll find a barrage of products, tips, goals, and don'ts from leading publications and companies.

But where do you being?

By identifying what is achievable – just getting started is half the battle. You don't need to know it all or even get it right initially. Implement sustainable business practices that your team can follow, and you can adapt them as needed. Find out what works for you through trial and error – aim for what motivates you.

Going green can have many motivating factors. There are obvious positives, like reducing your carbon footprint and ethically sourcing supplies, but it has a lasting impact both internally and externally. Here are some driving factors you may have yet to consider.

Internal drivers:

  • Organizational benefits: You could see improved working conditions, safety, and efficiency. 
  • Financial benefits: Although helping the planet is the primary goal, you get tax incentives, government grants, and the previously mentioned ESG investors. 
  • People benefits: Your team can take inspiration from the initiatives at work and apply them to their personal lives. By creating a sustainable environment, you're more likely to see improved ethical behavior from employees.

External drivers:

  • Commercial benefits: Going green can also help you market yourself as such and appeal to consumers who care about sustainability. 
  • Environmental benefits: The UN has targeted Net Zero. You can reduce your carbon emissions, help the planet, and provide a more sustainable future for the next generation.
  • Communications benefits: Your eco-friendly image can make a lasting impression on potential customers and suppliers.

The pushback on creating a more sustainable business model usually comes down to cost. Companies fear that ethically sourcing supplies, adopting greener energy, or managing waste correctly could infer higher expenditure. But as access to all these factors has evolved, it has never been easier or more beneficial for an SME to go green.

Why are customers choosing green brands?

First Insight report that 62% of Generation Z and Millenials prefer to buy from sustainable brands. They’re also more likely to spend and purchase based on company values. 

A new generation of consumers has arrived and is more conscious of what they buy and who the seller is. In today's climate, positioning your brand as eco-friendly and highlighting your values is an effective way of connecting with modern customers. 

Consumers want to help the environment. They care about the working conditions of those who manufacture their favorite products. Being seen to make a difference has taken center stage. People are fearless in calling out brands online and on social media that need to make an effort to be more sustainable and save the environment. 

Customers want to highlight that they’re shopping ethically in the online sphere. Those conscious of sustainability or the environment can form tribes and purchase similar brands. 

Brands with similar values can open doors to different audiences. For example, Casetify partnered with The Earth Day network to design the first 100% compostable and biodegradable phone case. Marketing themselves as a greener company brought in a more eco-friendly consumer base for Earth Day.

Shoppers are naturally more conscious these days. But some sustainable have also played a part in spreading the word about conscious business and environmental protection.

Businesses need consumers to make a purchase that justifies their product. For example, a dishwasher tablet that reduces water usage in dishwashers by 20% requires the user to set their machine to 'eco-mode' 

Sourcing supplies from Fair Trade vendors means they need socially conscious customers willing to spend on their sustainable product. Consumers may be more mindful, but businesses must provide them with that platform to shop ethically.

Defining your brand is the first step. What is your mission; why do you want to be more sustainable? By having clear intent and achievable goals, you can lay out a strategy that your whole team can follow. You don't have to become a green brand overnight, but you can always work toward it. Sustainability doesn't define your business but implementing the practices certainly makes a difference. 

The changes you make in your business now will impact the future. Although instilling eco-friendly practices may prove challenging initially, you will reap the rewards faster than you think. 

Let's look at five thoughtful and impactful sustainable business practices that are a good starting point to transform your company.

1. Operate from a work-from-home/hybrid model 

Working from home has become a more viable option for employees in the past few years. With online migration, Green Journal reports that working from your home office four days a week can reduce nitrogen dioxide emissions by around 10%.

Travel has become far less commonplace with growing technologies in the online office. Giving your team the option to work from home or even a hybrid model benefits them and the planet. 

Companies can easily adopt a virtual approach that helps their team stay connected while building their customer base. For example, webinars are an excellent tool for reaching a global audience . In addition to collaborating with your team, you can use them to give a platform to industry leaders and connect with new leads. 

Naturally, in-person meetings, office days, and gatherings are still crucial for people socially. The key is to suit your model to your business – what works for an online marketing firm may not suit those operating a medical practice. 

Tips for a home office

Working from home has benefits, but it comes with unique challenges. Creating the right environment in your home can help separate your work and leisure life.

Here are some tips to help:

  • Communicate with your team regularly.
  • Layout boundaries with anyone at home with you during office hours.
  • Have a separate space. It doesn't have to be a different room, but once work is finished, it's out of sight and mind. 
  • Take breaks and make sure to move.
  • Interact with other people (outside!).
  • Prepare your lunch the night before.
  • Clearly define your finish time.
  • Talk to your employer.

Working from home can positively impact the environment without negatively impacting the person.

2. Go paperless

Going paperless is a simple practice to cut down on unnecessary waste. A quick win can boost morale and motivate your team to pursue larger environmentally friendly endeavors. 

U.S. offices use 12.1 trillion sheets of paper annually. The average office worker uses 10,000 sheets per year. Nowadays, you can switch most uses for paper in an office to online; it's waste that you can easily cut out. 

Trees are a vital part of our ecosystem. They store carbon dioxide through photosynthesis, helping reduce the gas emitted into our atmosphere. An excessive amount of CO2 causes the planet's temperature to rise, causing global warming. 

To mitigate the use of paper in your office, you can:

  • Switch to an online calendar system
  • Use a cloud storage system
  • Remove printers
  • Scan and email documents
  • Digitally sign documents
  • Email invoices and receipts
  • Adopt digital business cards
  • Use digital notes
  • Invest in paperless marketing
  • Provide reusable coffee cups

3. Partner with nonprofit organizations and charities

Companies interested in adopting sustainable practices often need to figure out where to start. The intent and desire are there, but an organization can lose steam without a clear plan. It needs to be efficient and balanced with action. 

Building an eco-friendly model from scratch can be both time-consuming and expensive. An option is to create a new team to handle sustainable initiatives with designated employees, but this can lead to stagnation without direction. This doesn't mean you should stray from this option; you just need to connect with the right people.

Partnering with a nonprofit organization or charity that aligns with your sustainability goals can aid in defining your own path. Several organizations have the resources and knowledge to assist you in the initial phases of your sustainable journey. They're not there to do the job for you or outline your mission but can offer a supporting hand in getting started. 

It's a two-way street. Donating or using your platform to promote your company can highlight how your brand fights climate change. By offering a percentage of your profits to fund their efforts, you'll be aligned with their mission, and consumers will know of your eco-friendly efforts.

of customers would choose brands that have environmentally sustainable practices

Source: Deloitte

Partnering with non-governmental organizations or nonprofits has a lasting impact on your brand and the planet. For example, Patagonia and Dr. Bronner's partnered with the Rodale Institute to form Regenerative Organic Alliance , which aims to fight climate change by reabsorbing carbon into the soil. 

Washing brand Ariel teamed up with WWF to reduceCO2 footprint. When Ariel hit 1 million pledges through their social media campaign #WashColdChallenge, they donated £100,000 to support WWF's climate work. Ariel benefitted from green marketing, while WWF received funding for their cause.

Who should you reach out to?

That depends on what your goals are. For SMEs, finding local initiatives that impact your community might be best. If you're looking on a much larger scale, partnering with organizations that reflect your mission and what your sustainable journey means to you is vital.

4. Educate your team on best practices

Give a person a fish, and you feed them for a day; teach a person to fish, and you feed them for a lifetime. Devising and implementing a sustainable strategy will only work if your team is appropriately educated and trained.

How could you expect your plan to be followed if you read from different sheets? By educating your staff, you're ensuring that they execute your sustainable business practices flawlessly. 

Set up and delegate initiatives to different team members. If they feel heavily involved and hold responsibility, they’re more likely to abide by your strategy daily. Have workshops and seminars on how to separate recycling properly or what to look for when buying sustainable supplies. 

You could also bring in a guest speaker to highlight how carbon footprint is measured and what you can do to lower it. That way, your team will be up-to-date on the latest procedures and how to implement and follow them. 

You can also set up green practice panels to give team members autonomy and construct their own sustainable ideals. Extend it company-wide through webinars. Team members can bring their practices home, and the spread of sustainability will far exceed your business walls. 

5. Become energy efficient

Providing energy to an office space can be costly, especially in the current climate. Thirty percent of energy is wasted in commercial, manufacturing, and educational buildings. Businesses can lower their expenses and emissions by reducing energy usage and becoming more efficient. It's a straightforward win for you and the planet.

By using alternative methods, SMEs can save 18 to 25% on energy bills. Designating a team to monitor heating, lighting, and equipment can ensure your space runs optimally. You could partner with an external organization to implement a more sustainable and optimized energy model in your workplace. 

Simple fixes could be changing all lights to LEDs, turning off heating in empty rooms, using daylight, and switching off unnecessary equipment. Alternatively, you could try out office sharing and reduce emissions by using co-working spaces.

Act now to fight climate change

Regardless of your business type, you have a role to play in fighting climate change. With a more significant push for Net Zero, you have a unique challenge to care for the planet for future generations.

Adopting more sustainable business practices are simple ways to make a lasting impact. By transforming your organization, you could see outside investment, better brand recognition, and even become a leader in your community for fighting climate change. Small steps can lead to tremendous results. 

There is no one size fits all approach, and the outlined practices are recommendations for what you could do. Get started, share ideas, include your team in the strategy and see what works for you. Through trial and error, you can customize and set goals in striving for a better planet. Companies are in it together and working toward fighting climate change. 

The future begins now; what you put in place now will benefit you now and in the future. Soon those small steps will become commonplace, and you’ll give the next generation something to build on. That first action can lead to a more sustainable future.

Sustainability and technology go hand in hand. Learn how generative designs are revolutionizing the design industry while making manufacturing and design more sustainable.

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Less waste; optimized production systems

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Lee Shields is a Content Associate at Setmore – a free online scheduling platform that helps you connect better with your customers.

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How to Write a Sustainable Business Plan

Sustainability can’t be a small add-on that is tacked to the end of a company’s business plan, but rather sustainability must be embedded within its core.

Many questions are answered in a business plan that entrepreneurs often don’t consider.  In a sustainable business plan we ensure we not only answer those questions, but we ask if they reflect a company’s commitment to the environment, community, and team.

By the end of this article you’ll be equipped to write a sustainable business plan for your startup.  One that answers all the conventional questions of a business plan while considering your enterprises carbon footprint, community impact, and measure of employee-equity.

Why Write a Sustainable Business Plan?

According to a survey conducted by Lloyds Bank, 64% of small-medium sized business owners want to improve their environmental sustainability, with economic savings being the main motivation for doing so.

In another study by Futerra, 88% of consumers said they wanted to support brands that had a positive environmental and social impact.

Sustainability isn’t coming, it’s here.

You have two options: write a conventional business plan and tack on sustainable initiatives when you realize the business case for it down the road, or to embed sustainability into your startup from day one – getting further ahead of your competition each day out.

  • Executive Summary

Your executive summary should hit all the same points a conventional business plan would.  If you’ve never written an executive summary before it’s essentially an introduction to your business plan, outlining a key point from each section, but without giving everything away.

Let’s get something clear: a sustainable business plan is different then a sustainability plan or strategy.  A sustainability plan or sustainability strategy outlines an organization’s commitment to the local environment, community, supply-chain and their staff.

Whereas a sustainable business plan is a business plan with sustainability at the core of its operations; therefore, you need to answer the same questions in how you plan to make money, who your target audience is, why your management team is uniquely qualified and how much capital you require.

The point I’m trying to make is your executive summary shouldn’t outline how sustainable you’re going to be, but rather how your business is going to be successful.  In this article we’ll equip you with the resources to ensure your path to success has sustainability worked into each and every move.

  • Mission Statement

Your mission statement is something your sustainable company wants to achieve in the now.  I have a perfect example, ours!

Bsbcon Mission Statetement:

“Our mission is to support sustainable brands in mitigating climate change, and building vibrant communities.”

So, is a mission statement something you can achieve in a year or two and then change?  Well, it’s not supposed to be.  A mission statement should be an ongoing pursuit that you service by developing more efficient products and services.

vision for a sustainable business plan

  • Vision Statement

A vision statement is the effect your mission will have on the environment, community or society itself.  When developing a vision statement you should consider the world you want your business to help create.

Bsbcon Vision Statetement:

“Our vision is a sustainable global economy.”

By supporting sustainable brands in mitigating climate change, and building vibrant communities, we hope to develop a sustainable global economy.  Let’s discuss if that’s realistic – first off, it’s certainly ambitious.  Whether it’s achievable or not?  Absolutely!  Engaging one business at a time, and it’s certainly attainable.

  • Industry Analysis

Ok, let’s zoom out for a minute.  If you’re developing a sustainable business plan and your industry is in coal mining then you need to reassess.  The industry of a sustainable business plan has to be one that makes this world a better place, which can be in nearly any industry.

Much like in a conventional business you will want to address the market size, growth rate, lifecycle, barriers to entry, and three closest competitors.

We say your three closest competitors because it’s not always about the three leading companies.  It’s more about the three company’s whose business models are the closest to yours.  This could mean that sustainability is a core part of their operations, or not, it really all depends.

If your three closest competitors have integrated sustainable practices into their brands, then it’s essential that you treat this like you would a standard competitor analysis.  Seeing where there are opportunities for your company to differentiate itself, and where there’s a chance to learn from the initiatives they have in place.

  • Problem and Solution

Lets dissect whether a sustainable company can solve a problem that is purely market driven, rather than market and sustainability focused.

For example, Sara wants to create a business that will develop a new type of hand tool to work on cell phones.  It’s a fantastic business concept which has been proven with market research.  Can Sara create a sustainable business that solves a problem which is purely market driven?

Of course, she can.

Sara can ensure her staff are paid livable wages and given fair equity, that her supply-chain is made of other sustainable companies, that her organization recycles and takes the environment into consideration, and that her company is involved in community organizations.

The problem and solution of a sustainable business can be market driven, as long as sustainability is developed into the actual functions of the company.  We’re just about to get to that.

  • Products and Services

When we discuss the products and services of a sustainable business we consider the vendors that the business utilizes to source their base materials and services, also known as their “supply-chain”.

Sadly, a theme we’re seeing more and more are multinational companies developing service contracts that require their products to be bought and sold up to two times before reaching them.  Ensuring that the original source of the product is left behind, allowing middle companies to take the heat, and sell products to the final company that have been sustainably cleansed.

In all honesty, multinationals are in an ever more challenging position; competition has never been so intense, and they are often having to make important decisions that balance brand position, price-point, and a legitimate choice on sustainability.

Yes, they should have to make these decisions, we’re just clarifying the position they are in.

Now, for a small business it is much easier to develop strategies to ensure a sustainable supply-chain which provides confidence in the longevity of your own products and services.  Here are a few:

  • Draft and enforce a supplier code of conduct that requires suppliers to incorporate sustainability principles into their business processes
  • Choose to source goods and services from social enterprises, local suppliers, or indigenous suppliers, with increasing targets year over year
  • Purchase goods and services that are certified as responsibly produced through internationally recognized certifying bodies. Examples include:
  • Forest Stewardship Council
  • Fair Trade International
  • Rainforest Alliance
  • Marine Stewardship Council
  • Leaping Bunny
  • Canada Organic
  • Global Organic Textiles Standard

sustainable operational business plan

  • Operational Plan

Your operational plan stems from planning itself, which is developed here, and on an ongoing basis from your management team.  Developing a sustainable operational plan considers how efficient you can be on a day to day basis.

For example, is your company driving around in gas-guzzling Ford Excursions, or bicycling, using public transport, and driving electric or fuel efficient vehicles?

Are you working to streamline your operations in every possible way, or have you been using the same system you’ve had for the past 30 years with no consideration for change?

Here are a few more things to consider when developing an operational plan for your sustainable business:

Internal and external sustainability communication planning

Internal communications and awareness-raising:

  • Staff events centred around sustainability
  • Targeted information campaigns for specific initiatives
  • Regular direct communications about changes to sustainability programs
  • Marketing campaigns highlighting sustainability initiatives
  • Sustainably produced products featured in-store & on company websites
  • Pair corporate communications with educational components

Implementing company-wide sustainability policies which are publicly available

Policies could include:

  • General company-wide sustainability policy
  • Purchasing policy
  • Waste management policy
  • Local and Indigenous content policy
  • Diversity and inclusion policy
  • Energy reduction policy
  • Invasive species policy
  • Human Resource Plan

Sustainability should be a part of your human resource plan from day one, when recruiting, where you should work to incorporate sustainability into your employee onboarding process, and train employees in the sustainability components of your business.

From there, you need to look at sustainability from the top down.  You can’t preach sustainability unless your management team understands what that means and exemplifies it every day.  We aren’t saying your management team has to be perfect, what we’re saying is they must understand what sustainability means to their organization.

A great way to facilitate this is by introducing a sustainability consulting firm to your management team and discussing the importance of this topic.  Over the course of weeks or months you should come to a consensus, and develop a plan that is welcomed by your management team.  From there it’s up to your leaders to make sustainability a core principle for your organization.

  • Marketing Plan

Properly executing on a marketing plan for a sustainable company, also known as, “sustainable brand development” is about as sensitive as placing the one hundredth jenga block.

What is the biggest challenge in marketing a sustainable business?

So, called, “greenwashing” painting yourself as sustainable when your company falls short of these assertions.

So, how do you market a sustainable business?

Only publicly marketing something sustainable unless you’re completely confident that you embody every angle of it.

If your business is brand new, take a year or even 18 months before considering any sustainability marketing.  Take this time to develop your own sustainability culture, and initiatives.  Sustainability marketing performs much better when people are organically spreading the word.

sustainable financial business plans

  • Financial Plan

In a sustainable business plan you answer all the standard questions in regards to finances, and more.  The conventional ones being a projected income statement, cash flow, breakeven ratio, startup costs, and compensation summary.

Whereas, for a startup that’s been in business for even six months, you should be able to use parts of that data to develop goals for decreasing emissions, waste, and energy, while aiming to increase the efficiency of the operation.

If your business is a startup that’s at the earliest of days it’s completely fine to have a financial plan that is strictly focused on the financial portion of your business.

With that being said, you will likely be in a position where you could easily choose the regular lights, over the LED ones, or a gas guzzling van over a new electric vehicle.

Just do everything you can to make a fair balance between sustainability, and profitability.  Please remember that these sustainable startup costs may seem like a lot in the first year, but overtime they’re proven to actually increase profits over your competition.

  • Management Team

In order to operate a truly sustainable company you must have integrity.  This means the management team in a sustainable business plan is often made up of individuals that have shown incredible commitment and perseverance in bettering themselves, the people and environment around them.

So many people have a hard time when writing their professional bios.  Questions come up like: What have I accomplished?  Am I truly qualified?  Does it sound like I’m boisting?

Here are some tips on how to write a winning professional bio for your business plan:

  • Be honest about your story
  • State accomplishments that are in some way relevant to this opportunity
  • Don’t be afraid to include non-business related commitments to your community or environment

Sustainable Business Plan Format

BSBCON business plan experts in Vancouver and Toronto.

A sustainable business plan isn’t a business plan with sustainability added on, but rather a business that is developed with sustainability at its core.

You should be able to utilize your sustainable business plan for funding, or attracting mid – upper level management.

Remember, sustainability is not about being perfect, it’s about being on a journey for better.

So, what are you going to choose?  A conventional business plan, or a sustainable business plan?

How can we help you?

Get in touch with us or visit our office

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Creating a Sustainable Business Plan: Tips for Renewable Energy Startups

Creating a sustainable business plan for a renewable energy startup can be a daunting task. In this blog article, we'll provide some tips to help guide you through the process. With these strategies, you'll be able to create an effective, sustainable business plan that will lay the foundation for a successful green energy venture.

In this blog post, you will learn:

  • How to assess your current resources and explore renewable energy options to assess the financial impact of implementing sustainable practices
  • How to evaluate long-term goals, find the right partners and establish environmental standards
  • How to identify potential markets, develop a plan for growth, measure progress and revise goals.

Assessing Your Current Resources

When transitioning to a more sustainable business model, it's important to understand the resources you currently have at your disposal. Take a look at your existing infrastructure, such as energy sources, technology, and people. What can you leverage in order to make the transition easier? Identifying these resources will help you create a more efficient, cost-effective plan.

Exploring Renewable Energy Options

Once you've assessed your current resources, you can start exploring renewable energy options. Consider the type of energy sources available, such as solar, wind, or geothermal. Determine the most cost-effective and efficient option for your business model.

Calculating Financial Impact

It's important to calculate the financial impact of switching to a more sustainable business model. Estimate the costs associated with transitioning to renewable energy sources, as well as any potential savings. This will help you create a more effective transition plan.

Implementing Sustainable Practices

Once you've identified the resources and calculated the financial impact, it's time to start implementing sustainable practices. Create an action plan that outlines the steps you will take to transition to a more sustainable business model. This plan should include specific goals, strategies, and timelines.

Evaluating Long-Term Goals

While transitioning to a more sustainable business model, it's important to evaluate your long-term goals. Consider what you hope to achieve in the short-term and long-term. This will help you identify potential challenges and opportunities, as well as create a more effective plan.

Finding the Right Partners

In order to transition to a more sustainable business model, you may need to find the right partners. Look for companies that have experience in sustainable energy and green practices. This will ensure that you have the right resources and expertise to make the transition successful.

Establishing Environmental Standards

When transitioning to a more sustainable business model, it's important to establish environmental standards. Create a set of standards that will ensure the long-term sustainability of your business model. This will help you ensure that your transition is successful.

Identifying Potential Markets

Once you've established environmental standards, you can start looking for potential markets. What type of customers or clients will benefit from your sustainable business model? Identifying these potential markets will help you create a more effective plan for growth.

Developing a Plan for Growth

Once you've identified potential markets, you can start developing a plan for growth. Estimate how much growth you can expect in the short-term and long-term. This will help you create a more realistic plan for success.

Measuring Progress and Revising Goals

It's important to measure your progress and revise your goals as needed. Track your progress and make adjustments to your plan as needed. This will help you ensure that you are on track to reach your goals. Below we answer common questions entrepreneurs have about these topics.

1. Assessing Your Current Resources

What resources do you currently have available to you.

I started my business with a limited budget and time. I had to quickly find the most effective ways to market my firm. I did that by utilizing my network of friends and family, as well as tapping into free resources I had access to. There are many ways to utilize your network to help your business. For example, I hired my cousin to be a virtual assistant. I asked my uncle to be a marketing consultant. I also used my high school friend to help me with graphic design, and I asked my neighbor to help with deliveries. These are all people I know and trust, so I knew I could rely on them.

How can you best leverage those resources to achieve your goals?

When answering the question, "How can you best leverage those resources to achieve your goals?" An entrepreneur should consider one's professional and personal network. Often, the best resource an entrepreneur has to leverage is their connections and the ability to collaborate. These connections can be used to expand your business, acquire new resources, and reach larger audiences. Using your network effectively is crucial to becoming successful in any industry.

2. Exploring Renewable Energy Options

What are the different types of renewable energy sources available.

Renewable energy sources include hydroelectric, solar, wind, geothermal, and biomass. These sources are considered renewable because they are continually replenished by the environment. In contrast, fossil fuels such as coal, oil, and natural gas are non-renewable resources that are being depleted at a rate that cannot be replenished by natural processes.

What are the advantages and disadvantages of each type of renewable energy source?

When it comes to renewable energy, it's all about location. The sun shines differently in different parts of the country and the same goes for wind. Different renewable energy sources can be better or worse depending on where you are. You can't make a blanket statement about whether solar or wind is better. You have to look at your location and make an informed decision.

3. Calculating Financial Impact

What is the expected return on investment (roi) associated with this project.

In my opinion, an entrepreneur should think about answering the question, "What is the expected return on investment (ROI) associated with this project?" by explaining the benefits of the investment. When presenting the ROI, focus on the positive aspects, such as increased revenue, reduced costs, and increased profits. Also, be sure to include any specific figures you have available, such as percentages or dollar amounts. This will help your audience to understand the ROI and make a decision.

How will this project impact our cash flow?

As an entrepreneur, you should always be aware of your cash flow and strive to ensure it remains healthy. Cash flow is critical because it allows you to pay your team, keep the lights on, and maintain a positive profit margin. Without it, you risk your business going under. For example, cash flow can be negatively impacted by large expenses or delays in payment from clients. To ensure you can answer the question, "How will this project impact our cash flow?" you should always be aware of your cash flow and keep an eye on any changes that may affect it. You should also have a solid understanding of your expenses and be able to anticipate any large expenses that may arise as a result of your project. By staying on top of your cash flow and being prepared for any changes, you can ensure that your project doesn't negatively impact your business's finances.

4. Implementing Sustainable Practices

What strategies and processes can be implemented to ensure sustainable practices are achieved.

For entrepreneurs, sustainability can be a matter of public relations. Positive media coverage can last a long time, and that's a good thing. The worst thing responsible business people can do is nothing. If they're not sure what to do, they can at least conduct a public study. The media will cover the results and everyone will learn a few things. It's a win-win.

How can we measure the success of these sustainable practices?

I would recommend measuring the ROI of sustainable practices to ensure they are truly worth the money. Analyzing the cost of the practices, compared to the profit they make, will help you determine if they should continue. If they don't make a profit, you may want to find a more sustainable way to make a profit.

5. Evaluating Long-Term Goals

Are my long-term goals attainable within a reasonable timeframe.

If you're an entrepreneur and you're struggling to answer this question, it might be time to set up a meeting with your financial advisor. As an entrepreneur, it's important to have a clear vision for the future of your business. However, it's also important to have a realistic understanding of how you plan to get there. Meeting with a financial advisor can help you understand what steps you need to take in order to achieve your long-term goals and map out a realistic timeline for accomplishing them.

What steps can I take now to ensure that I stay on track for achieving my long-term goals?

We live in a world where we are constantly bombarded by information, most of which doesn't apply to us. It's important that we recognize what part of the noise is worth our attention. Sometimes it's helpful to find an experienced mentor that can help guide you, but there are also plenty of resources online that will help keep you on track.

If you stay focused on your long-term goals, you'll stay on track for achieving them.

6. Finding the Right Partners

What kind of partner do you think would be the best fit for our company.

The best way to answer this question is to think about your company's goals and objectives and what kind of person might best help you achieve them. For example, if you're looking for someone to help grow your business, you might want to consider someone who is a natural salesperson or someone who has a background in marketing. If you're looking for someone to help streamline your operations, you might want to consider someone who is good with numbers or has a background in accounting.

What criteria should we use to decide which partners to work with?

When it comes to deciding which partners to work with, the most important criteria to consider are their credibility and reliability as well as how well they complement your organization. In addition, you should also consider factors such as cost and compatibility.

7. Establishing Environmental Standards

What environmental standards do we need to set to ensure compliance with local, state, and federal regulations.

Every small business will have to deal with environmental standards, whether they're aware of it or not. The global awareness of climate change and the need to protect the environment has reached a critical point, and it is no longer a local or state issue. All countries and entities must now participate in the protection of the environment if the human race is to survive.

As the global business environment becomes more complex, small businesses will need to learn to adapt to the new environmental standards. While some of these standards may seem difficult to handle, there are many tools, resources, and agencies that can help you learn how to comply with the standards and still run your business successfully.

How can we ensure that our environmental standards are upheld by our employees and contractors?

As the CEO of a company that provides employee engagement software for companies with a social impact and a commitment to the environment, I know first-hand how important it is for an entrepreneur to keep the employees' wellbeing at the forefront of their mind. In the tech industry, it can be easy to forget that employees are spending a majority of their day sitting - and that can have a huge impact on their health. The last thing you want is to have a team that is burnt out and unhealthy. So make sure that you're encouraging healthy habits, like lots of water and movement throughout the day.

8. Identifying Potential Markets

What markets have the most potential for our product or service.

The most important factor when thinking about answering the question, What markets have the most potential for our product or service? is whether you already have a presence in the market. If not, it's important to do your research before launching a product or service. You need to understand the needs of customers in this market, what products are already available, and how you can differentiate yourself from the competition. You should also conduct market research to identify potential opportunities and understand the customer base. This will help you identify potential growth opportunities for your business.

How can we better understand the needs of our target market?

One of the most effective ways to understand the needs of your target market is to conduct market research. This can include surveys, focus groups, and interviews. It's important to keep in mind that market research is not just about collecting data; it's also about understanding the people who are providing that data and how they fit into the bigger picture. So, don't just think about what people are saying ' think about why they're saying it and how it fits into their lives and the broader picture.

9. Developing a Plan for Growth

What strategies can we implement to expand our customer base.

Customers want to feel unique, and they want to feel like they're a part of something bigger. When you can focus on the fact that you're creating a community around your business, you're going to see a lot of support from your customers. This type of community is also great for customer retention, since your customers will want to feel like they're a part of something bigger than just a transaction with your business.

What resources do we need to create a successful plan for growth?

An entrepreneur should always start with the basics when creating a plan for growth. You need a solid foundation that consists of your mission and vision statements. From there, you can start to formulate your goals, strategies, and action plans for how to achieve your growth objectives.

10. Measuring Progress and Revising Goals

How can you measure progress towards your goals.

The first step to answering this question is to think through your short-term and long-term goals. Once you've done that, you need to identify quantifiable metrics that will help you measure your progress towards these goals. For example, if your goal is to increase revenue, you might measure this using total revenue or revenue growth over time.

How often should you review and revise your goals?

When I answer this, I first have to define what you mean by review, and then by revise. I think entrepreneurs should review their goals quarterly, but revise them often. I don't think of revision as a whole new goal-setting exercise, but rather a process of course correction throughout the year. You can revise your goals weekly, monthly, or quarterly, but I find entrepreneurs who wait longer than a month to revisit their goals tend to get stale and lose momentum.

Key Takeaways:

  • Assess current resources and explore renewable energy options to determine financial impact.
  • Implement sustainable practices to meet long-term goals and find the right partners.
  • Establish environmental standards, identify potential markets and develop a plan for growth.
  • Measure progress and revise goals to ensure positive outcomes.
  • Utilize the right resources and technology to stay ahead of the curve.

Making the switch to sustainable energy is a long-term process that requires dedication and planning. By assessing your current resources, exploring renewable energy options, calculating the financial impact, and implementing sustainable practices, you can prioritize your long-term goals and identify potential markets. As you develop a plan for growth, you must also find the right partners, establish environmental standards, and measure progress and revise goals. With careful research and strategic decision-making, you can create a comprehensive sustainability plan that allows your organization to reap the benefits of renewable energy.

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How to Develop a Small Business Sustainability Plan

If you’re a small business owner, you may be wondering what you’ll gain by adopting a small business sustainability plan. In a word, plenty! Regardless of your industry, adopting sustainable business practices can improve your bottom line—in both the traditional and the environmental sense.

Your cost savings, reduced risk, positive brand association, improvements to the environment and public health, and ability to meet demands for eco-conscientious products and services will more than offset the costs of up-front integration of sustainability initiatives. In other words, your small business sustainability plan’s initial costs are a wise investment!

implementing sustainable business plan

What Is a Business Sustainability Plan?

A business sustainability plan is simply something an organization develops to achieve goals that create financial, societal and environmental sustainability. A business impacts communities and resources, so taking these steps to sustainability is in the best interests of the environment, the business owner and the consumer.

Reasons to Build a Sustainable Business

Making the case for a sustainable business is simple: an environmentally friendly business can be a profitable one. You can decrease your business’s negative impact on the environment and potentially save money. Just take it from the many  companies around the world that generate at least $1 billion a year in revenue from sustainable products or services. These companies manufacture everything from burritos to sports cars. Collectively, these businesses generate more than $100 billion in annual revenue from their green product lines alone, and they can outperform competitors by nearly 12 percent annually.

Small businesses can easily scale these practices and implement them in their own organizations through a small business sustainability plan. From saving money and promoting public health to improving public relations, the benefits of building a sustainable business might surprise you.

Benefits of a Small Business Sustainability Plan

  • Reduce energy use. From installing ENERGY STAR products and appliances to using LED light bulbs and automatic taps, if you reduce waste, you will increase your business’s efficiency, potentially save money on energy and contribute to overall small business sustainability. You can even start small: encourage employees in energy-saving practices such as turning off lights, carpooling, or telecommuting whenever possible.
  • Improve public health.  Be committed to going beyond mere compliance with baseline government standards. A sustainable business will implement changes that reduce emissions, improve air quality, and identify products that reduce concerns about health and safety liability. This promotes higher standards of public health and environmental protection.
  • Be a trailblazer.  Not too long ago, no one thought a sustainable business could also be a profitable one, so many industries still lack sustainable companies. Become an inspiring voice of advocacy beyond the four walls of your organization, and blaze trails by creating value for employees, consumers and the public. The visionary thinking and passion behind your business sustainability plan will be remembered—and will yield dividends—for years to come.
  • Attract green-conscious consumers—and publicity. Improve public relations with your sustainable business by becoming attractive to Earth-conscious consumers and raising your brand’s value. And remember to let the public know when you implement your environmentally friendly policies. Learn more about the  benefits of running an environmentally friendly business here !

5 Steps to Sustainability for a Small Business

If you’re ready to develop your small business sustainability plan, we’re here to help! With these five steps to sustainability based on going above and beyond mere regulatory compliance , you’ll be equipped to make your business more up to date and efficient. The result will be rewards for both the environment and your bottom line.

Step one to sustainability for a small business

Step 1: Learn about Sustainability

The first step in creating a small business sustainability plan is learning what, exactly, sustainability is all about.

  • Knowledge is power. Use your resources wisely! There are many guides out there that offer suggestions on sustainability as well as renewable and sustainable energy. Use them as a jumping-off point.
  • Profits, people and planet. Internalize the idea that sustainability within your business means managing your triple bottom line: your financial, social and environmental impacts, obligations and opportunities.
  • Going green vs. going sustainable. You may be wondering, what is a green business? Green products and services directly reduce the environmental impact when compared to other products and services— sustainability is a broader concept. It’s about the long-term, multifaceted impacts and implications of your products and services. But you can use green language in your small business sustainability plan and campaign using green goals to measure your total sustainability success.
  • Out with the old (way of thinking). Forget the outdated “take-make-waste” worldview, and adopt the “borrow-use-return” model. It’s all about a perspective shift. The key is to see the business, the self, the economy and the household as connected with—instead of separate from—the environment.

Step two to sustainability for a small business

Step 2: Assess Areas of Improvement

If the federal government and major corporations can find ways to improve sustainability, so can your small business! It just takes some research.

  • Learn the laws. From local development laws to self-regulation in your industry to international treaties, many standards are already on the books in terms of sustainable practices. The Environmental Protection Agency ’s website is a great place to start in your research.
  • Check your compliance. At a minimum, your business should be in total compliance with any laws or standards already in place. Research cost-effective ways to improve compliance, such as through pollution-prevention techniques and innovation.
  • Assess global issues. Research issues such as global warming, energy and fuel crises, and ecosystem decline to see whether your practices are a contributing factor. This will guide what small business sustainability goals you set in terms of improvement.

Step three to sustainability for a small business

Step 3: Find Opportunities

Start embracing the entrepreneurial spirit of innovation and asking yourself the hard questions: check out these opportunities for creating the best small business sustainability plan possible.

  • Innovate. Success in implementing sustainable business practices is directly related to innovation. If you want to meaningfully reduce waste and energy consumption, you’ll need to innovate, whether you’re a start-up or a thriving business. From problem solving to finding cheaper and better ways of doing things, innovation ranges from simple changes to implementation of complex new technologies.
  • Get employee input. Bring in employee ideas and support; employees will take responsibility for things like energy efficiency and come up with solutions that will help you implement and improve sustainability.
  • Self-reflect. Ask yourself a few questions, and you’ll find numerous opportunities for improvement: What strengths does my business bring to the table that can play a unique role in sustainability? Does my company create an overabundance of waste? Do the companies I work with create mass amounts of waste?

Step four to sustainability for a small business

Step 4: Create a Vision

Your vision for sustainability is all about what makes you and your business tick.

  • Find your company’s passion. What is your company passionate about? Choose from a few environmental issues (e.g., global warming, air pollution, waste disposal, water pollution, urban sprawl), and focus on where you can have a meaningful impact.
  • Be specific about your small business’s vision. Create a separate vision for each section of your small business, from those on the front lines to those working behind the scenes in different departments.
  • Define your sustainability model’s terms. Be sure to define a few words that describe your business’s specific sustainability model. This will help you give your employees the ability to take ownership of your overall vision.

Step five to sustainability for a small business

Step 5: Implement Changes

The final of the five steps to sustainability is an exciting one. Implementation!

  • Communicate clearly. Adequately communicate your new sustainability plan across your entire company. Educate your employees to ensure successful implementation, and make sure all leaders are involved.
  • Change policies. Ensure your current policies align with your sustainability plan. If not, create new ones that are specific to different departments and employees.
  • Review performance. Create specific, measurable and attainable written goals, and develop metrics on how to track the success of your changes. This could be as simple as comparing a previous energy bill under the old policies with a new one that comes after you’ve implemented changes.
  • Get feedback . Have your leaders in the company report back to you on any difficulties they encounter in implementing changes to policies, so that you can troubleshoot how to fix them while still staying true to the sustainability model. This will help you identify opportunities for more small business sustainability.

After you’ve taken the five steps to sustainability, make sure you can substantiate your sustainability claims before going public with the environmental advantages of your products or services. You can avoid making unqualified claims by following the Federal Trade Commission’s guidelines and general principles that apply to environmental marketing. You’ll learn how consumers will interpret your claims and how to support and qualify your claims without being misleading. Then you’ll be ready to let people know about your small business sustainability plan. The financial, societal, environmental and public relations rewards are sure to follow!

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Building a Sustainable Business Model

Raf Chomsky

In an era where our planet’s resources are under increasing pressure, businesses are called upon to play a vital role in creating a sustainable future. This notion is no longer simply a lofty ideal but rather a practical necessity. Economic viability is now tied to environmental responsibility, and embracing this truth is the key to success in today’s business landscape.

The concept of a sustainable business model represents a significant shift from traditional ways of thinking. It is not merely about incorporating eco-friendly practices into existing structures but rather about building enterprises from the ground up with sustainability as their foundation. Such models prioritize long-term value creation over short-term profit maximization, ensuring that businesses not only survive but also thrive in tomorrow’s world.

This article can serve as your step-by-step guide to understanding, designing, and implementing a sustainable business model. Below, we delve deep into the nuances of what makes a business model truly sustainable and provide tips on how you can adapt your own organization to meet these 21st-century demands. 

So if you’re ready to join the revolution toward responsible capitalism, read on to learn more.

Key Takeaways

  • Sustainable business models prioritize long-term value creation over short-term profits, marrying economic viability with environmental responsibility.
  • The pillars of sustainability include economic viability, social equity, and environmental responsibility, which are interconnected in successful sustainable business models.
  • Designing a sustainable business model requires defining purpose beyond profit, identifying key resources, target market, value proposition, establishing an efficient revenue model, and continuous refinement.
  • Transitioning existing businesses towards sustainability involves auditing current operations, setting measurable goals, developing action plans, engaging employees, and monitoring progress.
  • Implementing a sustainable business model can face challenges such as securing stakeholder buy-in, dealing with initial costs, and overcoming resistance to change.

Understanding Sustainable Business Models

A sustainable business model is one that creates, delivers, and captures value in a manner that is both economically viable and environmentally sound. It takes into consideration the long-term impacts of business operations rather than focusing solely on short-term profits. 

This type of holistic approach ensures the longevity of the business while preserving natural resources and reducing negative environmental impacts .

Understanding sustainable business models requires a shift in mindset. It’s about acknowledging that profitability and sustainability aren’t mutually exclusive but rather complementary. 

Profitability ensures a business remains functional and competitive, while sustainability guarantees its endurance and relevance in an increasingly eco-conscious world.

The Pillars of Sustainability: Economic, Social, and Environmental

The three pillars of sustainability — economic viability, social equity, and environmental responsibility — form the foundation of sustainable business models. Each pillar bears significance and is interconnected with the others, creating a robust structure for businesses that wish to thrive in today’s evolving market landscape.

effective ways to build a sustainable business artwork

Image source: https://www.entrepreneur.com/en-in/growth-strategies/6-effective-ways-to-build-a-sustainable-business/252029

Economic sustainability revolves around the financial aspects of a business. It involves generating enough revenue to sustain operations, invest in growth, and deliver a return on investment to stakeholders. 

It’s about finding that balance between maximizing profits and minimizing costs, all while ensuring fair trade practices and equitable wealth distribution. Economic sustainability also means investing in sectors that have long-term viability and not merely those offering short-term monetary gains.

Social sustainability focuses on the human element within the business process by promotingsocial equity, providing decent work conditions, ensuring employee well-being, and encouraging community development. A socially sustainable business emphasizes inclusivity, diversity, and fairness and strives to contribute positively to society.

Environmental sustainability emphasizes the importance of r especting our planet’s limitations and making conscious efforts to reduce harmful impacts on the environment. This could be achieved through using renewable resources, reducing waste, minimizing carbon footprint, or incorporating green technology into business operations.

Each of these three pillars, together and on its own, is integral to building a sustainable business model. They provide a roadmap for businesses to follow if they aspire to be sustainable in the truest sense of the word — profitable, socially responsible, and environmentally friendly.

Designing Your Sustainable Business Model: A Step-by-Step Process

Designing a sustainable business model is not just a task that you should cross off your list of “to do” things without giving it a second thought, but a journey of aligning your business operations with the principles of sustainability. Such a process requires thoughtfulness, commitment, and a willingness to innovate. 

  • First, you should define your purpose beyond profit . Identify the ways in which your business can create a positive impact on society and the environment. This might involve addressing a societal issue, developing an eco-friendly product, or simply reducing your environmental footprint. 
  • In the second step, identify key resources that are essential to delivering this value . These could include raw materials, human capital, technology, or partnerships. You should consider their availability over the long term and how their use impacts the environment and society. 
  • The third step involves identifying your target market — consumers who value sustainability and are willing to support businesses that embody it. Understanding their needs and expectations is crucial in shaping your products or services.
  • In the fourth step, it’s essential to commit to crafting a compelling value proposition that showcases your unique offering. It should clearly articulate how your product or service is not just beneficial for the customer but also for the wider community and environment.
  • The fifth step is to establish an efficient revenue model that allows you to capture value while maintaining your commitment to sustainability. This could involve adopting a circular economy approach, where waste is minimized, and resources are reused, or it could mean partnering with other sustainable enterprises.
  • Finally, once you’ve designed your model, it’s important to continually review and refine it based on changing market dynamics and evolving customer needs . Sustainability is a journey, after all, not just a destination.

The steps outlined above are just the beginning of what can be an enriching journey toward building a truly sustainable business model that stands the test of time while positively contributing to society and the environment.

sustainable business model innovation

Image source: https://bigbangpartnership.co.uk/sustainable-business-model-innovation/

Adapting Existing Businesses Towards Sustainability

Adapting an existing business towards sustainability is both a challenge and an opportunity. It involves recognizing the need for change and then strategically implementing new practices that align with sustainability principles. 

This transformation process can be started by conducting a comprehensive audit of your current operations . Understand your environmental impact, examine your supply chain, and assess your energy usage — these assessments will help you identify where changes can be made for greater sustainability. 

Next, set clear and measurable sustainability goals based on your audit findings. This might involve reducing greenhouse gas emissions, improving waste management , or investing in renewable energy sources. It’s vital to ensure these objectives are realistic, achievable, and aligned with your overall business strategy.

Once the goals are set, develop a detailed action plan outlining how they will be achieved . This may require investing in new technologies or retraining staff to adapt to new working methods. Remember to make your plan flexible to accommodate unforeseen challenges or opportunities that may arise along the way.

Engage your employees in the sustainability transition by fostering a culture of responsibility and empowerment. Provide training and education about why sustainability matters and how each team member can contribute. Their buy-in and participation are crucial for the successful implementation of sustainable practices.

Lastly, monitor progress regularly against your goals and adjust your strategies as needed. Celebrate achievements to reinforce commitment among team members and communicate your efforts transparently to stakeholders.

Transitioning towards sustainability is not a one-off project but an ongoing commitment. It requires patience, resilience, and a willingness to innovate. However, the benefits — enhanced reputation, long-term financial stability, increased customer loyalty, and positive environmental impact — make it worth every effort.

Overcoming Challenges in Implementing Sustainable Business Models

Implementing a sustainable business model is not without its challenges. From resistance from stakeholders to dealing with initial costs, the road to sustainability can be a testing one. However, these hurdles are manageable and can be overcome with thoughtful strategies.

A common challenge is securing stakeholder buy-in . Not all stakeholders might comprehend the long-term benefits of shifting towards a sustainable business model. To overcome this, it’s essential to communicate your vision clearly and consistently , emphasizing the potential for long-term growth and risk mitigation. Regular progress reports that highlight early successes can also help in convincing skeptical stakeholders.

Another possible hurdle is the perceived high costs associated with implementing sustainability strategies. While some sustainable practices may require up-front investment, they often lead to substantial cost savings in the long run through increased efficiency and reduced waste. Therefore, it’s crucial to consider these expenses as investments rather than mere costs.

Resistance to change within the organization can also pose a challenge. This resistance can be minimized by fostering an inclusive culture where employees feel part of the sustainability journey. Providing training and resources to help them understand the importance of sustainable practices and how they can contribute can significantly reduce resistance.

Overcoming these challenges requires perseverance, clear communication, and a strong commitment to your sustainability goals. 

In Conclusion

As we continue to grapple with global challenges such as climate change, resource depletion, and social inequality, it becomes increasingly clear that businesses must play a crucial role in creating a more sustainable world.

Embracing sustainability is just about mitigating risks or complying with regulations; it’s about reshaping business strategies for long-term success. It involves creating products and services that not only meet consumer needs but also contribute positively to society and the environment.

In this future landscape, innovation will be key. Companies that can develop sustainable solutions will have a competitive advantage. These innovations could be in the form of new products, processes, or business models that reduce environmental impact, improve resource efficiency, or address social issues. This way, businesses can ensure their own survival while contributing to a more sustainable world.

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How to Create a Sustainability Plan for Your Business: Decarbonization Roadmap Example

By Jibility Co-Founder Chuen Seet

Does your business have a sustainability plan? Increasingly, sustainability planning will be an important focus for businesses everywhere, as governments and consumers worldwide have begun demanding more responsible and eco-conscious behavior from corporations.

However, when it comes to sustainability, many businesses struggle to balance their priorities and lack a coherent strategic roadmap to bridge the gap between planning and implementation. According to Forbes, 90% of business executives think sustainability is important, but only 60% have actually implemented a sustainability plan.

We’re hoping to help change that by giving businesses roadmap tools to easily organize, implement, and scale their sustainability initiatives and decarbonization efforts.

Why is a Sustainability Plan Important?

A sustainability plan is a strategy to improve the long-term viability of a business through the responsible use of social, economic, and environmental resources. Although implementing a sustainability plan may increase business and operating costs upfront, ultimately sustainability planning improves business health and profitability in the following ways:

Benefits of Sustainability Planning

1. Enhance brand value and increase customer loyalty: 88% of consumers report that they will be more loyal to a company that supports environmental or social issues. 66% of consumers report that they will spend more for a product from an eco-conscious brand.

2. Reduce costs and increase operating profits: A study by McKinsey found a significant correlation between a company’s responsible use of resources and improved financial performance. The same study found that a business can improve operating profits by up to 60% by reducing their use of carbon, water, and raw materials.

3. Increase sales and profitability: According to NYU, sales of products that had visible sustainability claims grew 5.6x faster than products that didn’t between 2013 and 2018. In 2015, 53% of businesses that implemented a sustainability plan reported increased profits.

4. Attract better talent: As Millennials and Gen Z begin to make up the majority of today’s workforce, employees prioritize working for sustainable companies. Almost 40% of Millennials report that they have chosen a job because of a company’s sustainability plan and nearly 75% report that they would accept a smaller salary to work at a company that is environmentally responsible.

5. Maintain supply chain partnerships: According to Deloitte, 46% of businesses have begun to require their supply chain partners to meet specific sustainability criteria.

6. Reduce governmental and regulatory intervention: Environmental consciousness and responsible use of resources can reduce adverse effects of regulatory intervention. Since 1972, worldwide environmental laws have increased by 3800% . With the US, EU, Australia, and other governments around the world taking aggressive actions toward reducing carbon emissions, businesses that fail to implement sustainable practices now may be exposed to costly financial and regulatory pressure in the future.

7. Capitalize on new business opportunities: Over the past three years, governments worldwide spent $1.2 trillion improving energy efficiency and sustainability. With this trend expected to increase, sustainable businesses will be positioned to capitalize on new market opportunities.

Creating a Sustainability Plan

Creating a sustainability plan may seem like a daunting proposition for many businesses. Afterall, businesses have many moving parts and big goals like ‘reducing carbon emissions’ may seem vague, impractical, and impossible to achieve.

Pre-Planning

Before creating a sustainability plan, it’s important for business leaders to undertake the following steps to narrow their focus into achievable goals:

1. Educate themselves on sustainability: It’s important for businesses to understand the importance of sustainability and educate themselves on the laws and compliance standards that will impact their business (both now and in the future). Doing so will give weight to their sustainability plan, help them identify opportunities for improvement, and gain buy-in from key stakeholders within their organization.

2. Identify high-level areas for improvement: Next, business leaders should assess their business to identify broad areas for improving sustainability. This stage isn’t the time to get hung up on details or discouraged by specifics, but rather to help direct their focus and develop their vision.

3. Develop an overarching vision: From there, it’s important for business leaders to develop an overarching vision for their sustainability initiatives. This vision will help guide the creation of their sustainability plan and inspire action from other members of their business.

4. Break their vision down into specific, measurable goals for improving sustainability: At this point, it’s time to outline specific, measurable goals for improving sustainability. The information gained during the first three steps will help identify specific goals.

Designing a Roadmap

Business roadmap tools can help businesses implement their sustainability plan by breaking down each goal into realistically achievable steps. By helping outline the following, business roadmap tools make implementing a sustainability plan more feasible, efficient, and less likely to be derailed by unforeseen circumstances:

1. Define Challenges: First, the business needs to understand what challenges it must overcome to become sustainable and identify areas for improvement. 2. Outline Objectives: Next, the business matches objectives, or goals, to each challenge. 3. Assess Capabilities: Once objectives have been defined, the business needs to assess its current capabilities to understand which objectives it already has to the capacity to achieve, as well as what tools it needs to invest in. 4. Assign Actions: Next, the business assigns specific actions to bridge any gaps in capabilities. 5. Prioritize Initiatives: The business then groups actions into logical packages of work known as initiatives to organize their execution. 6. Generate a Roadmap: Finally, the business organizes initiatives on a time horizon, generating a visual document known as a roadmap.

Today’s roadmap tools provide features like capability maps, pre-built content, interactive prioritization matrices, and cost-benefit calculators that make generating a sustainability roadmap faster and more streamlined.

Implementation

Once the sustainability roadmap has been generated, business leaders can easily disseminate this visual document to other stakeholders, departments, or members of their team. Doing so will ensure that each facet of their organization will be working in lockstep toward achieving their sustainability goals.

By accounting for potential hurdles, assigning correct actions to each department, and creating a time horizon for each initiative, roadmap tools allow businesses to easily implement a sustainability plan that has a high chance of success.

Decarbonization Roadmap Example

Below is an example of an organization using a roadmap tool to create a decarbonization roadmap.

Step 1: Defining Challenges

Decarbonization business challenges

1. Sourcing more sustainable materials. 2. Optimizing transportation and logistics. 3. Implementing energy-efficient practices. 4. Administering waste reduction strategies. 5. Promoting eco-friendly behavior by their consumers.

(Notice that often challenges are really opportunities. By tackling these five obstacles, the business will be greatly reducing its operating expenses, increasing its efficiency, and using their sustainability plan to build customer equity.)

Step 2: Assigning Objectives to Each Challenge

Decarbonization business objectives

Step 3: Assessing their Capabilities

Decarbonization business capabilities

Step 4: Assigning Actions to Improve Capability

Decarbonization business actions

Step 5: Creating Initiatives

Decarbonization business initiatives

The roadmap tool generates a summary of their initiatives based on the priority they established.

Decarbonization initiative business summary

Step 6: Generating a Decarbonization Roadmap

Decarbonization roadmap

The decarbonization roadmap provides a time horizon that describes which initiatives should be delivered in which sequence, based on priority and capability. This decarbonization roadmap will help the company implement and execute its sustainability plan – both in the near-term and in the future.

Start Building Your Sustainability Plan Today

Does your organization make up the 40% of businesses that haven’t implemented a sustainability plan? Or are you looking to improve organization for your existing plan? We invite you to try Jibility – our free strategic roadmap tool shown in the examples above.

Jibility makes it fast and easy to design and implement a sustainability plan or decarbonization roadmap for your organization, empowering you to do your part to protect the environment and support the communities that support your business.

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Sustainable business for SMEs

  • September 28, 2022

Sustainable business for SMEs

Sustainability is a topic on the minds of many small business owners, and it’s understandable why. Not only does adopting sustainable practices and transitioning to a sustainable business help to prevent climate catastrophe, but it can also improve your bottom line.  

Customers today want to engage with small sustainable businesses that prioritise caring for the planet and its people. According to Forbes , 92% of consumers are more loyal to companies that support environmental and social issues.  

In addition, the Harvard Business Review has reported that implementing corporate responsibility practices can see businesses increase their revenue by 20% or more. Continue reading to learn more about how you can build a thriving, sustainable small business through developing a sustainability plan . 

Sustainability Plan Definition

If you are considering building a sustainable business, chances are you’ve heard the term sustainable business plan once or twice. This term is relatively common, but not all business owners entirely understand what a sustainable business plan entails. Essentially, it is a strategy or a plan created by a business to achieve its goals. A sustainable business plan for SMEs acts as a framework for strategic sustainable development. 

The purpose behind a sustainable business plan is to generate value for all involved whilst being mindful not to drain the resources that help create this value. Business plans prioritising the planet as well as profit consider all stakeholders and assess and address environmental and social impacts. Moreover, they are entirely transparent about their operations to their customers. 

A sustainability plan will hone in on creating financial, societal and environmental sustainability. Businesses have a considerable impact on the environment and society in terms of resources. However, they can be used as a force for good. Not only that, but taking steps to become more ecologically sound is in the best interests of the planet, the business owner and the customer. 

Why you should build a sustainable business

Focusing on the sustainability while growing a small business may seem counterintuitive. However, building a sustainable business will help you establish stronger relationships with your customers and community. Moreover, it is sure to impact your bottom line positively. 

This is because customers care about brands with purpose; they want to align their purchases with their personal values. One study by NielsenIQ found that customers will spend more on products from businesses prioritising the environment. Not only that but becoming sustainable means looking at all stages of your processes to reduce resource use and waste and improve efficiency, lowering operational cost. 

Utilising sustainability tactics in your business strategy will also help you recruit and keep top talent . Employees are similar to consumers in that they value brands with purpose who care about more than just revenue. 

Therefore, when you share the steps you are taking to become more environmentally friendly, you will attract people who want to work with ethical companies. They are likely to stay around, too, as they will be happier in their jobs and feel like they are part of a movement. These are just some of the benefits of creating a responsible business. 

Challenges in implementing a sustainable business plan for SMEs

Many business leaders want to develop sustainable business plans so they can play a role in helping the planet. In addition, they understand the advantages of doing so and that this is the future of business. However, like anything, some challenges prevent business owners from going green. 

We live in a world where everything comes down to revenue and your bottom line. Therefore, it’s not surprising money is one of the factors that cause hesitation among small business owners considering going green. 

However, despite popular belief, becoming sustainable can save you money. Building an environmentally-friendly business is about becoming more efficient, reducing resource use, and lessening waste. All of these actions reduce cost, saving your organisation money. 

While you may think of going sustainable as engaging in large projects like solar energy and upgrading your building, you can start smaller by reducing your plastic waste, composting, recycling, and utilising more efficient appliances. 

Time is considered another significant barrier to businesses becoming more sustainable. They worry they do not have the time to plan, implement and execute the practices needed. 

Of course, building a sustainable business requires some legwork in the form of research and planning. Moreover, small business leaders are generally very busy and pressed for time. 

However, do not forget that you have an entire team who are there to help your business on this journey, it’s about integrating sustainability into each employee’s role. Most likely, they will be delighted to help and even get excited to see your SME prioritising environmental and social impact. 

Not knowing where to start

Another big challenge that is not spoken about enough is that many business owners do not know where to start regarding sustainability. This is precisely why many big corporations bring in sustainability managers and executives. It’s not only small business owners that are daunted by the task of going green. 

However, you do not require these managers or executives. Instead, the support of your team and some research will help immensely. What is required of you here is to look at your operations and measure your current impact. Once you have done this, you can begin implementing initiatives to reduce your impact. 

A lack of education 

This falls in line with the hurdle that is not knowing where to start; many leaders procrastinate becoming sustainable as they fear they do not have adequate knowledge. While this may seem like a dealbreaker, you do not need to be an expert. Instead, research from you and your team will help you get on your way to using your business as a force for good. 

Sustainability Plan Implementation Challenges

It’s just as important to be aware of the challenges of developing a sustainability plan as it is to take note of the advantages. Below are some sustainability best practices that will help you overcome challenges when implementing sustainability.

Your sustainability practices and business mission should go hand in hand

Building a small business or growing an SME is challenging, never mind trying to add sustainability into the mix. However, it doesn’t have to be. Many people go wrong when implementing sustainability in their business because they treat it as a separate goal. 

However, integrating sustainability with your business mission and making responsible business a part of your DNA will make it easier to implement your plan. In addition, you’ll come across as more authentic and effective and be able to reign in on the benefits of building a sustainable business. 

Remember, it’s better if every single business is imperfectly sustainable than not trying at all

Too often, when we do something, we put too much pressure on ourselves to be perfect. This is no different in business, especially when it comes to sustainability. However, it is essential to remind yourself that perfection is impossible and that it is far better to try and not hit all the right marks than not to make any effort at all. 

The businesses that incorporate sustainability into every part of their business are undeniably impressive. In saying that, this results from years of hard work and commitment; you’ll get there too. Nothing happens overnight, and sometimes limitations do exist. 

Consider your customers’ needs and create a process that is easy to follow

When building a sustainable business, learning your top priority should be understanding your customers’ needs. Do some research to see what matters to them, the issues they are navigating and the types of support they require. 

Then, you can adapt your services and products to suit them. What follows from doing this is creating robust, well-defined processes. They should be tried and true and help your team comprehend how to approach day-to-day activities efficiently. 

Embrace digital because it’s where the sustainability advocates live

Part of building a sustainable business is reaching the dedicated followers behind the movement. You need to embrace digital because this is where sustainability advocates spend their time. 

They promote social media posts about all things sustainability and blogs on digital platforms. Therefore, you should take advantage of these communities to build your own community and reach a broad and engaged audience. 

Always be authentic and transparent with your customers

Being authentic and transparent are two key pillars when building a sustainable business. You should always strive to be authentically you when dealing with customers, stakeholders, shareholders, and your team. 

What’s more, you need to be 100% transparent about where your business is in its sustainability journey. This trust and integrity will sustain your business and unlock further growth.

Look after your people and make them feel valued

Sustainability is not just about the environment but also about fostering a good working environment and strong workplace culture. With this in mind, your sustainability plan must prioritise your people to feel valued and essential to the business. 

Giving them a clear purpose for their work and ensuring their well-being has a low cost and many benefits. A strong workforce equates to a robust and thriving business, even if faced with challenges. 

Sustainability is the way of the future in business; however, becoming a responsible business does not happen overnight. You need to develop a sustainability plan that will help you perfectly balance profit with purpose. 

Like anything, its implementation will have challenges, but the advantages will outweigh them. The main takeaways are to communicate the plan clearly across the company, embed sustainability in your mission, and accept feedback on how to improve. 

Looking to learn more?

If you are an SME owner, sustainability leader, or simply interested in business sustainability, find out what it takes to build a responsible business. The Institute of Sustainability Studies offers the Diploma in Business Sustainability which will provide you with all the knowledge and skills you need to craft a future-proof sustainability strategy for your organisation and implement it.

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Bronagh Loughlin

Bronagh Loughlin

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Green Entrepreneurship: Choosing and Implementing Sustainability Initiatives

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Many self-employed business owners recognize the importance of incorporating environmental practices within their companies. Being a “green” entrepreneur is a way to embody the ethics that consumers are clamoring for and positively influence current brand trends. It’s also a great way to cut down on your carbon footprint as a whole and save in the process. 

Choosing the Right Sustainability Initiatives

With younger generations like Gen Z placing great value on sustainability, small business owners are figuring out how to make their ideas, products, or services more sustainable. Moving toward sustainability puts your brand in line to gain and retain more customers while saving your company money and doing environmental good. 

Take the following steps to choose the best sustainability initiatives for your business:

1. Conduct a Sustainability Assessment

Begin by evaluating your business operations and identifying areas with excessive environmental impacts, such as supply chain practices, energy consumption, and waste generation. Use this assessment to prioritize sustainability initiatives for your company.

2. Research Industry Best Practices

Stay abreast of industry-specific sustainability best practices. Research what other businesses in your sector are doing to reduce their carbon footprint. These companies can offer inspiration and valuable insights for implementing similar initiatives in your business.

3. Engage Your Stakeholders

Include all key stakeholders in your company — from employees to suppliers to customers — in the sustainability decision-making process. Consider their viewpoints as they may identify other possibilities and spot potential problems. Additionally, giving your stakeholders a say in sustainability makes them more likely to be on board with the changes happening in your business.

4. Start Small and Scale Up

Start with small, manageable, achievable initiatives rather than completely overhauling your company’s business practices. Easing into the process allows for a smoother and more successful transition. It also enables an accurate measurement of the initial impacts of the new sustainable processes you’ve enacted in your business before you scale up those practices.

Identifying Sustainable Opportunities 

A good sustainability goal can be measured, and ample opportunities exist to identify sustainable, actionable opportunities for your business. For example, many companies aim to purchase carbon offset credits to cancel out the waste that they may generate through other processes. Unfortunately, those credits are not always accurate as they often don’t have tangible measurements. 

Here are some alternatives to carbon offset credits that you should consider for your business sustainability plan:

Work toward supply chain sustainability, including sourcing water and energy responsibly, finding places to cut back on emissions, reusing and recycling, and switching to sustainable packaging with biodegradable and recycled materials;

Use sustainable finance strategies by adopting sustainable loans and green bonds, which show a commitment to corporate social responsibility and attract eco-friendly investors;

Conduct waste audits to determine areas of inventory waste, identify disposal problems, and locate inefficiencies in your current waste management policies. Then, assess energy needs and find your business's best renewable energy solution .

Implement green transportation in your company fleet using eco-friendly transportation options in your supply chain. Begin by assessing your current transportation practices for receiving goods and services from suppliers and delivering products to customers. Green transportation, such as hybrid or electric vehicles, contributes to cleaner air and reduces greenhouse gas emissions.

These sustainable opportunities are excellent entry points for companies switching to a sustainable business plan. Start small and build up to becoming a fully sustainable company over time.

Developing an Implementation Plan

To develop an effective implementation plan, you want to establish clear goals and sustainability objectives for your business. Whether you reduce your company’s carbon emissions or minimize waste, having goals provides a roadmap for making your business greener. 

Set Realistic Timelines

Sustainability initiatives, like regenerative sourcing or sustainable procurement policies, often require sourcing products or infrastructure changes. Determine a reasonable, practical timeline for initiating each goal, considering the potential challenges and complexity associated with each goal. 

Write SMART Goals

Small businesses can succeed in sustainability initiatives by establishing clear benchmarks using the SMART goal method. This tool can help you avoid working toward a vague idea and instead produce a set of clear, achievable, sustainable goals.

Here are the five criteria that align with the SMART method of goal setting:

Specific: What sustainability goal do we want to accomplish? Why should we accomplish it?

Measurable: Use timelines or program management tools to record and assess your progress weekly, monthly, or quarterly; 

Achievable: Ensure that your team has a realistic goal that is achievable to prevent unrealistic expectations and disappointment;

Relevant: Why is this goal important to my team and the company? How will this goal help the company become more sustainable?

Time-Bound: Set goal completion deadlines to create accountability and measure your team’s success.

You can write SMART goals that are more structured and achievable using these five traits. Instead of dealing with frustratingly vague goals, using the SMART methodology lets you and your team create clearly defined goals and a system to measure your progress.

Measuring and Reporting Progress

Measuring a business’s sustainability performance involves examining three key areas, including social, environmental, and governance (ESG) factors . Start by measuring your company’s emissions using a carbon assessment tool or a carbon calculator with measurement software. Benchmark your workplace waste production and emissions and collect employee feedback to determine your company’s overall carbon footprint.

Measuring and reporting the progress in these critical areas is one of the best ways to assess your company’s sustainability performance.

Switch to a Business Sustainability Plan

Selecting and using sustainability initiatives is a process that requires thinking, assessing, and planning. Self-employed business owners can contribute to a more sustainable future while enjoying the perks of their enhanced business sustainability plans and determining clear objectives and evaluation processes. With the proper evaluations and team vision, your small business will be known as a company that cares about customer ethics and environmental good.

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Sustainable business practices

Sustainable Business Practices (Definition & 12 EXAMPLES)

Our planet is not in good shape: we are currently using the resources of 1.5 planets, and even more than this if we consider European and American standards.

But, how can corporations and businesses be more sustainable? By implementing sustainable business practices! But What does a sustainable business practice mean?

Sustainable business practices definition: actions allowing the company to create a positive impact on people, society, and the environment while also making a profit. Sustainability is an essential part of social and environmental responsibility in business today and it is a necessary step toward preserving our planet for future generations.

Table Of Contents

What are sustainable business practices?

Sustainable business practices balance the 3 pillars of sustainability ( 3 Ps ) and are a way to run a business in a way that is environmentally friendly and socially responsible.

They help protect the environment and the people who live in it, while also saving money, reducing waste, and conserving natural resources.

The 3 pillars of sustainability are:

  • Environmental sustainability : the planet
  • Social sustainability : the people
  • Economic sustainability : profit and growth

Given the above, here’s a sustainable business definition:

To achieve sustainable development in business, those 3 principles need to be balanced and taken care of all at the same time. So businesses should look at practices to improve all of these areas. You can think about this as if the company had 3 balance sheets: economic, environmental, and social.

There is also an alternative framework available that is based on 4 pillars. In this model, there is an additional human sustainability pillar that needs to be balanced. Essentially this alternative framework tends to give more importance to the satisfaction of human necessities to achieve sustainability.

Business sustainability from 0.0 to 2.0 and 3.0

Traditional management was focusing only on economic growth and profit. It didn’t include social and environmental sustainability. It was all about satisfying the shareholders.

There are 3 levels of sustainability in business, going from sustainability 1.0 to 2.0 and 3.0:

  • Business Sustainability 1.0 : This is also known as refined shareholder value management and it is when environmental and social sustainability are just considered as means to a specific end. With the target of the business still being just economic profit and success.
  • Business Sustainability 2.0 : At this stage, the business is aiming at improving and balancing a triple bottom line of sustainability : economic, social, and environmental.
  • Business Sustainability 3.0 : This involves changing completely the way a business looks at the issues. The aim of the business is no more to just try to reduce the negative impacts on the environment and society. Corporations are instead taking a proactive approach by actively contributing to solving the world’s sustainability problems. At this level, the business leaders will be examining the world’s problems and then looking at opportunities for how they can eventually develop solutions to improve sustainability! Unfortunately, not many companies are at this stage yet, but things are slowly changing.

Benefits of sustainable business practices

The benefits of becoming a sustainable company include:

  • Lower operating costs
  • Reduced environmental impact
  • Increased profits due to greater sales volumes
  • Higher employee morale and productivity because they are making a difference for the planet and society
  • Better quality of life for everybody
  • Reduced costs for consumers (e.g., reduced energy bills)
  • Increased sales from consumers who are more likely to buy products from companies with good corporate sustainability programs
  • Stronger public image and reputation for companies that are perceived to be more socially and environmentally responsible
  • Improved customer loyalty, which can lead to increased sales and profits

To do this, the company needs to have sustainable business operations.

11 Examples of sustainable business practices

What are sustainable practices in business? Here are some sustainable business practices examples that can help you to better understand this concept! Sustainable practices examples include:

1. Renewable energy

Renewable energy is energy that is not depleted by use. It includes solar, wind, hydropower, and more.

Renewable energy is one of the most popular sustainable business practices because it allows companies to reduce the environmental impact while also saving money in the long run.

Renewable resources such as hydropower have pros and cons , however, they can be used for a long time without being depleted, unlike fossil fuels (coal, oil, and natural gas), which are examples of non-renewable resources and can be used up completely.

One of the main advantages of renewable sources over fossil fuel based power plants is that they don’t emit carbon dioxide (a greenhouse gas that contributes to climate change) into the atmosphere during their operation.

If you are considering solar energy for your business, make sure to review the questions to ask a solar company before signing a contract. You may also want to calculate the number of solar panels you will need and eventually even convert your backup systems to off-grid solar generators .

Finally, solar energy not only has great benefits for the environment but can also help your business to reduce operating costs . In fact, solar panels and batteries require very little maintenance, and once installed, you will get free renewable energy for decades.

2. Environmentally friendly products

Businesses should be aware of the impact their products have on the environment. Here are some guidelines to help your business make environmentally friendly choices:

  • Prefer energy-efficient products : this applies to both the products made by your business and the products used by the company.
  • Avoid harmful chemicals and materials by using environmentally friendly alternatives. For example, instead of using a disposable plastic bag, use an eco-friendly reusable cloth bag or paper shopping bag.
  • Reduce waste through the 6 Rs of sustainability , looking at ways to reuse, recycle, and compost. Avoid buying single-use items that will quickly end up in a landfill.
  • Source locally : when possible, try to source raw materials locally.
  • Design products that are easy to repair . This will help reduce waste and increase the longevity of your products.

3. Recycling and reduction of waste

Recycling is one of the easiest ways to help the environment. It requires no additional effort from the business but does help reduce waste by using fewer newly extracted materials.

You can also reuse items as much as possible and think about what impact packaging has on the environment.

For example, if the business needs to dispose of a lot of cardboard, then definitively look into baled cardboard recycling . Did you know that the company can also make a profit and get other important benefits by simply recycling cardboard?

4. Sustainable packaging

Sustainable packaging is about creating and using more sustainable materials. There are many ways to reduce the amount of packaging used, such as:

  • Recycling or reusing materials from your products and packaging
  • Using reusable containers (such as glass jars) or other storage options
  • Use biodegradable materials to create compostable packaging with pre-marked recycling symbols on them. This makes it easy for consumers to dispose of their products correctly when they’re done using them

5. Converting Corporate Fleets to Hybrid or Electric

Converting corporate fleets to electric or hybrid vehicles is one of the key sustainable practices for businesses. It drastically reduces the carbon footprint and brings cost savings.

By replacing gas-guzzling cars and pickups, emission levels decrease, improving air quality and combating climate change. Transitioning aligns with the demand for sustainability, attracting eco-conscious customers and enhancing brand image.

Electric or hybrid vehicles offer reduced fuel and maintenance expenses. For example, by switching to plug-in hybrid SUVs , cars, and lorries, companies can decisively reduce fuel costs, as charging is cheaper than gasoline.

Maintenance requirements are also lower due to fewer moving parts. This frees up time and resources for businesses to focus on core operations, without the hassle of frequent repairs and servicing.

Although an initial investment is required, long-term benefits outweigh the costs. With advancing technology and more available charging infrastructures, the transition is becoming easier and more viable.

Governments and organizations also offer incentives and grants to support businesses, reducing upfront investment. Converting to hybrid or electric cars is a win-win situation for businesses and the environment.

In this area, there’s not a one size fits all solution. Before switching to electric trucks , businesses should evaluate the pros and cons of hybrid cars as well as those of EVs to check which one of those is better fitting the corporate requirements.

6. Composting

Composting is a sustainable business practice that can help you reduce the amount of waste that goes into landfills.

It’s also good for the environment because composting turns organic waste into fertilizer, which helps plants grow and reduces the need for synthetic pesticides and fertilizers. And because compost is rich in nutrients, it’s perfect for growing food crops like tomatoes (as long as squirrels and deer don’t eat them).

Composting keeps food out of landfills by recycling food scraps and garden trimmings from green areas instead of throwing them away or sending them to landfill. And when these resources are used as compost ingredients, they benefit your community and also help to create new jobs!

7. Ethical sourcing

Ethical sourcing is a form of business practice where manufacturers and brands are ethically sourcing their products to ensure that they are produced in a way that respects human rights, workers’ rights, and environmental protection practices.

Why businesses should be ethical sourcing and manufacturing?

Ethical manufacturing means making sure that workers are treated well, can be paid fair wages and have access to safe working environments.

It also means making sure there’s no child or slave labor involved in the production process. This is why many companies now choose to only source from suppliers which are following good standards on these issues and also perform ethical audits.

Ethical sourcing is a sustainable business practice that helps the company to improve social sustainability.

8. Sustainable Supply Chain Management

Sustainable supply chain management is a practice that aims to minimize the environmental impact of products and services from their inception through consumption.

It involves identifying, analyzing, and reducing the environmental impact of all aspects of your business: from materials used in manufacturing to transport methods and final disposal.

Sustainable supply chain management can help you:

  • Reduce waste by ensuring you use resources efficiently
  • Improve energy efficiency by reducing energy consumption for production or shipping materials to customers
  • Reduce pollution by using materials that are more eco-friendly.
  • Improve labor conditions by ensuring workers are treated fairly and paid a good living wage.

9. take care of employees and their workplace

Employees are the heart of any corporation and business. It’s important to take care of them in order to create a healthy workplace and achieve social and human sustainability for the business.

Building a culture where everyone feels valued and cherished is key to creating an environment where people enjoy going to work each day.

It’s also important for the business to provide opportunities for growth, so employees can continue growing as individuals while also contributing with their talents towards the success of the company.

10. Corporate environmental responsibility

Corporate environmental responsibility is a sustainable business practice that helps companies manage their environmental impacts.

Companies can reduce their environmental impact by minimizing waste, recycling and reducing pollution. They also may work with suppliers to reduce their own environmental impact.

Corporate environmental responsibility is not a new concept. It’s been around since the 1970s but only recently has become more popular in the US, especially among large companies that want to differentiate themselves from other businesses on this issue.

11. Corporate social responsibility

Corporate social responsibility is a sustainable business practice where companies are developing programs that help the surrounding communities and society at large.

Corporate social responsibility includes things such as:

  • Promoting equality and inclusivity : keeping a diverse workforce and supporting minorities in the business.
  • Corporate citizenship : The idea of corporate citizenship is to create a company culture where employees feel empowered to make positive changes in their community.
  • Corporate philanthropy : This refers to giving back financially or through volunteering time by corporations, not just employees but also shareholders as well. Corporations can give money directly or use other means such as grants or donations for specific projects like building houses for disadvantaged families in need.
  • Corporate Giving Programs : This is a mechanism used by companies to promote goodwill among customers and employees while helping the community at large.

12. Sustainability Reporting

Sustainability reporting is a way for companies to communicate their sustainability performance to stakeholders.

It can be done through a variety of means, such as annual reports or corporate websites that provide information on the company’s environmental and social impacts.

Sustainability reporting is also an important aspect of the Environmental, Social, and Governance scoring system ( ESG metrics ). As a result, a corporation following sustainable business practices will be more appealing to institutional ESG investors .

Companies should consider how they will be measured in relation to their competitors when designing their reporting structure.

For example, if you are comparing two products or services side by side in terms of how they impact the environment, then it might make sense to include all aspects of sustainability in one document. So as not to give any advantage over another product/service being compared against yours.

However, if you are comparing the performance of your company against others in a particular area (such as energy use), then it may make more sense to break down your reporting into different sections and compare yourself with other companies that have similar operations.

Why are sustainable business practices important?

Sustainability practices are important because the environment is our shared responsibility. When we make a decision to use resources in a way that doesn’t harm the environment, we are doing our part to protect it for future generations.

Sustainable businesses are able to reduce waste while still providing value for customers by using renewable resources (like solar power), recycling materials or composting food waste instead of throwing it away altogether.

They also help not only reduce pollution but monitor how much energy they use so they can be more efficient with the business’s operating costs as well as save money overall on operating expenses like heating/cooling etc.

Sustainability practices in business can also be good for the company’s bottom line: they help companies reduce costs and become more competitive by reducing waste and recycling products.

In fact, according to the United Nations Environmental Programme ( UNEP ), “Sustainability is not just about protecting nature; it’s also about ensuring people’s right to live in harmony with their surroundings.”

A company that practices sustainability can also build a more loyal customer base. When people feel like they are making a difference by purchasing products from an environmentally and socially responsible business, they are more likely to buy from that company again.

What companies should use sustainable business practices?

Sustainable business practices can be implemented by any company, regardless of size or industry. In fact, many large corporations have implemented sustainable business practices as part of their mission statement.

They may be doing so because they want to improve their image by being more environmentally friendly and socially responsible.

In the future, thanks to blockchain will support sustainable business practices , by making it easier for companies to report and demonstrate their eco-friendly commitments.

Sustainable business practices are designed to ensure that businesses will thrive while also looking after their impact on the environment and society.

This is important as it helps ensure that future generations can continue to enjoy the same benefits we have today. Nowadays there are many examples of sustainable development and sustainable business examples showing how to achieve this.

I believe that green business practices are a core part of any organization’s strategy. They go beyond just being good for the environment and include building relationships with customers and employees as well as growing the bottom line!

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€1.6m project to support SMEs to make smart decisions about sustainability

Group at munster technological university is leading a new €1.6m international project to help small businsesses implement effective sustainability measures.

implementing sustainable business plan

Involved in the Target Circular project are Jennifer Shore of Ludgate Hub; Louise Byrne of Killarney Park and The Ross hotels; Katy Wareing, director of strategy & innovation, Ludgate Hub; Michael Ledwith, Atlantic Bio-Cycle; Niall O'Leary, Hincks Centre, MTU Cork; Martin Johnson, Ecodiversity; and Stephen Barry-Hannon, Circular Bio Economy Cluster, MTU South West. Photograph: Andy Gibson

A group at Munster Technological University (MTU) are seeking business owners and advisers to take part in a new €1.6 million international project to help SMEs implement effective sustainability measures.

The Target Circular project is a collaboration between institutions in Ireland, Finland, Norway, Iceland and Sweden, and builds on recent research into how businesses can use a more scientific approach to decision-making.

The entire project is Irish-led by the Hincks Centre of Entrepreneurship Excellence, with the support of Circular Economy Cluster Southwest, at MTU.

The project, funded by EU programme Interreg, will work with SME’s to transition towards circular and sustainable practices by helping businesses to use a “strategy mapping” process to make decisions about how to effectively implement sustainability measures.

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Dr Niall O’Leary, project coordinator and research fellow at the Hincks’s Centre for Entrepreneurship Excellence in MTU, said the project would provide tools for SMEs to help narrow their focus and achieve their sustainability goals.

“Ambition brings with it enthusiasm and lots of ideas. However too many ideas can be counterproductive as there is only so many hours in the day, you can’t do everything. The strategy mapping process can lead to a visible transformation in participants, from almost a nervous energy from all the ideas bouncing around in their head to a more focused or strategic participant,” he said.

Target Circular has already launched its first strategic entrepreneur training pilot programme at the Ludgate Hub in West Cork, and aims to develop materials for SMEs that will be distributed through Local Enterprise Offices (LEOs) in Ireland and their equivalents in other participating countries.

Michael Ledwith is one of the business owners in the pilot training programme. He is co-founder and chief executive of AtlanticBiocycle, a start up which aims to convert fish waste into fertiliser for farms.

“It’s been about looking at the end goal and working backwards. It’s been very useful to see the wood for the trees. Finding out how to move forward with licensing, with partners, and understanding the best next steps to take and what steps have the highest chance of success,” he said.

Louise Byrne is sustainability manager for the Killarney Park Hotel and Ross Hotel in Kerry, and one of the drivers behind the Killarney Coffee Cup Project which has seen more than 50 businesses in the town swapping single-use cups for a deposit return scheme. She is taking part in the pilot Target Circular programme to look at ways to expand the community-wide project and find uses for coffee grounds and other food waste.

“Target Circular is helping us to strategise and narrow our focus. It’s more of a practical approach rather than focusing your energies in the wrong area that might not benefit the long term goals of what you’re trying to achieve,” she said.

Target Circular is putting out the call for business advisers across Ireland to attend its learning and dissemination event on March 6th in Skibbereen, Co Cork. Those interested in participating in the event are advised to contact Dr Niall O’Leary at the Hincks Centre of Entrepreneurship Excellence, or Circular BioEconomy Cluster Southwest.

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Ellen O'Regan

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Ellen O’Regan is an Irish Times journalist.

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Unilever Global Change location

Implementing Growth Action Plan at pace

Published: 8 February 2024

Average read time: 18 minutes

Today, we announced our results for the full year 2023.

  • Underlying sales growth of 7.0% with positive volumes, up 0.2% for the FY and 1.8% in Q4
  • Turnover of €59.6 billion with -5.7% impact from currency and -1.7% from net disposals
  • Underlying operating margin up 60bps to 16.7%, with gross margin up 200bps for the year and up 330bps in the second half
  • Underlying EPS increased 1.4% with -9.6% of adverse currency, up 11% on a constant basis
  • Diluted EPS down -14.2% against prior year that included €2.3 billion profit on disposal for the Tea business
  • Strong cash conversion of 111% with free cash flow up €1.9 billion to €7.1 billion
  • New €1.5 billion share buyback to commence in Q2
  • New leadership team has embedded the plan across the organisation
  • 30 Power Brands (around 75% of turnover) accretive to growth and margin, with underlying sales up 8.6%
  • Brand and marketing investment up 130bps to 14.3%, focused on 30 Power Brands
  • Active portfolio optimisation into premium segments, announced acquisitions of K18 and Yasso and disposals of Elida Beauty, Dollar Shave Club, and Suave in North America

various products

Statement from Hein Schumacher, CEO

“Today’s results show an improving financial performance, with the return to volume growth and margins rebuilding. However, our competitiveness remains disappointing and overall performance needs to improve. We are working to address this by improving our execution to unlock Unilever’s full potential.

“In October, we set out a Growth Action Plan focused on three priorities: delivering higher-quality growth, stepping up productivity and simplicity, and adopting a strong performance focus.

“The new leadership team has embedded the action plan at pace. We have increased investment behind our 30 Power Brands, accelerated portfolio transformation, and are driving a sharper performance focus with clear and stretching targets across the whole organisation.

“We are at the early stages of this work and there is much to do but we are moving with speed and urgency to transform Unilever into a consistently higher performing business.”

We expect underlying sales growth (USG) for 2024 to be within our multi-year range of 3% to 5%, with more balance between volume and price.

We anticipate a modest improvement in underlying operating margin for the full year. We will deliver this through gross margin expansion, driven by a step-up in productivity and net material inflation back to more normal levels.

Growth Action Plan update

In October 2023, we set out a Growth Action Plan to drive improved performance and competitiveness. During the fourth quarter, we moved at pace to embed it across the business.

The plan is divided into three elements but is underpinned by one simple premise: the need to do fewer things, better, with greater impact. The operational impacts will build throughout 2024.

Faster growth

1. Focus on 30 Power Brands : These gross margin accretive brands represented around 75% of Group turnover with underlying sales growth of 8.6% in 2023 and 6.5% in the fourth quarter. This is where we have concentrated our incremental brand and marketing investment, which will continue in 2024.

2. Drive unmissable brand superiority : We developed a new quantitative methodology to measure brands’ consumer appeal across multiple dimensions and have validated it in 29 strategic cells. During the first half of 2024, this will be rolled out across all 30 Power Brands in key geographies to identify performance gaps and improve competitiveness.

3. Scale multi-year innovation : We have identified multi-year, scalable innovation programmes to drive market development and premiumisation. The programmes at least double the average 2022 project size, with launches from 2025.

4. Increase brand investment and returns : In 2023, we reinvested more than half of our gross margin expansion into incremental brand and marketing investment, up 130bps to 14.3%. We will continue to step up investment in areas that drive impact and support improved competitiveness.

5. Selectively optimise the portfolio : We continue to reshape the portfolio, with the announced acquisitions of Yasso and K18 and the disposals of Elida Beauty, Dollar Shave Club and Suave.

Productivity & simplicity

6. Build back gross margin: We accelerated recovery in the second half of 2023 with a 330bps gross margin improvement, driving a 200bps improvement for the year to 42.2%. In 2024, a tight grip on costs, measured by improved net productivity, will fuel further gross margin expansion.

7. Focus our sustainability commitments: We are honing our sustainability efforts around four critical platforms: Climate, Plastic, Nature and Livelihoods. We have set exacting, short-term targets, to drive progress against our longer-term commitments.

8. Drive benefits of the organisation: The category-focused Business Groups are now fully implemented with end-to-end responsibility for strategy and performance. In 2024, this will enable sharper choices to accelerate growth and digitalisation.

Performance Culture

9. Renewed team : Since October, over half of our executive leadership team has changed. Our new leaders are addressing the 2024 opportunities and challenges with urgency and decisiveness.

We are announcing today that our Chief People & Transformation Officer Nitin Paranjpe has decided to retire from Unilever later this year. Nitin has had a distinguished 37-year career with Unilever, including as CEO of Hindustan Unilever, President Home Care, President Foods & Refreshment and Chief Operating Officer of Unilever. We are pleased to announce the appointment of Mairéad Nayager as our new Chief People Officer, effective 1 June. Mairéad is currently Chief Human Resources Officer (CHRO) of Haleon plc, having previously served as CHRO of Diageo plc between 2015 and 2022.

10. Drive and reward outperformance : We have implemented a new reward framework across the organisation with metrics more closely aligned to value creation. A new Directors' remuneration policy proposal has been extensively consulted on with our largest shareholders and will be voted on at the 2024 AGM.

Unilever overall performance

Underlying sales growth in the full year was 7.0%, with positive volumes of 0.2% and 6.8% from price. Growth from the 30 Power Brands was accretive at 8.6%. Beauty & Wellbeing and Personal Care delivered strong volume growth throughout the year and Home Care returned to positive volume growth in the second half. Volume growth for the Group accelerated to 1.8% in the fourth quarter, with 3.9% volume growth from the 30 Power Brands.

Underlying price growth decelerated from 10.7% in the first quarter to 2.8% in the fourth quarter, reflecting lower net material inflation in the second half. Nutrition and Ice Cream faced the highest input cost inflation in 2023 which translated into higher pricing.

The percentage of our business winning market share [a] on a rolling 12-month basis was disappointing at 37%. This poor performance reflects share losses to private label in Europe, consumer shifts to super-premium segments in North America where we currently under index and a significant reduction of unprofitable SKUs globally. Our competitiveness is not good enough and we are moving quickly to address it.

Beauty & Wellbeing grew underlying sales by 8.3%, with strong volume growth of 4.4%. Prestige Beauty and Health & Wellbeing continued to grow double-digit and now account for a quarter of Beauty & Wellbeing’s turnover.

Personal Care grew underlying sales 8.9%, with 3.2% from volume and 5.5% from price, led by strong sales growth of Deodorants.

Home Care grew underlying sales 5.9%, driven by 6.8% from price and -0.9% from volume, with positive volumes in emerging markets offset by a double-digit decline in Europe.

Nutrition grew underlying sales 7.7%, with 10.1% from price and volumes down -2.2% as we responded to higher input costs and a challenging European market.

Ice Cream’s underlying sales growth was disappointing at 2.3%, with price growth of 8.8% and a volume decline of -6.0%, reflecting the impact of downtrading in the in-home channels.

Emerging markets (58% of Group turnover) grew underlying sales 8.5%, with 1.6% from volume and 6.9% from price. Latin America, Turkey and Africa delivered double-digit growth. India grew mid-single digit led by volume, with lower input costs that led to negative pricing in the fourth quarter. Sales in China grew low-single digit led by volume while the market recovery continued to be uneven and slower than expected. Growth in South East Asia was impacted by a sales decline in Indonesia in the fourth quarter as consumers avoided the brands of multinational companies in response to the geopolitical situation in the Middle East.

Underlying sales in developed markets (42% of Group turnover) grew 4.8% in the full year with 6.7% from price and -1.8% from volume. North America delivered strong growth of 5.8% with 2.5% from volume and 3.3% from price, with continued double-digit underlying sales growth in Prestige Beauty and Health & Wellbeing. Volume growth in North America accelerated throughout the year leading to volume growth of 6.3% in the fourth quarter. In Europe, underlying sales growth was 4.1%, driven by 12.8% from price given its higher exposure to categories with significant cost inflation, and a volume decline of -7.7%.

Turnover was €59.6 billion, down -0.8% versus the prior year, including -5.7% adverse foreign exchange translation and -1.7% from disposals net of acquisitions. Underlying operating profit was €9.9 billion, up 2.6% versus the prior year. Underlying operating margin increased 60bps to 16.7%. We improved gross margin by 200bps to 42.2% with an improvement of 330bps in the second half. We more than mitigated net material inflation of around €1.8 billion through improved productivity, price and mix while stepping up brand and marketing investment by €0.7 billion, a 130bps increase as a percentage of turnover. Overheads increased by 10bps, as we continued to invest in the expansion of our Prestige Beauty and Health & Wellbeing businesses.

Capital allocation

We continue to reshape the portfolio, allocating capital to premium segments through selective bolt-on acquisitions and divesting lower-growth businesses while balancing investment in the business and shareholder returns.

Adding to our portfolio of premium brands, we announced the acquisitions of Yasso Holdings, Inc., a premium frozen Greek yogurt brand in the United States, which completed on 1 August, and K18 , a premium biotech hair care brand, which completed on 1 February 2024.

We announced three disposals during the year: the Suave beauty and personal care brand in North America, which completed on 1 May; Dollar Shave Club, which completed on 1 November; and Elida Beauty, which comprises more than 20 personal care brands. It is expected to complete by mid-2024.

In 2023, we returned €5.9 billion to shareholders through dividends and share buybacks. We completed the final two €750 million tranches of our €3 billion share buyback programme. The quarterly interim dividend for the Fourth Quarter is maintained at €0.4268.

Reflecting the Group’s continued strong cash generation, the Board has approved a share buyback programme of up to €1.5 billion to be conducted during 2024, which we expect to commence in the second quarter.

Beauty & Wellbeing (21% of Group turnover)

In Beauty & Wellbeing, we are focused on three key priorities that will drive the unmissable superiority of our brands: elevating our core Hair Care and Skin Care brands to increase premiumisation; fuelling the growth of Prestige Beauty and Health & Wellbeing with selective international expansion; and continuing to strengthen our beauty and wellbeing capabilities.

Beauty & Wellbeing delivered a strong full year performance, with underlying sales up 8.3%, balanced between price at 3.8% and volume at 4.4%. Volume growth accelerated through the year to 6.3% in the fourth quarter, with good volumes in Hair Care and very strong volumes in Health & Wellbeing.

The full year performance reflects continued strong growth in Prestige Beauty and Health & Wellbeing, which now account for a quarter of Beauty & Wellbeing’s turnover, as well as successful relaunches of some of our core Hair Care and Skin Care brands. The relaunches were powered by our science and technology capabilities and were supported by increased investment across our key markets to elevate their superiority credentials.

Hair Care grew mid-single digit through a combination of price and volume growth, with strong growth in Latin America and Turkey. Sunsilk delivered double-digit growth for the year following a successful relaunch of the brand. Clear delivered mid-single digit growth driven by breakthrough innovation – our first clinically proven anti-dandruff formula powered by niacinamide concentrate to repair and strengthen the scalp’s skin barrier. Following the successful relaunch in China last year, the mix has now been expanded to Thailand, Turkey and Brazil.

Core Skin Care grew low-single digit driven by price. Vaseline delivered double-digit growth, reaching €1 billion of turnover in 2023. Following the launch of our successful Gluta-Hya range in South East Asia two years ago, we further expanded the platform with the launch of serums and a Pro-Age range, tapping into a larger consumer pool by extending the patented technology to more products and new markets such as India. In North Asia, AHC declined double-digit as we reset the cross-border trade channel.

Our US-centric Prestige Beauty and Health & Wellbeing portfolios, built over several years through carefully selected bolt-on acquisitions, continued to grow ahead of the market delivering double-digit growth for the year. This was supported by strong performances from Hourglass , Dermalogica and Paula’s Choice which launched a Vitamin C range, using our core science and technology capabilities.

In Health & Wellbeing, Liquid I.V. and Nutrafol performed strongly. Liquid I.V. added sugar-free and kids variants to the range, without compromising flavour or function. The brand extended its presence outside of the United States for the first time with a successful launch in Canada, and further international roll-outs planned.

Underlying operating margin was flat with gross margin improvement reinvested in marketing and overheads.

Personal Care (23% of Group turnover)

In Personal Care, we are focused on winning with science-led brands that deliver unmissable superiority to our consumers across Deodorants, Skin Cleansing, and Oral Care. Our priorities include developing superior technology and multi-year innovation platforms, leveraging partnerships with our customers, and expanding into premium areas and digital channels.

Personal Care grew underlying sales 8.9% for the year, with growth balanced between price and volume, underpinned by continued strength in Deodorants. In the fourth quarter all three categories drove positive volumes.

Personal Care’s full year growth was led by its Power Brands and science-backed innovations. These innovations offer functional benefits but also deliver enhanced health, hygiene, and superior skin cleansing. Personal Care supported these innovations with a step-up in marketing investment, including strategic sponsorships such as our first sponsorship deal with FIFA.

Deodorants grew double-digit led by strong volume growth, particularly in Europe and Latin America. Rexona grew double-digit and its range of products with 72-hour sweat and odour protection technology is now in over 100 markets. Dove delivered double-digit growth with the successful launch of Dove Advanced Care for women and the launch of a new range of Dove Men+Care antiperspirant. Axe grew high-single digit following the launch of its new, long-lasting fine fragrance collection.

Skin Cleansing delivered mid-single digit growth with positive volumes. Lux grew double-digit driven by elevated skin care benefits in soap bars from its ProGlow technology. In the United States, Dove grew mid-single digit supported by its Body Wash relaunch with new packaging and 24-hour renewing MicroMoisture technology.

Oral Care grew mid-single digit led by price. Closeup grew double-digit and Pepsodent grew mid-single digit, having expanded its premium offerings in therapeutics and whitening.

The Dove Personal Care portfolio achieved double-digit growth with balanced price and volume growth.

Underlying operating margin increased by 60bps, driven by a strong gross margin improvement that was partly re-invested in increased brand and marketing investment.

Home Care (21% of Group turnover)

In Home Care, we focus on delivering for consumers who want superior products that are sustainable and great value. We drive growth through unmissable superiority in our biggest brands, in our key markets and across channels. We have a resilient business that spans price points and grows the market by premiumising and trading consumers up to additional benefits.

Home Care grew underlying sales 5.9% for the full year, with 6.8% from price and -0.9% from volume. Volumes were positive in the second half, with a sharp price growth deceleration in emerging markets reflecting commodity cost deflation.

In Home Care, we stepped up investments in brand and marketing and R&D to drive unmissable superiority of our biggest brands and deliver innovations that enhance the efficacy and sustainability of our products.

Fabric Cleaning grew mid-single digit for the year. This was led by high-single digit growth in Latin America where we launched OMO Branco Absoluto that restores the whiteness of clothes. South Asia delivered balanced high-single digit growth as we continued to develop the market by offering a full range of products to consumers, from entry-level products such as our Wheel laundry soap bar to mid-tier Rin, to premium Surf Excel liquid detergent. Growth in Europe was flat with double-digit price growth offset by volume declines.

We expanded plastic-free packaging for OMO capsules to more countries across Europe and drove premiumisation through next-generation innovation such as laundry sheets, a convenient and sustainable alternative to liquids and capsules.

We leveraged our cross-category science and technology platforms by using fragrance innovation from Beauty & Wellbeing in Fabric Enhancers where we launched Comfort Beauty Perfume in Vietnam. Fabric Enhancers delivered mid-single digit growth driven by price with low-single digit volume decline. Turkey continued to lead growth with double-digit price and volume growth.

Home & Hygiene grew mid-single digit led by strong growth in Latin America and South Asia which was partially offset by a decline in South East Asia. In the United Kingdom, we launched Domestos Power Foam – an unmissably superior innovation that is designed to spray upside down for improved cleaning performance as well as convenience. High store penetration and availability coupled with product superiority make this a blueprint for future roll-outs.

Underlying operating margin increased by 150bps driven by the strong gross margin improvement and a step-up in brand and marketing investment.

Nutrition (22% of Group turnover)

In Nutrition, our strategy is to deliver consistent, competitive growth by offering unmissably superior products through our biggest brands. We do this by reaching more consumers and focusing on top dishes and high consumption seasons to satisfy consumers’ preferences on taste, health and sustainability; while delivering productivity and resilience in our supply chain.

Nutrition grew underlying sales 7.7% for the year, with 10.1% from price and -2.2% from volume. Growth continued to be price-led as we responded to higher input costs of food ingredients. In the fourth quarter, we saw an improvement in volumes, with our two largest brands, Hellmann’s and Knorr , returning to positive volume growth.

Growth in Nutrition was driven primarily by Knorr and Hellmann’s , which together accounted for 60% of Nutrition’s turnover in 2023. We sharpened our focus on offering holistically superior products and unmissable marketing campaigns in key seasons, supported by increased marketing and R&D investment. Our business in Europe remained challenging as a result of continued cost inflation, the targeted exit of unprofitable SKUs, and private label share gains, impacting both volumes and profitability.

Scratch Cooking Aids grew high-single digit, led by Knorr , which achieved €5 billion in turnover in 2023. North America grew mid-single digit, supported by the ‘ Knorr Taste Combos’ campaign and the launch of Knorr ready-to-eat snack pots which provide consumers with a nutritious meal while saving time. Latin America grew double-digit and Europe grew mid-single digit as we developed targeted campaigns to inspire healthier diets. Africa grew double-digit, supported by fortified products that help address malnutrition in the region.

Dressings grew double-digit driven by price. With strong foundations in taste, sustainable ingredients and recyclable bottles, Hellmann’s grew double-digit with positive volume driven by Latin America. The performance was helped by further roll-outs of our vegan and flavoured mayonnaise range. We stepped up brand marketing investment to target high consumption occasions such as Thanksgiving, Christmas or the summer BBQ season. 2023 was our third consecutive US Super Bowl ‘Make Taste, Not Waste’ campaign with nearly 10 billion earned media impressions and we partnered with the NBA in Brazil.

Unilever Food Solutions, now 20% of Nutrition’s sales, grew double-digit with positive volume and price growth driven by our strong presence in Europe, North America and North Asia. Our focus on customer service and digital selling has enabled us to serve more operators and improve productivity. As the foodservice market in China fully reopened, we grew double-digit, helped by market-making innovation such as extending Knorr bouillon to more flavours, tapping into evolving consumer preferences.

Functional Nutrition returned to growth while growing penetration and market share through its core proposition for kids as well as premium innovation tailored for women and people with diabetes.

Underlying operating margin increased by 100bps, driven by gross margin improvement which funded an increase in brand and marketing investment.

Ice Cream (13% of Group turnover)

Ice Cream grew underlying sales by 2.3%, with 8.8% from price and -6.0% from volume. Volumes were impacted throughout the year by high price elasticities with consumers downtrading to value formats and less favourable summer weather versus last year, mainly in Europe. In the fourth quarter, price growth slowed significantly after double-digit price growth in the first half of the year.

Ice Cream had a disappointing year with declining market share and profitability. We continued to invest behind our Power Brands, including Magnum and Cornetto , which generated almost 85% of the Business Group’s turnover. These brands remain well positioned to meet consumers’ desire for superior and indulgent ice cream. Emerging markets delivered mid-single digit growth, driven by a strong performance in Turkey. In the fourth quarter, we made additional investments in promotions, particularly in North America, to address competitiveness and volume decline.

In the full year, there was a marginal decline in In-home Ice Cream (around 60% of the business), with volumes down high-single digit broadly offset by pricing. Inflation remained high and private label gained share as consumers looked for value propositions in this discretionary category. In the United States, our Talenti brand expanded from pints into new formats with mini gelato and sorbetto bars.

Out-of-home Ice Cream (around 40% of the business) grew high-single digit, driven by strong pricing partially offset by some volume decline. Our limited-edition Magnum innovation, Starchaser and Sunlover, performed well and became Magnum's biggest ever innovation.

Underlying operating margin declined 90bps, driven by lower gross margin as a result of continued cost inflation and volume deleverage outstripping pricing, while brand and marketing investment increased.

Related Links

  • 2023 Full Year Overview
  • View the latest results

Competitiveness % Business Winning measures the aggregate turnover of the portfolio components (country/category cells) gaining value market share as a % of the total turnover measured by market data. As such, it assesses what percentage of our revenue is being generated in areas where we are gaining market share.

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    A sustainable business strategy aims to positively impact one or both of those areas, thereby helping address some of the world's most pressing problems. Some of the global issues that sustainable business strategies help to address include: Climate change Income inequality Depletion of natural resources Human rights issues Fair working conditions

  9. Three Steps To Building A Sustainability Plan That Produces Business

    Create a sustainability plan. To tackle the most urgent environmental and social challenges facing the planet, businesses must first implement a sustainability strategy that is aligned with the ...

  10. 4 Impactful Sustainable Business Practices to Make a Difference

    Similarly, you can consider organizing a company-wide volunteer drive or day of giving, wherein your employees are encouraged to volunteer at local charities or for causes they're passionate about. 4. Rethink Your Supply Chain. If your business produces and sells a physical product, analyzing your supply chain has the potential to illuminate ...

  11. What Is Sustainability in Business?

    The goal of a sustainable business strategy is to make a positive impact on at least one of those areas. When companies fail to assume responsibility, the opposite can happen, leading to issues like environmental degradation, inequality, and social injustice.

  12. 5 Impactful Sustainable Business Practices

    Implement sustainable business practices with these simple tips. Explore Topics. Main Menu. Explore Topics. ... The first step is devising and implementing a sustainable business plan, strategy, and practice for your company. By identifying and integrating ESG practices, your business can help fight climate change and improve its brand image at ...

  13. 14 Key Steps To Building A Sustainable Business

    1. Understand What Customers Need

  14. How to Write a Sustainable Business Plan

    Here are a few more things to consider when developing an operational plan for your sustainable business: Internal and external sustainability communication planning. Internal communications and awareness-raising: Staff events centred around sustainability. Targeted information campaigns for specific initiatives.

  15. Creating a Sustainable Business Plan: Tips for Renewable Energy

    Once you've identified the resources and calculated the financial impact, it's time to start implementing sustainable practices. Create an action plan that outlines the steps you will take to transition to a more sustainable business model. This plan should include specific goals, strategies, and timelines. Evaluating Long-Term Goals. While ...

  16. Develop a Small Business Sustainability Plan

    A sustainable business will implement changes that reduce emissions, improve air quality, and identify products that reduce concerns about health and safety liability. This promotes higher standards of public health and environmental protection. Be a trailblazer.

  17. Building a Sustainable Business Model

    Implementing a sustainable business model can face challenges such as securing stakeholder buy-in, dealing with initial costs, and overcoming resistance to change. ... Once the goals are set, develop a detailed action plan outlining how they will be achieved. This may require investing in new technologies or retraining staff to adapt to new ...

  18. How to Create a Small Business Sustainability Plan

    Develop an Action Plan. Creating strategies to reach goals is an important part of developing a small business sustainability plan. Goals should be specific, measurable, achievable, realistic, and time-bound (SMART). For example, if your goal is to reduce energy consumption by 10%, you should create strategies that will help you achieve this ...

  19. How to create a Sustainability Plan for Your Business

    Business roadmap tools can help businesses implement their sustainability plan by breaking down each goal into realistically achievable steps. By helping outline the following, business roadmap tools make implementing a sustainability plan more feasible, efficient, and less likely to be derailed by unforeseen circumstances: 1.

  20. Implementing A Sustainable Business Strategy

    Imparting credible, tailored guidance in a self-validated and voluntary space. You can trust us to assist you every step of the way through your journey towards net zero. For more information on our services please contact us by phoning +44 20 3637 0055 or emailing us at [email protected].

  21. Sustainable business for SMEs

    Challenges in implementing a sustainable business plan for SMEs. Many business leaders want to develop sustainable business plans so they can play a role in helping the planet. In addition, they understand the advantages of doing so and that this is the future of business. However, like anything, some challenges prevent business owners from ...

  22. Green Entrepreneurship: Choosing and Implementing Sustainability

    These sustainable opportunities are excellent entry points for companies switching to a sustainable business plan. Start small and build up to becoming a fully sustainable company over time. Developing an Implementation Plan. To develop an effective implementation plan, you want to establish clear goals and sustainability objectives for your ...

  23. Sustainable Business Practices (Definition & 12 EXAMPLES)

    By implementing sustainable business practices! But What does a sustainable business practice mean? Sustainable business practices definition: actions allowing the company to create a positive impact on people, society, and the environment while also making a profit.

  24. Blog by Adam Gustafsson: Decarbonization unleashed

    That's why we partner with our clients to help them mobilize their capital towards a more sustainable world and the United Nations Sustainable Development Goals. And its why we've put sustainability at the heart of our own business too. Climate is a clear priority as we transition to a low carbon economy and plan to achieve Net Zero by 2050

  25. €1.6m project to support SMEs to make smart decisions about sustainability

    A group at Munster Technological University (MTU) are seeking business owners to take part in a new €1.6 million international project to help SMEs implement effective sustainability measures.

  26. PDF Mid-term Business Plan 2024-2026

    Mid-term Business Plan 2024 - 2026. Sustainability Management. Improving Group Governance pursuing Sustainability. Enhancing Group Collaboration. 1. and Synergies. 4. 6. 2. 5. 3. 1. 4. 5. 2. 3. 6 • Promote Group-wide activities via the ... by 2050 as a result of implementing the business strategy,including FPSO

  27. Improving financial performance and volume growth

    Growth Action Plan update. In October 2023, we set out a Growth Action Plan to drive improved performance and competitiveness. During the fourth quarter, we moved at pace to embed it across the business. The plan is divided into three elements but is underpinned by one simple premise: the need to do fewer things, better, with greater impact.

  28. 2024 Business Plan

    A Draft 2024 Business Plan was issued February 09, 2024, with a 60-day public comment period that will run through April 09, 2024. ... electrified high-speed rail system that meets the state's climate and sustainability goals. Letter from the CEO. ... and summarize the Authority's approach to implementing the system. Business Plans include:

  29. American Corner & Makerspace Astana on Instagram: " Join us for a live

    61 likes, 2 comments - americancorner_astana on February 14, 2024: " Join us for a live masterclass on "How to Plan and Start a Sustainable Business" happenin..." American Corner & Makerspace Astana on Instagram: "📊Join us for a live masterclass on "How to Plan and Start a Sustainable Business" happening on February 19th at 6:00 PM ...