Organisations should strive to collaborate directly with their suppliers on the best methods to disseminate sustainability requirements throughout their supply networks
In today's business dynamics, sustainability has emerged as a key indicator of an organisation's approach, effective function and growth. The focus on people, planet, and profits is the most viable strategy for any business. Furthermore, leaders are realising that they can use their businesses to make a positive difference in the world while still making a profit. With changing investor profiles, consumer demands, regulatory requirements, and brand identities, sustainability strategies are bound to be at the core of future business practices.
While many companies pledged sustainability as an important part of their social responsibility in 2022, Environmental, Social and Governance (ESG) goals will become even more of a strategic imperative for businesses in the coming years. The mantra of 'doing well by doing good' will indeed guide the new business paradigm.
Sustainability – A Great Business Opportunity
Key stakeholders in the enterprise, such as investors, consumers, peers and the government are increasingly putting sustainability at the centre of business strategies. There is a positive disposition toward companies that make environmental responsibility one of their primary business goals.
Employees and investors are increasingly drawn to organisations that are environmentally conscious. In fact, investors are becoming more conscious, looking for above market returns by investing in best-in-class sustainable businesses. Sustainability is an approach for minimizing the inevitable climatic and environmental disasters for consumers, who are the first to experience the consequences of global warming, environmental degradation, growing pollution levels and ecological disruptions caused by the exploitation of natural resources.
On the supply side, a study found that collaborating with suppliers, rather than simply monitoring them, is more effective in ensuring that they are engaging in green and sustainable practises. Hence, organisations should strive to collaborate directly with their suppliers on the best methods to disseminate sustainability requirements throughout their supply networks. Once the demand and supply chains have been streamlined, finances will follow.
According to a global survey, 83 per cent of C-suite executives and investment professionals are confident that sustainability programmes will increase the shareholder value in the coming years. This study further emphasises the importance of embedding sustainability strategies in business models.
A business model depends on the three elements that make it viable for development –
• Consumers who like what the organisation sells
• Suppliers who want to do business with the organisation
• Finances that allow the organisation to keep investing in its growth
An organisation that prioritises environmental sustainability as one of its core values can confidently appeal to all three of the aforementioned elements. A dynamic marketing team that puts sustainability initiatives and policies in focus and highlights the environmental commitment of the organisation can expect good returns for its green marketing methods through increased demand for the organisation's products or services.
Going Green to Grow in Unison
Along with business models that incorporate sustainability strategies, the emphasis should be on increasing social awareness and encouraging participation at all levels of society. This entails networking and collaborating with other environmentally conscious organisations, businesses, influencers and non-profits to promote sustainability. In the long run, this leads to the success of the business model based on embedded sustainability strategies.
There is an urgent need to incorporate environmental sustainability strategies into business models and promote them as part of the standard blueprint of a business model. The cohesive, sustainable development of the organisation becomes a natural outcome when all stakeholders are involved in supporting a shared, responsible goal.
(Sandeep Chandna is Chief Sustainability Officer, Tech Mahindra.)