The question in this column title is now obsolete. Instead of asking if sustainability makes business sense, it is now time to ask why sustainability makes business sense.
Over the last few decades, the concept of sustainability has evolved significantly. When the concept was first introduced, sustainability was simply an operational concern and included efforts from companies to reduce their environmental footprint or consider disposing their waste in a more ecofriendly manner or took measures to reduce waste. Over time, sustainability concepts evolved and become more strategic. Therefore, the second shift in sustainability involved innovation and tapped into the whole value chains. From cost reduction to innovation, what we see now is companies adapting to a circular economy, where sustainability decisions now pervade all decision making of the organization. Profits and being sustainable are one and the same and going forward business will just be run sustainably instead of incorporating sustainability into their operations as was earlier done.
A top executive from PwC says it is no longer about CSR or going green, but sustainability is hard-nosed economics. That should sum it all for companies looking at driving sustainability.
A Harvard piece gives the below example of how companies can take a lead and set example for others to follow and enabling them.
Puma, a sports footwear brand, a subsidiary of the PPR Group, a decade back announced that it would begin issuing an environmental profit & loss statement that will account for the full economic impact of the brand on its ecosystem. It commissioned one of the Big 4 companies to help develop the EP&L statement, and both companies hope to create a model robust enough to be adopted by others.
Managing how companies use natural resource is now as important as managing budgets and bottom lines. For sustainability to truly make sense and impact, it is important that products and services that causes the least harm are also priced the lowest. This is not unattainable. Each company thriving to be sustainable needs intent, a vision and data that drives these decisions that also have impact on the cost. Imagine a time when Investors will seek those with the highest responsibility instead of simply the ones with highest returns. That future is not too far off. Purpose driven leaders will be the harbinger of this change. Purpose driven leaders with a clear will and vision with a motivated team can not only inspire innovation and make impactful sustainable decisions but will also drive profitability through increased productivity.
Sustainability is the future not just for companies, but for societies, countries, and economies across the world. It is the only way to ensure that there is a future for future generations.
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