Introduction to Business Sustainability
Sustainability is the ability to maintain something at a specific rate or level for an extended period, often related to the societal aim of having humanity live in a healthy coexistence with the environment. In the business environment, sustainability has become a successful contributing factor that results in long-term prosperity for business firms. Business sustainability is, therefore, the approach of business that creates long-term value, considering the organization’s operations in the economic, social, and ecological environments, which determines the success and longevity of a firm (Bansal & DesJardine, 2014). In recent years, most businesses have considered sustainability a vital factor, which has proven to offer various benefits to them. Business organizations used to focus more on good business intentions and professional communication to secure a competitive edge in the industries. They found out later that these factors cannot offer long-term success, and business sustainability is a vital factor in reinforcing them, bringing fast and long-term success (Bansal & DesJardine, 2014). In recent years, the most successful business organizations in the world have made an immense commitment to business sustainability, which has rewarded them with global popularity. Despite the overwhelming benefits to business organizations, business sustainability has several shortcomings. Therefore, the sustainability of business to the environmental, social, and governance issues has promoted exponential growth and development of firms, whereby the most sustainable firm performs the best.
Literature Review
The Importance of a Sustainable Business
Business organizations that always consider instilling sustainability risks often become more successful in various measures, such as growth, increased profitability, and employee retention. All businesses want to attract the best workforce for better financial performance (Dyllick & Muff, 2016). A business that permanently protects the environment and its employees by instituting sustainability strategies protects them from incidences that can damage its brand. Business sustainability contributes to building an organization’s positive reputation, which is vital in attracting customers and maintaining them, consequently contributing to more profitability (Dyllick & Muff, 2016). Customers and employees would not want to be associated with organizations that always exhibit scandals within their environments. They instead feel more secure and respected in firms that present the best social ethics and morality. Organizations that always do good to the world by inculcation sustainability attract the best and most motivated workforce, which is made up of individuals who always consider more than just a paycheck and always do better in financial success. For example, companies such as Starbucks and PepsiCo adopted new strategies for involving their employees in sustainability programs, improving their operations drastically. Therefore, business sustainability gives organizations a competitive advantage in their respective industries, leading to immense growth.
Business sustainability practices have opened the door for realizing a growing global market for sustainable goods. Business organizations that have pushed for the manufacture of more sustainable products have significantly influenced most customers who have created a sustainable environment-driven market (Ford & Despeisse, 2016). In recent years, there has been an exponential increase in global sustainable consumers willing to transform their consumption habits to reduce their adverse environmental impacts. Statistics have proved that about 70% of global consumers are at will to consume sustainable products as a substitute for other goods (Ford & Despeisse, 2016). The general sales of sustainable products have also increased by a remarkable margin. For example, the millennial generation has presented the best market for sustainable products, with their willingness to pay more for products claimed to have a social responsibility and those made using sustainable ingredients (Dyllick & Muff, 2016). Companies that have focused on sustainable production are in a position to realize growth at unprecedented scales.
Business sustainability creates a cooperative action that can create a remarkable change. Impacting a change in a meaningful way as an individual may feel isolating, overwhelming, and almost impossible. Therefore, companies work to collaborate through sustainability projects where each contributes its innovative, powerful and successful team to collectively solve the social, environmental as well as political issues that are pressing the world the most (Nikoloyuk et al., 2010). These companies always attract government intervention where they work with the government to assist each other in addressing the issues, a move which has led to various firms experiencing unprecedented success. For example, the most commonly used ingredient for consumer products, palm oil, raised concern over its production. The industrial production process of palm oil has been associated with immense emission of greenhouse gases, which consequently contribute to adverse climatic change (Nikoloyuk et al., 2010). A significant consumer goods producer, Unilever, a British-Dutch multinational company, devoted itself to using strictly certified palm oil extracted from purely sustainable sources (Nikoloyuk et al., 2010). Over time, various competitors of Unilever joined hands with them, and governments and non-governmental organizations supported them to campaign for the adoption of strictly sustainable palm oil. This great deal has contributed to their worldwide prosperity (Nikoloyuk et al., 2010).
Advantages of Business Sustainability
Business sustainability presents several advantages to the business and the environment altogether. A wide range of benefits arises due to sustainability strategies and the undertaking of business organizations. The advantages can either be fiscal or economic. The financial benefits are derived from the long-term impacts of sustainable development by business organizations (James, 2015). Budget savings are realized from the reduced expenditure of business firms, such as in water and energy costs and infrastructure development and maintenance.
Similarly, there are reduced long-term liabilities which are reached through the costs of savings and reduced operating costs. Economic activities increase and property values boost fees, revenues, and taxes (James, 2015). The overall fiscal stability is improved significantly in times of uncertainty regarding water and energy costs, and other resources have contributed to more stability. Companies like Tesla Inc. have been on the frontline of electric car manufacture, reaping substantial financial profits for their sustainable motor vehicle production.
Similarly, economic benefits have been realized through business sustainability. The general growth of the economy in terms of the improved bottom line has increased, following the competitiveness and vitality of business organizations. The savings of businesses are easily realized through reduced expenditures on commonly consuming factors such as water, energy, and other resources. Business sustainability has contributed to creating employment and other opportunities following competitiveness that emerges from sustainability practices, benefiting societies, and giving businesses the most productive and motivated workers (James, 2015). Sustainable businesses contribute to a greater social responsibility, which benefits the communities, gaining more support for the businesses, which enhances the people’s goodwill. Sustainable businesses contribute to extraordinary employee satisfaction, reducing employee turnover. As pointed out earlier, employees in sustainable businesses get happier for their work and become more devoted, leading to increased productivity, therefore, exponential growth.
Disadvantages of Business Sustainability
On the same note, business sustainability also presents several disadvantages. Pushing for business sustainability can threaten profitability as higher production costs always become eminent concerning sustainability. Therefore, companies are left with a dilemma choice, whether to increase the cost of products to consumers or make the extra costs a part of the company’s expenses (Niţă & Ştefea, 2014). The first choice might lead to a loss of customers, and the alternative leads to low-profit margins. Companies operating under the pressure of implementing sustainability and competition might be forced to intentionally or unintentionally claim fraudulent practices of environmental friendliness, such as citing their products to be purely sustainable. The false claims are called “greenwashing,” which may lead a company to experience credibility harm. Most upcoming companies always find it hard to make assurances concerning sustainability and might fail to secure a position to take meaningful actions toward it (Niţă & Ştefea, 2014). Most companies moving towards sustainability always encounters issues concerning product traceability and transparency. Tracing the whole picture of a product, from the raw materials to the sales process, is challenging; therefore, building sustainability becomes hard. Small and upcoming businesses always find it challenging to initiate sustainability activities, as some are cost-intensive (Niţă & Ştefea, 2014). Nevertheless, the benefits of business organizations upholding sustainable operations surpass the shortcomings. Companies should therefore gauge their sustainability capabilities to avoid adverse impacts and would see growth.
Conclusion
Conclusively, business organizations have grown exponentially, which has enhanced outstanding sustainability in the environmental, social, and governance sectors. Businesses considered factoring in the most sustainable practices have witnessed success in various measures. Businesses that always commit to doing well in society attract the best workers and more customers as they feel honored by the positive reputation. Business organizations that commit to sustainable development always have a competitive edge against their competitors. The market for sustainable consumer goods has drastically increased globally due to the influence of companies that introduce their customers to sustainable products, where many consumers prefer paying more for sustainable products. Sustainability can promote cohesiveness by collaborating with several firms and government agencies to achieve a common sustainable objective. Unilever is an example of a global company that has shown its seriousness with sustainability and is also one of the most successful businesses. Various advantages are presented by the sustainability of businesses to the businesses themselves and the communities. These advantages range from fiscal, economic, and social aspects that result from sustainability practices. On the same note, business sustainability has also proven to have several disadvantages. The most challenging factor in growing a sustainable business is the capacity to initiate activities, which are always cost-intensive.
References
Bansal, P., & DesJardine, M. R. (2014). Business sustainability: It is about time. Strategic Organization, 12(1), 70-78.
Dyllick, T., & Muff, K. (2016). Clarifying the meaning of sustainable business: Introducing a typology from business-as-usual to true business sustainability. Organization & Environment, 29(2), 156–174.
Ford, S., & Despeisse, M. (2016). Additive manufacturing and sustainability: an exploratory study of the advantages and challenges. Journal of cleaner Production, 137, 1573-1587.
James, M. L. (2015). ACCOUNTING MAJOR PERCEPTIONS OF THE ADVANTAGES AND DISADVANTAGES OF SUSTAINABILITY AND INTEGRATED REPORTING. Journal of Legal, Ethical and Regulatory Issues, 18(2), 107.
Nikoloyuk, J., Burns, T. R., & De Man, R. (2010). The promise and limitations of partnered governance: the case of sustainable palm oil. Corporate Governance: The international journal of business in society.
Niţă, C. G., & Ştefea, P. (2014). Cost control for business sustainability. Procedia-Social and Behavioral Sciences, 124, 307-311.
write