Corporate sustainability is not just a question of environmental and social responsibility.
It has a great weight in companies' strategic decision-making. But what are the challenges of implementing a sustainable policy for your business?
You've probably read a lot about sustainability and the benefits it can bring to your business. But how can you implement it without compromising your company's revenue?
Corporate sustainability is the name given to the set of actions adopted by companies with the aim of acting consciously, always combining respect for the environment and the society in which they operate.
In addition to having great social and environmental importance, corporate sustainability helps the company to position itself positively in the eyes of its consumers. These are actions in which everyone involved wins.
But it is important to understand how sustainability should be adopted and implemented. As its name suggests, it should allow the business to sustain itself and survive, even when choosing to operate in a sustainable manner.
Business sustainability: do you know what it is?
Standing out in your market is perhaps one of the main indicators of success for a brand or company. And business sustainability plays a very important role in the search for this recognition.
Business sustainability is the set of policies and actions, economically sustainable and socially responsible, applied to a company's operations and products.
Business sustainability is closely linked to business and industry development. This development comes from the increasing growth of the economy around the world and this requires measures that protect social, environmental and economic aspects.
The growth of a business should be beneficial not only to its owners. The consumer and other people involved in the production and development of the company should also benefit. All this without harming the environment in which it is located.
Perhaps concern for the environmental aspect arose too late, given the negative impact that economic, industrial and commercial development had on history.
This is why corporate sustainability is such a hotly debated topic in the strategic planning of serious companies seeking strategic positioning in the market.
Sustainable development is one of the main concerns of the business world. Being concerned about the sustainable aspect of your business, in addition to its environmental and social impact, could be decisive for the future of your company and even the environment.
Of course, it is necessary to look at the economic issue and the cost that sustainable actions will have on a company's coffers. The return on investment and capital invested must be observed.
But what are the ways to ensure that your business acts in favor of social, economic and environmental development? And of course, without compromising your capital beyond what is necessary?
Corporate sustainability must also work for the company that uses its policies. Actions and decisions must also be sustainable for the company, ensuring its future.
Proving corporate sustainability results with integrated reporting
Sustainable development is not just about the present. Its goal is to create a future where the entire production chain from a company to its consumers continues to perform in the best possible way.
In this way, corporate sustainability is treated as an important factor of strategic decision within of the corporate environment in which it is used.
Ethically, it is the responsibility of a company's board of directors to be concerned and to position oneself sustainably before the market and its consumers.
Therefore, there is a need for control over corporate sustainability. Today, there are several types of reports and specific indexes to measure the degree of corporate sustainability of a business.
These reports are used to prove the results of sustainability actions and plans, in addition to guaranteeing investment in the area and the financial viability of the project.
These are reports that guarantee, for both the company and the market, the sustainable development of a business, service or product.
There is currently a growing movement towards the use of integrated reports within the strategic planning of sustainable actions.
The goal is to make this type of report increasingly relevant, both for the board of directors and other employees, as well as for society and potential shareholders.
The integrated report works as a verification tool, presenting in a joint and simplified way all the results of sustainable actions, both in the social, environmental and financial areas.
It is important to emphasize that specific reports should not be discontinued.
Prof. Nelson Carvalho, from FEA-USP, states that “Specific reports must continue to exist, but their data must be presented in a harmonious and coherent way“".
The concept of integrated reporting was launched in 2013, proposed by International Integrated Reporting Council (IIRC). Its aim was to simplify and democratize business communication, thus enriching the generation of business value.
To offer complete reports, both internally and to the external public, corporate sustainability uses several specific tools to measure results.
How to measure the impact of sustainable actions
There are countless factors to be considered and monitored when it comes to sustainable actions, from a company or industry.
Given its importance, pre-implementation planning is based on measurable data. This data will continue to be monitored even after the creation and implementation of sustainable policies.
Social and environmental issues must be taken into account. Not only through the sustainable bias, but also on a monetary scale.
Whether in terms of monitoring, analysis and reporting, or decision-making, the impact of these actions must be measured, predicting possible changes and investments.
By measuring the impact of sustainable actions, the board is able to use the results obtained strategically.
With these results in hand, they can provide complete data to marketing, shareholders and also society.
To monitor and measure this data, tools are available, created specifically for corporate sustainability monitoring. These tools help companies measure and calculate the results obtained by sustainable actions and policies, in addition to allowing the creation of specific reports.
The results obtained from monitoring allow us to prove the effectiveness of a business's sustainable measures in both quantitative and financial terms. This is done by calculating the ROI (return on investment) for a given action. This makes it possible to prove and create value through sustainable practices.
Measurement tools
There are some tools that serve for global recognition and scope, which help in measuring data, results of actions and sustainable practices in companies.
These tools issue integrated and differentiated measurable reports. This makes it possible to verify the results of adopting sustainable attitudes.
There are several effects and benefits that investing in sustainable policies brings to a business.
Such effects and benefits delivered through the reports show how sustainable actions will impact society around the company.
Learn about some of these measurement tools:
- FVTool (Financial Valuation Tool for Sustainability Investments): as the website itself says, FVTool helps the company create value through investments in sustainable actions.
FVTool was developed by IFC (International Finance Corporation), with the aim of helping companies identify the best investment portfolio in the area of sustainability. This way, they can offer maximum commercial and social value. - SEAT (acronym for Socioeconomic Assessment Tool): considered several times the world's best social impact measurement tool. SEAT is a set of socioeconomic assessment tools developed by Anglo American, a global diversified mining company and member of CEBDS.
SEAT introduces itself as a unique attempt by a large company to incorporate impact assessment into the ongoing management of a business's core operations.
In addition, Anglo American has comprehensive sustainable policy and approach solutions that can be checked here. - InVEST (Integrated Valuation of Ecosystem Services and Tradeoffs): family of analysis tools, developed by Natural Capital Project.
InVEST was created as a open source initiative, with the aim of mapping and valuing natural goods and services. With it, it is possible to evaluate quantifiable commitments and proposed actions, identifying areas where investment in natural capital can improve development and environmental conservation. It also enables the production of maps that model the results in biophysical, economic and social terms. This tool has 18 specific ecosystem service models designed for terrestrial, freshwater, marine and coastal ecosystems. - Trucost: created in 2000 and acquired by S&P Dow Jones Indices In 2016, Trucost was created to provide data, tools and insights necessary for companies and investors to create and present proposals for a transition to a low-carbon, resource-saving economy.
With Trucost, you can assess risks related to climate change, natural resource constraints, and broader environmental, social, and governmental factors.
Applying and disseminating corporate sustainability
Also read our Communication and Sustainability Guide
Business sustainability must be taken into consideration by companies of any size and area of activity.
The cost of continuing to invest in unsustainable activities may be low and more affordable at first, but it becomes unviable in the long term. Companies, however, still face challenges in disseminating sustainable actions and practices, from the decision maker to the employee.
It is true that the internal marketing for this type of communication has improved and advanced, but the cost associated with an unsustainable action is evident.
A company can invest in sustainable actions and be successful. However, if there are no internal efforts to communicate these results to the board of directors, employees, shareholders and even society, these investments and actions will not be noticed.
It is necessary to expand knowledge about sustainability as a whole, inside and outside the company.
Both internal and external communication, specifically about actions in favor of sustainability, must be carried out in a more pragmatic and less romanticized way. In this way, society will clearly perceive the company's sustainable action policies and their impact.
The board of directors itself will also be able to see that sustainability can, in fact, generate profits for the company and generate value in the market.
Combining measurable data from reports to create communication campaigns, reporting on the company's success and real sustainable performance also guarantees this recognition.
It also proves the need to adopt measurement systems and tools.
The difficulties of business sustainability during the crisis
It is clear that adopting sustainable policies and practices requires a considerable initial investment and the financial impact will be felt within the company. Even more so in times of crisis.
The crisis affects companies' financial availability, generating a major negative impact. Especially because some choose not to implement these sustainable actions. Which could be risky in the near future.
As already mentioned, the difficulty in disseminating knowledge of sustainable practices and policies is also detrimental. It implies low demand for the implementation of actions.
As a result, potential funders and those interested in implementing sustainable methodologies are unable to access those responsible for implementing them in companies. The result is a greater delay in the mass adoption of sustainable concepts.
Another factor, also arising from the crisis, is the high turnover of internal leadership and staff. Such issues affect the application and execution of corporate sustainability in the day-to-day running of companies.
This prevents the expansion of knowledge about sustainability. It also makes it even more difficult to promote sustainable culture and policies internally. These are necessary for the success of the business, even during the crisis.
Conclusion: the benefits of adopting sustainable practices
Adopting sustainable attitudes is not only ethically acceptable, but essential for the financial success of a company. enterprise.
Using sustainable practices, inside or outside the company, helps to increase the company's resilience in possible new crises. This is because it is in the global interest that sustainable attitudes keep the economy stable and functional.
Sustainability allows production factors to remain more constant over time. This is possible through investment in social and environmental sustainability.
The various sectors involved in the economy need to propose and embrace the implementation of sustainable projects and ideas. Studies and research are advancing in this area, which is great, but only theoretically.
Each study, research or experience in the sustainable area, which is applied in practice, is an advance in new technologies for a more humane and conscious economy.
The public and private sectors, as well as society in general, must come together in a continuous effort to implement new sustainable projects, studies and ideas.
Only in this way is it possible to guarantee a healthy and lasting future for future generations.
What about you? Have you already adopted sustainable practices in your company? Does your business already use measurement tools or integrated reports on the results of sustainable actions?
Tell us in the comments! Thanks for reading this far!
