Sustainability

Sustainability as defined by the UN World Commission is “development that meets the needs of the present without compromising the ability of future generations to meet their own needs”. This means that current consumption levels regarding energy, supplies, natural resources, and others must be monitored carefully and used sparingly. As newer generations enter the economy they are paying more attention to their carbon footprint left behind. Environmentally friendly products and sustainable goods are sought after for their reduced footprint and environmental impact.

Entrepreneurs were the first to recognize the need for these products and began designing sustainable replacements. So, how can small businesses and entrepreneurs begin implementing sustainability in to their business model? 

The first step in the process is determining clear sustainable objectives. This includes eco-efficiency plans, management infrastructure, marketing programs and strategic initiatives. 

The next step is engaging with business partners, working with them to condense supply chains and innovate new processes that can reduce consumption. Starting conversation about sustainability with consumers can gauge the need for environmentally friendly goods. The more informed customers are on these products the more likely they are to purchase and care about their impact. This leads to weaving sustainability into the organization, informing employees and vendors of the need for sustainable goods. Creating a change starts from within the company and can’t truly succeed without educated employees, suppliers, vendors, management, and all other encompassing parts of the company. 

Lastly, creating the right conditions for sustainable innovation is important. As a business, do not consider integrating innovation-related sustainability plans as risky. Instead, drive the company’s innovation by looking for trends in emerging economies and other industries, creating partnerships with colleges to fill any knowledge gaps within the organization, and developing incentives to reward employees who suggest ways to advance recycling, save energy, improve product sustainability and other ideas (St. Bonaventure 2016). 

The UN has created a set of developmental goals to help guide businesses. These 17 Sustainable development goals were created to guide good decisions that can positively impact the environment. There are a few specific ones to highlight: 

– Goal 8, decent work and economic growth, 

– Goal 9, industry, innovation and infrastructure, and 

– Goal 12, responsible consumption and production. 

These goals align closely with business and provide guidelines for improving current impacts. Sustainability within a company is an asset, it provides value and a competitive edge against other companies that are lacking.

Sustainability can also be a strategy in the market. As mentioned, many consumers are looking for sustainable products and this can lead them to purchasing certain products specifically for this reason. There are different ways to incorporate sustainability into a business model. For example, some companies adopt environmental, water, or waste management systems to exploit cost efficiencies and thus improve their bottomline. This method starts at the base level, working sustainability into production. 

Another method that has been adopted is plastic free or using recycled materials in packaging. This may not be the cheapest option but this can add value to the product for select consumers. Over the past decade, sustainable practices have been implemented into many major corporations. Adopting sustainable practices has become the norm in many corporations, but this does not detract from the competitive advantage it can give. Releasing information on sustainability efforts within the company and being transparent to consumers can increase revenues as well as bring other benefits. 

Highlighting green initiatives and technology as well as social impacts promoted by the company is a great way to earn customer loyalty and good public relations. A common misconception is that sustainable practices cost more, but that could not be further from true. Yes, the implementation and transition can cost money, but long term there will be profit created. Sustainable practices have been shown to increase long term profits and maintain competitive advantages in the world of small businesses (Gagnon 2013).  While some practices are becoming a necessity from either consumer preference or governmental regulations, companies with a real dedication to tackling the issue are capable of creating a competitive advantage for themselves through innovative and environmentally driven plans.

Small businesses are essential to the economy containing just over 50% of all jobs in the United States (Warren 2016). The problem lies in that many of these small businesses are struggling to make it to 10 years in the business. Two thirds of all small businesses close within 10 years (Barbosa 2020), a sustainable mindset is a long term thinking method that can help remedy this issue. Through studies it has been shown that those with concerns for the environment were more likely to think in long term strategies than their counterparts. Small businesses play a large part in the economy and improving the longevity of these businesses through sustainability will play a large part in stopping corporations from taking over small businesses.

Overall, social and environmental responsibility are important factors in business. Not only adhering to guidelines but pushing past expectations can lead to success. Sustainability provides better working conditions, new customer segments, good public relations, improved waste management, and can also lower costs if done correctly. Working sustainability into existing models is essential to improving a business and keeping up with others.

 

Griffin Unruh, Marketing Intern

5th T Innovation Group

 

References:

Barbosa, M., Castañeda-Ayarza, J. A., & Ferreira, D. H. L. (2020). Sustainable strategic management (GES): Sustainability in small business. Journal of Cleaner Production, 120880

Gagnon, M. A., Michael, J. H., Elser, N., & Gyory, C. (2013). Seeing green in several ways: The interplay of entrepreneurial, sustainable and market orientations on executive scanning and small business performance. Journal of Marketing Development and Competitiveness, 7(3), 9-28.

Nadim, A., & Lussier, R. N. (2010). Sustainability as a small business competitive strategy. Journal of Small Business Strategy, 21(2), 79-95.

Pradhan, P., Costa, L., Rybski, D., Lucht, W., & Kropp, J. P. (2017). A systematic study of Sustainable Development Goal (SDG) interactions. Earth’s Future, 5(11), 1169-1179.

St. Bonaventure. (2016, November 30). How to Integrate Sustainability Into Your Business. Retrieved January 22, 2021, from https://online.sbu.edu/news/2016/11/30/how-integrate-sustainability-your-businessWarren, G. E. (2016). Small business strategies for sustainability beyond 10 years.

 

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