implementing sustainable business plan

• Ir a navegación principal
• Ir al contenido principal

Sustainability Plan: How it can be designed and implemented in your company

by APLANET , APLANET

May 12, 2023

In this article, we’ll investigate what a sustainability plan is, how it relates to the Sustainable Development Goals (SDGs) and how its implementation can help your company in a number of ways. We’ll also take a look at the benefits of adopting a sustainable approach to your business and we’ll give you a step-by-step guide to creating and implementing an effective sustainability plan in your organisation. So, accompany us on this sustainability journey and discover how a sustainability plan can boost your company’s long-term success and resilience.

What is a sustainability plan and why is it so important?

63% of Spanish workers believe that sustainability policies, such as the one we’re exploring here, are a determining factor. These are the results from a study recently published by Compromiso RSE (in Spanish), a specialist CSR website. As we can see, ESG criteria (i.e. environmental, social and corporate governance) are growing in importance.

Defining a sustainability plan

A sustainability plan is a guide that sets clear, measurable and realistic objectives to improve an organisation’s sustainability. In addition, it needs to work in harmony with the UN’s Sustainable Development Goals (SDGs), which are aimed to be achieved by 2030. Generally speaking, it should follow the European Union’s lead in reducing the company’s carbon footprint.

It is worth highlighting the fact that the EU stands out from other organisations of its kind in that it implements realistic and specific policies. What’s more, the plan needs to include all workers, directors, clients and investors linked to the business. By ensuring these key components are incorporated, companies all over the world will be able to effect real change.

Benefits of implementing a sustainability plan

The European Environment Agency has been urging us to adopt plans to combat this pressing issue since 2015. In fact, it declared that Europe is far from reaching its target of “living well, within the limits of our planet”. For this reason, it is now more important than ever that we fully understand the advantages of these kinds of guidelines:

• Improved corporate image . Four out of every five large companies in Spain increased their sustainability investment in 2022, according to Deloitte (in Spanish). One of the main reasons for this was the need to show a commitment to the planet. The same study revealed that 74% of people are worried by the role that companies are playing.
• Reduced operating costs . Sustainable policies have an overwhelmingly positive effect on the value chain in the medium and long term. This is mainly a result of optimising the use of resources and reducing waste. Increasing your company’s energy efficiency is a great way to ensure a promising future.

A step-by-step guide to creating a sustainability plan

Nowadays, every company can choose exactly how to adopt its own sustainability plan . However, it is worth noting that there are a number of regulations that must be observed, which contain some important aspects. Of these, the most important to consider are state regulations which are then transposed into law in EU member states, such as:

• Spanish Law on Cooperation for Sustainable Development and Global Solidarity (2023). This forces companies and institutions to also focus efforts on combating hunger and creating healthy environmental conditions.
• Spanish Sustainable Economy Law (2011). This called for businesses to join together in the fight against climate change. It marked an important milestone in this regard.

Step 1: Perform a materiality analysis

First of all, it’s vital that you know how to create a materiality analysis . This will help you infinitely when deciding on which actions should take priority and other relevant aspects. You will be able to optimise the investments your company makes in terms of time, as well as human and financial capital.

In order to prepare a materiality analysis, you’ll need to provide in-depth details of your corporation’s impact from an environmental, social and economic viewpoint each year. In other words, you’ll describe what your company is doing to bring about real change. Next, you’ll have to find out which resources are available to you and try to make them more sustainable.

Step 2: Identify sustainability goals and objectives

Your chosen goals must meet certain requirements so that they can be effective:

• Specific and detailed . Do away with vague proposals and make firm commitments that are in line with societal demands. In particular, this refers to issues such as minimising your carbon footprint and cutting down on natural resource wastage.
• Measurable . It’s crucial that you assess your progress by using relevant metrics. To do this, establish a series of indicators, as you’ll see in step four. Some of the more fitting ones include the percentage of GHG emissions reduction and carbon footprint offsetting.
• Assessment and monitoring . Objectives must be subject to a critical evaluation during the planning stage. Once they have been implemented and you’ve started to work towards them, ask an independent body to come and check that they are actually being met.

Step 3: Drawing up strategies and actions for your sustainability plan

It goes without saying that any action you decide on must be focused on meeting the goals that you set in the previous step. This is the only way to bring about your desired changes and minimise obstacles and difficulties . As such, they need to form part of a detailed guide which all members of your team, and even society as a whole should be involved in creating.

Some strategies have a far-reaching influence that goes way beyond the sector itself. Give priority to these kinds:

• Optimising energy efficiency (in line with the guidelines of the Institute for the Diversification and Saving of Energy [IDAE]).
• Effectively and intelligently managing waste, whilst preventing the misuse and contamination of natural spaces.
• Integrating an eco-friendly policy in the production chain, such as tourism sustainability plans .

Another cornerstone that offers many possibilities is collaboration between companies. In any case, it is worth broadening your scope and also working alongside bodies and NGOs that are dedicated to improving companies’ sustainability.

Step 4: Setting and monitoring key performance indicators (KPIs)

Some of the most common KPIs that you can include in your company’s sustainability plan are:

• Renewable energy penetration . Make full use of the grants offered by public bodies such as IDAE. They tend to be focused on solar energy, whether photovoltaic, thermal or hybrid installations. The latter in particular is starting to show great promise and potential.
• Energy efficiency in production . Industrial activity is one of the main causes of GHG emissions. Adopting measures that reduce electricity consumption is of utmost importance. To help achieve this, the most effective KPIs you can use are those that concentrate on company energy consumption.

One of the key ways in which APLANET can be of service is by helping you set indicators that are sure to contribute to reaching the goals you’ve set. This is a fully personalised service that is adapted to the needs of your company, and our real-time data management system will make sure you stay on the right track. This ensures that your investment is being used effectively.

Step 5: Communicating and participating with stakeholders

When adopting an environmental sustainability plan , it’s a good idea to identify your different stakeholders. This usually divides your company, the people that comprise it and the different organisations that interact with it into groups. The most effective plans are those that involve all parties affected:

• Investors , who are responsible for providing the financial capital required to carry out the company’s sustainability plan .
• Clients , who, as we mentioned earlier, are mostly willing to pay more. What matters to them more than anything else is that they are supporting an eco-friendly solution.
• Shareholders , who may belong to other companies or entities focused on CSR. These provide invaluable help when searching for shared goals.

Step 6: Reviewing and continuously improving your sustainability plan

This final step never really comes to an end, as it just keeps going as a cycle. We recommend establishing a methodology for constantly reviewing, monitoring and developing your plan. Therefore, you’ll need two professionals to take care of this. One of them needs to be part of the company’s senior management, while the other should be an independent specialist.

Together, and with representatives for all stakeholders , they will embark on the review process. Following this, they will report back on the progress to those who have invested in the plan. The aim of this is to show exactly how their time and money have been used, as well as the milestones that have already been achieved and those that are still in progress.

This is when you’ll have to sit down and review each of your KPIs one by one in order to compare the degree to which each of them have been achieved and determine whether or not the company is heading in the right direction. If, on the other hand, it is deemed to be going in the opposite direction, there’s no need to worry: this step will allow you to detect the causes and further develop your sustainability plan .

Conclusions and recommendations for creating an effective sustainability plan

We are firm believers that this needs to be a three-pronged approach that tackles the economic, environmental and social scope of the company in order to provide a true reflection of its current situation. This also includes ensuring that the needs of its clients, investors and society as a whole are being met.

• Get in touch with experts in this field to create a network of collaborators, both internal and external. This will give you a valuable and constant flow of ideas.
• Report on your progress and challenges . Your company should provide frequent updates on its achievements and shortcomings. Don’t be afraid to ask for advice.
• Use supporting software . One example is the program developed by APLANET, which allows you to manage all your information efficiently and give you complete control over traceability.

Create a sustainability plan that meets your company’s goals with the help of APLANET. With our software, you can collect data and manage your indicators and information all in one place, while also generating your own reports. Request a demo .

Subscribe to our resource hub to keep up to date with the latest trends in the sector

Other Blogs

Corporate Environmental Policy: How to Successfully Implement  it

ESG Goals: How to Set Them Effectively

SBTN: How to Implement the Science Based Targets for Nature

Disclosure vs Performance ESG Standards with Carlota de Paula Coelho from B Lab & EFRAG | ATALK 28

Circular Economy & Reducing Footprints with Pol Fàbrega form Wallapop | ATALK 27

Risk Management and Due Diligence in the ESG Era | Robert Adamczyk | ATALK 24

BCG Henderson Institute Newsletter: Insights that are shaping business thinking.

Social Impact

/ article, four steps to sustainable business model innovation.

By  David Young and  Marine Gerard

This article is part of an ongoing series that describes the concept of “Sustainable Business Model Innovation” (SBM-I) and how companies are putting it to use.

You may have noticed that every day there’s another announcement about companies making new climate commitments, asset managers outlining their plans for ESG integration, or regulators proposing new disclosures or extending producers’ responsibilities. Corporate coalitions like the World Economic Forum International Business Council and the US Business Roundtable endorse a more stakeholder-inclusive corporate capitalism while industry coalitions work to solve their members’ shared sustainability challenges. And employees and consumers call on employers and brands to take environmental and social challenges seriously. All of this makes clear that we have entered a new era for business, one in which sustaining competitive advantage requires companies to transform their business models for sustainability.

Company leaders need a broader, more systemic understanding of these dynamic sustainability challenges and the ways that their companies can play a part in addressing them. Fortunately, as some farsighted businesses are discovering, the most powerful opportunities for profitable innovation are embedded in these same challenges. Let’s consider three examples.

The first is Telenor, the leading Norwegian mobile operator. In 2008, having entered Pakistan three years earlier, it joined forces with the microfinance bank Tameer. With support from the Bill and Melinda Gates Foundation, the International Finance Corporation (IFC), and the Consultative Group to Assist the Poor (CGAP), they launched a new service called Easypaisa, providing mobile-based financial services to the unbanked and underbanked. By the end of 2019, Telenor Microfinance Bank (the result of Telenor’s acquisition of Tameer) boasted the largest branchless banking service in Pakistan, growing its Easypaisa mobile wallet user base to 6.4 million, its depositor base to 17 million, and the transactions volume through its agent network to about PKR 1 trillion (approximately $6 billion). This service has significantly advanced financial inclusion in Pakistan and established Telenor as a major telecom enterprise there.

Or consider Ajinomoto, a global food and biotech company based in Japan. It produces seasonings, sweeteners, and pharmaceuticals. As part of its 2030 vision and growth strategy to “help one billion people worldwide lead a healthier life,” Ajinomoto is exploring a new "personalized nutrition for health" business. Combining its core nutrition expertise and new technology, the company aims to provide customers with digitally enabled diagnostics, analytics, and product recommendations. These would guide people toward the kind of well-balanced amino acid intake that boosts cognitive and physiological functions and helps prevent aging-related diseases like dementia—a prominent societal issue in Japan.

Another example is Indigo Ag, a US-based agricultural technology startup that was valued at $1.4 billion in 2017. In 2019, the company launched a service called Indigo Carbon to help incentivize farmers to remove carbon from the atmosphere and sequester it in their soil. The service provides technologies and recommendations for regenerative agriculture practices. The ultimate goal is to pay farmers for each ton of carbon captured and then sell certifications to companies looking to offset their carbon footprints. By supporting a transparent carbon credit marketplace, Indigo Carbon creates benefits for all participants: the farmers, the companies buying the offsets, the planet, and its own business.

What do these three companies have in common? Regardless of industry, geography, or size, they (and dozens of others like them) are innovating business models—building on and expanding beyond their core assets and capabilities—to address significant environmental and societal challenges in their local contexts. In this way, they create new sources of value and competitive advantage for their business.

The Four-Step Innovation Cycle

In our research, we have studied more than 100 cases of companies that are practicing what we call “Sustainable Business Model Innovation” (SBM-I). We have found that the most advanced of these companies, the “front-runners,” combine environmental, societal, and financial priorities to re-imagine their core business models and even shift the boundaries of competition.

One might expect the front-runners to consist mainly of smaller enterprises, branded through their visible social or environmental missions. But most of them are actually global corporations that have gradually developed new business models that create both sustainability and long-term competitive advantage.

The core practice for SBM-I is an iterative innovation cycle, shown in Exhibit 1. With each round, the company gains scale, experience, and market presence for its initiative; these reinforce both the business advantage and the environmental and societal benefits generated.

1. Expand the Business Canvas

So how can you bring this cycle to life in your company? The first step is to develop a rich understanding of the broader stakeholder ecosystem in which the company operates and of the environmental and societal issues and trends that might affect this ecosystem. As part of this diagnosis, you explore the potential impacts of ecosystem dynamics and issues on your business model. This will allow you to identify a range of business vulnerabilities and opportunities tied to environmental and societal issues. Some of these are good starting points for focused SBM-I.

More specifically, we recommend the following:

• Expand the business canvas by mapping the wider ecosystem of stakeholders and societal issues in which the business operates. Ask yourself: Who are the key stakeholders in the system? What are the material environmental and societal issues and trends? How do stakeholders and environmental and societal issues directly or indirectly impact all the different parts of the business model?
• Stress-test the business model (current or potential) within this broader map. How do stakeholder dynamics and environmental and societal issues constrain or hold back your business model? Where do limitations in the system create vulnerabilities for the business model? 
• Extrapolate trends and build materiality scenarios. Look at today’s environmental and societal trends and think about how they might evolve over time. In addition, build scenarios to envision completely different, more extreme versions of the future (as opposed to linearly projecting trends) to stretch your thinking. And then, under these scenarios, ask yourself: How might environmental and societal issues change over time? How might stakeholders’ perceptions of and attitudes toward those issues shift? What would be the effects on the system map and the business model?
• Explore scaling up the business. Imagine the business model at different scales of activity. Suppose your business grew three- or five-fold over the next few years. Where might breaking points or opportunities arise? What happens to the externalities the business creates? How do risks and opportunities change?
• Identify innovation opportunity spaces or “strategic intervention points” (SIPs). These are points at which targeted action or innovation could alter stakeholder dynamics, positively impact the environmental or societal issues, reduce the vulnerabilities of the business model, or even create new business value opportunities.

Look for difficulties, gaps, and risks to arise from the analysis. For example, your company’s own lines of business might contribute to the environmental or societal issue and impact the growth of the business today. Also, don’t just rely on your own thinking. Cultivate outsiders who can provide complementary and thought-provoking perspectives.

In a recent interview , Christine Rodwell, former vice president of business development cities at Veolia, explained that “to walk the talk on sustainability, companies need to listen to their external stakeholders. They should create a committee of critical friends (across public, social, and academic sectors) who will challenge them and advise them to develop business solutions that create meaningful environmental and societal benefits.”

To understand what expanding a business canvas looks like in practice, consider the hypothetical example of a consumer packaged goods (CPG) manufacturing company engaged in a real-world dilemma: the toxic effect of plastic packaging on natural habitats, particularly in the world’s oceans. About 18 billion pounds of plastic waste enter the world’s oceans each year. This is equivalent to five grocery bags of trash on every foot of coastline. Plastic pollution causes extensive damage to life on land and at sea, including toxic contamination, strangulation, blockage of digestive passages, and endocrine-related reproductive problems for people as well as animals. Concerns about this problem reached a tipping point in the mid-2010s, as studies confirmed the damage.

As industrial leaders in this field know all too well, the complexities of gathering, cleaning, sorting, recycling, and reusing plastics have made it costly and difficult to address this issue. Companies that step forward with effective and financially viable solutions will not only gain enormous goodwill but are also likely to build high-growth businesses.

But where do you start? And where do you focus innovation efforts and investments to tackle such a complex, multifaceted environmental issue? Reflecting the SBM-I cycle approach, Exhibit 2 shows what a stakeholder-centric systems map for the plastics issue could look like from the point of view of a CPG company. This map uses basic systems dynamics principles to capture the most significant interrelationships among the CPG company, the environmental issue at stake, and key stakeholders (consumers, policymakers, civil society, waste collectors and recyclers, and plastics manufacturers). The arrows show patterns of cause and effect. For example, when urbanization increases, so does the cost of landfilling.

The power of this diagram (versus more traditional, linear depictions) comes in part from its ability to reveal where delays, rebound effects, or tipping points might be active in the system. For instance, the node labeled “environmental and recycling awareness” will influence changes in several consumer habits—but only after a delay. Such awareness cannot be seen as a quick-fix solution, but over time it will help change the dynamics of the entire system.

The boxes in the exhibit represent the opportunity spaces or strategic intervention points (SIPs) that become evident during this step. In this example, a few of the SIPs for our CPG company are as follows: shifting to new packaging formats; setting up plastic collection initiatives; lobbying for government programs like deposit return systems; joining precompetitive coalitions that invest in recycling infrastructure and new recycling technology; and educating and nudging consumers to consume and dispose of packaging in more sustainable ways.

2. Innovate for a Resilient Business Model

The first step in the cycle will have led you to identify the opportunity spaces that hold potential for both financial returns and societal value. You must then transform your business model, or imagine an entirely new one, so that you can seize these opportunities. In this second step, you innovate and develop new aspects of that new business model. You are seeking to bypass current constraints, break tradeoffs, deploy technological advances, and perhaps integrate activities that were previously kept separate. You should ideate a new business model to integrate and reinforce both business advantage and environmental and societal benefits.

In related research , we introduced and defined seven archetypal business models that optimize for both societal and business value. Here we illustrate how they might apply to the plastics waste challenge.

• Own the origins. Change production inputs to generate societal and environmental benefits. For instance, HP is working with waste collectors in a partnership with the First Mile Coalition in Haiti. HP has invested $2 million in a local facility to produce clean, high-quality recycled plastics that can then be used as input in an array of HP personal computer products and ink cartridges, reducing the environmental footprint of those products. Four years after its launch in 2016, the program had already diverted approximately 1.7 million pounds (771 metric tons) of plastic materials (equivalent to more than 60 million plastic bottles) from waterways and oceans and created income opportunities for 1,100 Haitians (with 1,000 more expected in coming years). Thanks to this and other efforts, HP boasted the world’s most sustainable PC portfolio in May 2020. This included, for example, the HP Elite Dragonfly, the first PC manufactured with ocean-bound plastic.
• Own the whole cycle. Create environmental and societal impact by influencing the product usage cycle from cradle to grave. Since the 1990s, Grupo AlEn, a leader in home cleaning products based in Monterrey, has invested and scaled up its in-house plastic recycling operations to become one of the largest plastic recyclers in Mexico. AlEn now operates 30 routes and 6,200 collection points in the Monterrey area, recycling more than 50,000 tons of PET and HDPE per year. This business expansion has given AlEn an exclusive supply of recycled plastics, enabling it to create distinctive, greener packaging at a relatively stable cost.
• Expand societal value. Expand the environmental and societal value of products and services, and capture value in pricing, market share, and loyalty. In 2018, PepsiCo acquired Sodastream, the world’s leading at-home sparkling water maker. Building on this technology, PepsiCo has begun to bring packaging-free, customizable beverages to workplaces, college campuses, and airports. This new business positions PepsiCo to win in the increasingly personalized beverage market and to save an estimated 67 billion single-use plastic bottles by 2025.
• Expand the value chains. Innovate by layering onto the business ecosystems of customers or of partners in other industries. In Chile, Algramo’s innovative bulk distribution system replaces single-use plastic with RFID-equipped reusable containers. Since 2013, the startup has scaled up its business by partnering with more than 2,000 family-owned stores across Santiago. They dispense affordable food and staple products “al gramo” (Spanish for “by the gram”) and reward customers for reusing containers. Algramo’s model not only helps the environment but also benefits the urban poor, who previously had to pay high prices for small quantities of products, in wasteful, individually wrapped packets.
• Re-localize and regionalize. Shorten and reconfigure global value chains to bring societal benefits closer to home. In Brazil, BASF has developed a solution to a local issue: waste certificate fraud. Some collectors and recyclers claim credits for recycled materials that they didn’t actually process or that aren’t actually recycled. Partnering with Kryha, a digital blockchain studio, and Recicleiros, an NGO that supports waste collectors and their cooperatives, BASF developed an online platform called ReciChain. This platform enables accurate and secured data tracking throughout the recycling value chain, to improve the quality of operations and guarantee the validity of manufacturers’ certificates and claims.
• Energize the brand. Encode, promote, and monetize the full environmental and societal value of products and services, and use that leverage to engage customers in novel ways. The innovative manufacturing company 3M released the latest version of its Thinsulate insulation product in 2019. This is “100% recycled featherless insulation” made from recycled plastic bottles. Building on this accomplishment, 3M worked with the high-end apparel brand Askov Finlayson to create “the world’s first climate-positive parka,” producing 3,000 parkas in 2019 as an inspiring demonstration project.
• Build across sectors. Create new business models in collaboration with government and nonprofit organizations, particularly in rapidly developing economies, to improve the business ecosystem and societal proposition. Together, SC Johnson and the social enterprise Plastic Bank have opened nine recycling centers in Indonesia to collect and recycle plastic before it reaches the ocean. This partnership also plays an important societal role, helping families in impoverished areas who collect plastic waste by buying it at a premium from them. In 2019, the partnership announced a ground-breaking, three-year deal to create 509 plastic collection points, including locations in Thailand, the Philippines, Vietnam, and Brazil. In aggregate, these points are expected to collect 30,000 metric tons of plastic over three years—the equivalent of stopping 1.5 billion plastic bottles from entering waterways and the ocean. On the business side, among other benefits, this collaboration will secure a steady supply of high-quality recycled plastics and help SC Johnson meet its 2025 packaging goals.

These seven archetypes can be starting points for developing your own business model innovation. Adapt them, and combine several together to develop a more comprehensive solution to environmental and societal issues relevant to your enterprise. Interestingly, among the 102 in-depth SBM-I cases that we explored in our research, 75% of the SBM-I leaders (the “front-runners”) combine three or more archetypes. This contrasts with less than 30% in the two other groups: the “ecosystem leaders” and the “initiative leaders,” whose efforts tend to be more narrowly focused.

In addition to exploring the possibilities inherent in these seven archetypes, take inspiration in the lessons learned from SBM-I front-runners. Front-runners see sustainability as a source of competitive advantage. In line with their long-term strategies, they continuously iterate and fine-tune their business models, always seeking to deepen their beneficial impact. They explicitly seek to understand and fix the root causes of environmental and societal challenges—as some of our plastics recyclers did, addressing not just the environmental concerns but also the social aspects of the issue. These companies also use digital technologies wherever possible, to break economic constraints and unlock new solutions. They practice an intensive form of stakeholder engagement: partnering with nonprofits and governments, operating across organizational boundaries, and pooling resources with other enterprises, even competitors. Last but not least, they experiment with new forms of value capture, such as blended financing sources, to de-risk and amplify their own investments. After all, notwithstanding their environmental and social track records, the front-runners are still in business to show a profit and return investment to shareholders.

3. Link to Drivers of Value and Competitive Advantage

In the third stage of the cycle, test, iterate, and refine your business model ideas or concepts (from the second step) to ensure that they will yield the environmental and societal benefits intended, and that the benefits will translate into value and advantage for the company. A business with weak profit margins cannot invest in innovation to amplify and scale environmental and societal benefits.

The objective of this step is to keep assessing and reengineering the business model, so that it continually improves the resilience of the business and the benefits to society. The following questions, based on our research into the characteristics of robust, resilient business models , can help you navigate this part of the process:

• Can the business model scale effectively? Can it be replicated across all your business units or the markets you serve, without diminishing returns?
• Will the business model differentiate your brand or product and make it more competitive in the marketplace?
• Will it reduce the risk of commoditization, by being hard for others to imitate? Will its distinctiveness help you retain some control over pricing?
• Can it leverage network effects? For example, can it attract the kinds of customers and suppliers that make other customers feel compelled to join?
• Does the business model harness business ecosystems—including the larger industry, the value chain, and everyone who interacts with your products, services, and practices—for advantage and sustainability?
• Does the business model naturally create meaningful environmental and societal benefits?
• Will the environmental and societal benefits remain durable against changing trends over time, even as the business model scales up?
• Does the business model increase returns to shareholders as well? Are the financial benefits linked to the environmental and societal benefits in some significant way?
• Finally, does the model animate your company’s purpose? Does it boost engagement and loyalty between the company and its employees, customers, investors, and other stakeholders?

Exhibit 3 shows how a company might assess its business model against these nine questions. The resulting footprint reveals how robust and resilient the business model is and identifies where it could be improved to unlock further advantage and value for the company.

The fuller the footprint, the better. Among the front-runners in our sample, 90% score “high” on at least five of the nine attributes, as opposed to only 30% in the other groups. The front-runners also show superior average scores on every single dimension.

4. Scale the Initiative

The full potential value of sustainable business model innovation is achieved only when the new business model is brought to scale: engaging people in the company, across the supply chain, in the company’s networks, and in its ecosystems to expand impact and advantage.

To accomplish this, companies can leverage three enablers. First, partnerships with other organizations, within or across industries or sectors, can help a company pool resources, fill capability gaps, and unlock new markets. Almost 90% of the front-runners have broadened their efforts this way. Second, digital technology (leveraged by 80% of the front-runners) can help create new distribution channels that reach previously unserved or underserved populations at a fraction of the cost of their predecessors. Third, companies that adopt SBM-I tend to develop cultures and leadership values that attract and engage people inside and outside their boundaries. Indeed, all of the front-runners explicitly mention the environmental and societal impact they seek to deliver in their vision, purpose, or mission statements.

Consider the example of BIMA, a mission-driven provider of mobile-delivered health and insurance services that started operations in Ghana in 2010. Its innovative digital technology platform and its partnership model (which comprises telecom providers, mobile money providers, and insurance underwriters) have enabled it to rapidly scale its innovative business model. BIMA now provides affordable, easy-to-manage life and health insurance to more than 35 million low-income customers across ten emerging economies. BIMA’s customers have access to its services through their mobile phones. Many of them are lower income families who earn less than $10 a day. About 75% of them are obtaining insurance for the first time in their lives. These societal benefits are at the core of BIMA’s strategy and mission; the company’s website says explicitly that its “purpose is to protect the future of every family.”

The four-step innovation cycle we propose in this article offers companies a way to systematically integrate and solve for social and business value in one business model. Most of the companies that begin this journey are already skilled at optimizing for business advantage. They may already recognize the importance of taking into account their environmental and societal impacts. With this approach, they are now ready to take on innovation for a business that optimizes for both business and social value.

The BCG Henderson Institute is Boston Consulting Group’s strategy think tank, dedicated to exploring and developing valuable new insights from business, technology, and science by embracing the powerful technology of ideas. The Institute engages leaders in provocative discussion and experimentation to expand the boundaries of business theory and practice and to translate innovative ideas from within and beyond business. For more ideas and inspiration from the Institute, please visit our website and follow us on LinkedIn and X (formerly Twitter) .

Managing Director & Senior Partner, BCG Henderson Institute Fellow

ABOUT BOSTON CONSULTING GROUP

Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. BCG was the pioneer in business strategy when it was founded in 1963. Today, we work closely with clients to embrace a transformational approach aimed at benefiting all stakeholders—empowering organizations to grow, build sustainable competitive advantage, and drive positive societal impact.

Our diverse, global teams bring deep industry and functional expertise and a range of perspectives that question the status quo and spark change. BCG delivers solutions through leading-edge management consulting, technology and design, and corporate and digital ventures. We work in a uniquely collaborative model across the firm and throughout all levels of the client organization, fueled by the goal of helping our clients thrive and enabling them to make the world a better place.

© Boston Consulting Group 2024. All rights reserved.

For information or permission to reprint, please contact BCG at [email protected] . To find the latest BCG content and register to receive e-alerts on this topic or others, please visit bcg.com . Follow Boston Consulting Group on Facebook and X (formerly Twitter) .

What’s Next

Read more insights from BCG’s teams of experts.

The Secrets of Sustainability Front-Runners

Sustainable companies need sustainability strategies. The front-runners are fundamentally reimagining their businesses to turn sustainability into a core business advantage.

How to Tell If Your Business Model Is Creating Environmental and Societal Benefits

In today’s context, a resilient and competitive business model must optimize for both business and environmental/societal value. Gauge your model against the six dimensions of E/S impact.

How to Tell If Your Business Model Is Truly Sustainable

Use a nine-point robustness and resilience framework to determine if your business model can provide ongoing competitive advantage.

Why the New Competitive Advantage Demands Sustainability

Companies can no longer simply focus on maximizing total shareholder returns. To win, they must hone sustainable business models.

The Quest for Sustainable Business Model Innovation

Building on traditional BMI and systems thinking, a new approach to sustainability helps companies move from reporting and compliance to action and advantage.

Browser not supported

This probably isn't the experience you were expecting. Internet Explorer isn't supported on Uber.com. Try switching to a different browser to view our site.

← Back to learning hub

How to create a sustainability plan for your business

Last updated: January 31, 2024

From the rainforests of the Amazon to the corporate boardrooms of Silicon Valley, the call for sustainability is louder than ever. Now the world is looking toward businesses, both large and small, to step up and play their part in building a sustainable future. The pathway to integrating sustainability into business isn’t always clear, however. That's where a well-crafted sustainability plan comes into play.

From understanding the pillars of sustainability and setting precise goals to executing your plan, we’ll guide you through what you need to know. That way, you can create a sustainability plan that makes an impact.

What is a sustainability plan?

A sustainability plan is a roadmap that guides businesses to integrate economic, social, and governance (ESG) considerations into their operations. Those pillars contribute to lasting and powerful corporate sustainability.

Having a plan empowers businesses to be proactive, support the long-term viability of the organization, and contribute to a better environment. A sustainability plan includes policies, procedures, actions, and metrics that align the business’s objectives with sustainable practices.

What are the benefits of having a sustainability plan?

Fosters innovation.

By aiming to reduce environmental impact, organizations often find more-efficient ways to operate. Then they experience organizational shifts that promote innovation . This can lead to the development of new, sustainable products or services that set them apart from the competition. It can also free up time and resources for other aspects of the business.

Reduces operational costs

Sustainability and cost-efficiency often go hand in hand. Energy-efficient appliances and machinery consume less power. Similarly, waste reduction initiatives can cut disposal costs. You may find many various ways to help your organization keep costs down. Research from McKinsey found that by decreasing resource costs, a company can increase its operating profits by up to 60% .

Enhances brand reputation

Consumers are becoming increasingly conscious of environmental issues. Businesses that demonstrate a commitment to sustainability can significantly enhance their brand reputation and boost their bottom line. According to the 2020 McKinsey US consumer sentiment survey, more than 60%-70% of respondents said they’d pay more for a product with sustainable packaging. This shows that consumers care about brands that make these efforts, even if it means paying a premium.

Increases customer loyalty

Sustainability can be a powerful driver for customer loyalty. Many consumers today prefer to purchase from companies that align with their values. By showcasing your sustainability efforts, you can attract and retain a loyal customer base that values your commitment to making and supporting change. A report from the Capgemini Research Institute shows that 52% of consumers say they share an emotional connection with products or organizations that they regard as sustainable.

Attracts top talent

Employees increasingly seek out employers that demonstrate social and environmental responsibility. That’s why a robust sustainability plan can be a powerful tool for attracting and retaining top talent. Research from Adobe shows that sustainability initiatives are top of mind for employees, and 43% of people believe that launching sustainability practices will improve workplace culture.

Boosts investor confidence

Investors are also recognizing the value of sustainability, with many prioritizing investments in companies that demonstrate a commitment to environmental and social responsibility. Research from PwC shows that almost 80% of investors say ESG played an important role in their investment decision-making.

As demand for sustainable solutions and emission-reduction efforts increases, organizations across the globe will continue to face challenges. With sustainability insights, Uber for Business clients have a clearer picture of their company’s progress.

Before you begin: key components of sustainability plans for business.

Putting together a business sustainability plan requires strategic thought, collaboration, and commitment. The concepts below can help businesses lay a solid foundation for their sustainability efforts.

Identify areas for sustainability

When you create your corporate sustainability plan, it’s important to consider each of the 3 pillars: environmental, social, and governance. Each has unique elements to keep in mind.

Environmental

Environmental sustainability is centered on preserving the planet's natural resources and minimizing the environmental footprint of our activities. In the business world, the drive toward environmental sustainability comes from the recognition that economic activities can have significant environmental consequences, from resource depletion to climate change.

By implementing environmentally sustainable practices, businesses can help mitigate these impacts. They may, for example, be able to contribute to preserving biodiversity, maintaining ecological balance, and helping future generations inherit a healthy planet.

Social sustainability focuses on human rights, labor standards, and social interaction. This pillar recognizes that businesses have a responsibility to respect and uphold good values when considering the people whom they affect and serve. This includes treating workers fairly, ensuring safe and inclusive workplaces, promoting diversity and inclusion, and contributing positively to the community.

Companies can use their influence to promote social progress, such as advocating for human rights or fighting discrimination. When they do this, businesses contribute to creating an equitable society for everyone.

Governance plays a pivotal role in moving an organization toward its sustainability goals. It outlines the structure, rules, and practices that make sure the organization's sustainability actions happen effectively and transparently. Good governance provides the backbone that supports a company’s sustainability efforts. It’s crucial for risk management, strategic decision-making, and accountability.

Here’s a breakdown of what governance will typically look like:

Sustainability oversight

This involves the board of directors or top management keeping an eye on sustainability issues. They’re responsible for setting sustainability policies, ensuring compliance, and integrating sustainability into the company’s strategy.

Sustainability reporting

Good governance allows transparency in a company’s sustainability performance. This might involve regular sustainability reporting, where a company discloses its environmental, social, and governance impacts to stakeholders.

Stakeholder engagement

A wide range of voices should be heard and considered when making decisions about sustainability. Regular consultations with stakeholders like employees, customers, local communities, and shareholders can make all the difference here.

Ethics and compliance

Companies with strong governance structures have clear codes of conduct and mechanisms for reporting and addressing unethical behavior. This is key to keeping accountability at the forefront of your efforts.

How to create a sustainability plan

Do you want to make progress on sustainability efforts and don’t know where to start? Use this sustainability plan template to drive your organization’s success.

1. Set goals and objectives

Once you identify areas for improvement, it’s time to set clear, specific, and measurable sustainability goals and objectives. If, for example, a company wants to reduce its carbon footprint, its objective could be something like this: “Reduce carbon emissions by 25% over the next 5 years.”

To achieve it, the company could set several smaller, more immediate goals, like to transition to renewable energy sources, to improve energy efficiency in operations, or to invest in carbon offset projects. For social sustainability efforts, an organization might set a goal to donate a certain percentage of annual profits to local community initiatives or to improve workforce diversity and inclusivity.

Remember to tie these objectives to key performance indicators (KPIs). This could include data like kilowatt-hours of energy used, tons of waste produced, or number of women and minorities in leadership positions. Measure what matters in order to focus your organization on making progress.

Also, be sure your objectives align with the larger business strategy. This alignment will prevent sustainability from becoming an afterthought and embed it as a component of your organization’s success.

2. Formulate a communication strategy

A sustainability action plan doesn’t happen in a vacuum. Effective communication with all stakeholders is important. This step involves identifying whom you need to connect with, selecting appropriate communication channels, and crafting messages that correctly convey your choices and changes.

Stakeholders may include employees, customers, suppliers, investors, and the community at large. Each group may require a different communication strategy. For example, you might inform employees through internal newsletters, while you might reach customers through more public channels.

In your communications, highlight the objectives of your sustainability plan, the steps you’re taking to achieve those objectives, and the benefits. Where possible, tell a story. Narratives often resonate more deeply than data, especially when you’re just beginning to track your efforts.

Research from PwC shows that 76% of consumers say they’ll stop buying from companies that treat the environment, their employees, or their community poorly. Don’t risk losing out on business because your organization isn’t communicating its values and efforts.

3. Execute and regularly update

Execution makes your plan come to life and requires active commitment. To implement the sustainability plan, everyone plays a role, whether it’s leadership making strategic decisions or employees turning off lights and computers at the end of the day.

During execution, regular tracking and review of your KPIs is critical. This allows you to measure the progress of your plan and ensure that you’re on track to meet your objectives.

Keep in mind, however, that your sustainability plan should not be rigid. As your business evolves, your plan needs to evolve with it. Whether due to changing business goals, emerging technologies, new scientific findings, changing regulations, or shifts in societal expectations, you’ll likely need to make adjustments over time.

Sustainability plan example: a model to inspire you

Let’s consider a telecommunications company facing challenges like high energy consumption with large data center operations and electronic waste from outdated equipment. The company might set objectives to reduce its energy consumption by 35% and e-waste by 60% over the next 5 years.

3 potential strategies to support these sustainability goals

To meet its objectives, the company could start with one of these strategic initiatives:

Invest in energy-efficient infrastructure : The company could invest in more efficient cooling systems for its data centers or use virtualization technologies to reduce its number of physical servers. Additionally, it could transition to renewable energy sources to power operations.

Implement an e-waste recycling program : The company could start an e-waste recycling program to ensure that all outdated or broken electronic equipment is disposed of responsibly. This could apply to purchases from its customer base and equipment that its employees use.

Promote device longevity : The company could design and build its products to last as long as possible, reducing the need for frequent replacement. This could involve using more durable materials, offering repair services, or creating software updates that keep older models running.

Keeping everyone in the loop

Next, the organization could consider how to get the word out and communicate these initiatives to employees and stakeholders.

The company could also implement resources and tools that support sustainability , then train its staff on energy-efficiency best practices and the importance of sustainability within the organization. This helps to maintain the consistency of its efforts.

When it comes to sharing the plan and being transparent, the company could communicate its commitments and progress toward these sustainability objectives through publishing updates on its website, sustainability reports , and social media posts.

Adapting to the times

The final thing the company needs to keep in mind is that a sustainability plan isn’t something you can set and forget. Instead, it must plan for change.

The organization could establish a review and update process for the sustainability plan. This process would involve reassessing the plan at regular intervals and considering new challenges or opportunities that emerge. This way, the sustainability plan continues to drive the company toward its sustainability goals.

It’s your turn to transform sustainability plans into action

A robust sustainability plan is no longer an extra for businesses—it’s a vital tool to navigate the complex interplay between economic, social, and environmental considerations in modern operations.

Uber for Business can help your organization meet its sustainability goals

By leveraging our platform, you can help reduce your company’s carbon footprint. Here’s a closer look at how this works:

Company-wide emissions reporting : Get clear climate metrics—including estimated total CO₂ emissions, total low-emission trips, and average CO₂ per mile—so that you can measure and share your company’s achievements.

No- and low-emission rides : Uber Green, our electric vehicle (EV) and hybrid ride option, offers no- or low-emission rides, available to your employees in the Uber app.

Greener options for delivery with group orders : Feed company morale while improving delivery efficiency. Group orders are an easy, sustainable choice that grows your impact by requiring fewer trips for delivery.

No matter where you are on your sustainability journey, gathering the right tools and systems to support your efforts can make all the difference. To find out more about how Uber for Business can help you reach your sustainability goals, explore our platform .

The platform

Get the best of Uber, for business—including improved cost controls and compliance.

Expense integrations

Save time with automatic expense reconciliation

Sustainability

Get clear climate metrics such as total low-emission trips and average CO₂ per mile.

We make your health and safety top priorities.

Employee benefits

All the advantages of Uber your employees already love, for business.

The dashboard

It all starts here - manage travel and meal programs with easy to set cost controls and more.

Business profiles

Help your employees connect with your company’s Uber for Business account.

Request rides and deliveries on behalf of customers.

Purchase Uber gift cards in bulk for simplified giving.

Uber Health

Reimagine the way patients access care.

Offer business-class perks with an Uber One company membership.

Cover the cost of rides and meals, and pay only when used.

By use case

Holiday gifting

Celebrate the holidays with vouchers and gift cards

Business travel

Oversee your travel program with the flexibility and reporting you need.

Employee commute

Set up a stress-free commute program for your employees.

Event transport

Get attendees to and from your next event.

Employee shuttles

Offer group transportation for daily commutes, cross-campus dashes, and more.

Courtesy rides

Request rides for customers and guests with ease, even if they don't have the Uber app.

Meal programs

One platform gives you the control to provide meals in multiple ways.

Recruit, retain, and reward your employees with Uber perks they want.

Corporate gifting

Exec management

Request rides and meals for leaders.

By industry

Elevate customer service with on-demand rides.

Improve health outcomes and the patient experience by enabling better access to care.

Hospitality

Delight your guests with rides and meals.

Financial services

Keep your employees moving and your clients happy.

Offer rides and meals to employees and constituents.

Customer support

Customer service

Get in touch with us or quickly find answers to top concerns.

Help Center

For admins and coordinators to browse tips and topics.

Product updates

Check out recent updates we’ve made across our platform.

Learning hub

Explore product education, case studies, and industry insights.

Customer stories

See how innovative companies work with us.

Get the latest news from Uber for Business.

• Contact sales

• Consultancy
• Evaluations

How to prepare a Sustainability Business Plan

• 10 min read

A sustainability business plan should integrate environmental, social, and economic considerations into the strategic planning and operations of the business. Here are the key elements a sustainability business plan should include:

• Executive Summary: This section provides an overview of your business and your sustainability plan. It should be compelling and attract the interest of your audience.
• Business Description: A brief summary of your business including what you do, how you do it, the industry you’re in, and the markets you serve.
• Sustainability Vision and Goals: Define the sustainability goals for your business. This could include environmental goals such as reducing greenhouse gas emissions, social goals such as improving worker safety or community involvement, and economic goals such as improving operational efficiency or reducing costs. You should also state your broader vision for sustainability and how it aligns with your business model and brand.
• Environmental Impact Assessment : Analyze your business’s current environmental footprint. This can include your energy use, waste production, water use, and other environmental impacts. This assessment will provide a baseline from which you can track progress.
• Social Impact Assessment: Consider the social impacts of your business, such as labor practices, community involvement, diversity and inclusion, and human rights issues.
• Economic Impact Assessment: Review your company’s economic sustainability, including your business model, financial health, and risk management practices.
• Sustainability Strategies and Actions: Outline specific strategies and actions your business will take to achieve its sustainability goals. This could include new technologies, operational changes, partnerships, or other initiatives. You should also explain how these strategies align with your business objectives.
• Performance Indicators and Targets: Define clear, measurable indicators of progress towards your sustainability goals, and set specific targets for these indicators.
• Implementation Plan: Detail how you will implement your sustainability plan, including the roles and responsibilities of different members of your organization, any necessary training, resources required, and a timeline for implementation.
• Monitoring and Reporting: Describe how you will monitor progress towards your sustainability goals and how you will report this progress to stakeholders. This could include internal reporting mechanisms as well as public reporting such as sustainability reports or disclosures to investors.
• Review and Continuous Improvement: Plan for regular reviews of your sustainability plan to assess progress and make necessary adjustments. This should be a dynamic process that allows for continuous improvement.
• Risk and Opportunity Assessment: Lastly, it’s important to identify any potential risks and opportunities associated with your sustainability plan. This will help you anticipate any challenges and maximize the benefits of your sustainability efforts.

Remember, sustainability is about the long term, so your plan should be designed with this in mind. It should be flexible enough to adapt to changing circumstances and should be regularly reviewed and updated to ensure it remains effective and relevant. Measuring non-financial items in a business plan is crucial as it provides insight into aspects of the business that, while not directly tied to financial performance, can significantly impact the overall health and sustainability of the business. Therefore, tracking them can provide valuable insights for decision-making and strategy development.

Table of contents

How to transfer co2e emissions into costs or benefits in a business plan, how to transfer governance related risks into costs or benefits in a business plan, how to transfer social topics into costs and benefits in a business plan.

Transferring CO2e (carbon dioxide equivalent) emissions into costs or benefits in a business plan can help businesses understand the financial implications of their environmental footprint and support decision-making processes. Here’s how you can do this:

• Carbon Pricing: Assign a price per metric ton of CO2e emitted, which can be based on carbon markets, carbon taxes, or internal carbon pricing (if your company has set one). Carbon pricing mechanisms vary by region, so research the applicable rates in your area.
• Calculate CO2e Emissions: Estimate your company’s annual CO2e emissions by considering direct emissions (Scope 1), indirect emissions from purchased energy (Scope 2), and other indirect emissions from the value chain (Scope 3). You can use emission factors provided by organizations like the IPCC, EPA, or other regional authorities to estimate emissions for various activities.
• Monetize Emissions: Multiply the total CO2e emissions by the carbon price per metric ton to determine the total cost of your emissions. This monetized value represents the financial risk associated with your emissions and can be incorporated into your business plan.
• Evaluate Reduction Strategies: Identify potential emission reduction strategies, such as energy efficiency improvements, renewable energy adoption, or waste reduction initiatives. Estimate the cost of implementing these strategies and the potential reduction in CO2e emissions.
• Calculate Cost Savings and Benefits: Assess the financial benefits of implementing emission reduction strategies by considering factors such as operational cost savings, reduced carbon pricing liability, and potential revenue from carbon credits or renewable energy certificates. Compare these benefits to the costs of implementation to determine the return on investment (ROI) for each strategy.
• Incorporate Costs and Benefits into the Business Plan: Integrate the monetized costs and benefits of CO2e emissions and reduction strategies into the financial projections and risk assessments of your business plan. This can help you make informed decisions about which strategies to prioritize and how they will impact your bottom line.
• Highlight Non-financial Benefits: While monetizing CO2e emissions is important, it’s also crucial to consider non-financial benefits such as enhanced brand reputation, improved employee morale, and reduced regulatory risk. Incorporate these qualitative benefits into your business plan to provide a more comprehensive understanding of the value of emission reduction initiatives.

By quantifying the costs and benefits associated with CO2e emissions and reduction strategies, businesses can make more informed decisions about their environmental impact and incorporate sustainability considerations into their overall business strategy.

Governance-related risks refer to the potential pitfalls associated with the way a business is managed and controlled. These can include regulatory compliance, ethical conduct, transparency, decision-making processes, board effectiveness, and shareholder relations, among others. Translating governance risks into costs and benefits within a business plan can be complex due to the largely qualitative nature of these risks. However, it’s possible to approximate and project potential financial impacts. Here’s how you can approach this:

• Identify Governance Risks: Start by identifying the key governance risks your business faces. These might include regulatory non-compliance, lack of transparency, poor decision-making processes, or ineffective board leadership.
• Quantify Potential Costs: For each risk, estimate the potential cost if that risk were to materialize. This could be in the form of fines for non-compliance, loss of business due to reputational damage, increased cost of capital due to investor mistrust, or loss of productivity due to poor decision-making.
• Evaluate Mitigation Strategies: Identify strategies to mitigate each governance risk. These might include improving compliance systems, enhancing transparency, implementing better decision-making processes, or investing in board training and development.
• Calculate Implementation Costs: Estimate the cost of implementing each mitigation strategy. This could include direct costs like investment in new systems or training, as well as indirect costs like time and resources.
• Assess Potential Benefits: For each mitigation strategy, assess the potential benefits. These might include reduced likelihood of fines, improved reputation, lower cost of capital, or increased productivity.
• Incorporate Costs and Benefits into the Business Plan: Integrate the potential costs and benefits of governance risks and their mitigation strategies into your business plan. This should inform your risk management strategy, financial projections, and operational planning.
• Highlight Non-financial Benefits: Beyond direct financial impacts, good governance practices can offer significant non-financial benefits. These might include improved stakeholder relationships, increased trust and credibility, and better strategic decision-making. Although these benefits may be harder to quantify, they should still be incorporated into your business plan as they can significantly impact your business’s long-term success.

By integrating governance risks into your business planning, you can proactively manage these risks and make more informed decisions about your governance structures and practices. Remember, good governance isn’t just about avoiding risk—it’s also about creating value for your business and its stakeholders.

Social topics, also known as social factors or social impacts, refer to the effects that a business’s activities have on its stakeholders, including employees, customers, communities, and society at large. They encompass a wide range of issues, including labor practices, human rights, health and safety, diversity and inclusion, and community engagement. Incorporating social topics into the costs and benefits of a business plan can provide a more comprehensive understanding of a business’s societal impacts and their potential financial implications. Here’s how you can approach this:

• Identify Key Social Topics: Identify the social topics that are most relevant to your business. These might be determined by your industry, geography, stakeholder expectations, or other factors.
• Quantify Potential Costs: For each social topic, estimate the potential costs if the associated risks materialize. For example, poor labor practices could lead to increased turnover, decreased productivity, or fines and lawsuits. Similarly, a lack of diversity and inclusion could lead to missed market opportunities, reputational damage, or regulatory penalties.
• Evaluate Mitigation or Improvement Strategies: Identify strategies to mitigate social risks or improve social performance. This could include investing in employee training and development, implementing diversity and inclusion initiatives, improving health and safety practices, or engaging more actively with local communities.
• Calculate Implementation Costs: Estimate the cost of implementing each strategy. This could include direct costs like investment in new programs or initiatives, as well as indirect costs like time and resources.
• Assess Potential Benefits: For each strategy, assess the potential benefits. Improved social performance can lead to a range of benefits, such as increased employee engagement and productivity, enhanced brand reputation, improved customer loyalty, and stronger community relations. Some of these benefits may result in direct financial gains, while others may contribute to long-term value creation.
• Incorporate Costs and Benefits into the Business Plan: Integrate the potential costs and benefits of social topics and their mitigation or improvement strategies into your business plan. This should inform your financial projections, operational planning, and strategic decision-making.
• Highlight Non-financial Benefits: In addition to the financial impacts, consider the non-financial benefits of addressing social topics. These can include enhanced stakeholder relationships, improved risk management, and alignment with societal expectations and trends. While these benefits may be harder to quantify, they can significantly contribute to your business’s long-term success and sustainability.

By integrating social topics into your business planning, you can proactively manage social risks, leverage social opportunities, and contribute to societal well-being while also enhancing your business’s performance and value creation.

Finally, by integrating double materiality into your sustainability business plan, you can ensure that you’re considering both the impacts of ESG factors on your company and the impacts of your company on society and the environment. This can help you manage risks, leverage opportunities, and contribute to sustainable development while also enhancing your company’s performance and value creation. Contact us to prepare your Sustainability Business Plan.

Related Links:

• Scope 1,2,3 emissions vs Co2 footprint
• Pricing for Co2 Emissions
• Increase the readability of your corporate reports
• What can a company do to reduce energy consumption?

Hi my loved one I wish to say that this post is amazing nice written and include approximately all vital infos Id like to peer more posts like this

Leave a reply Cancel reply

Your email address will not be published. Required fields are marked *

Save my name, email, and website in this browser for the next time I comment.

Sign me up for the newsletter!

Georg Tichy

Georg Tichy is a management consultant in Europe, focusing on top-management consultancy, projectmanagement, corporate reporting and fundingsupport. Dr. Georg Tichy is also trainer, lecturer at university and advisor on current economic issues. Contact me or Book a Meeting View Author posts

Related Posts

How to define ESG-Targets under the CSRD

The European Sustainability Reporting Standards (ESRS) provide a comprehensive framework for companies within the scope of the Corporate Sustainability Reporting Directive (CSRD) to report on… 

Transition Finance

The EU’s recommendation for Transition Finance for banks regarding ESG issues is part of the broader Sustainable Finance Package released on June 13, 2023. It… 

The 94 Topics of the Materiality Analysis of CSRD

The materiality analysis is the process by which the undertaking determines material matters and material information to be reported on in its sustainability statement. The… 

Develop your sustainability business strategy

Outcome-based benchmarks and clear action plans will put your organization’s sustainability strategy on the path to success.

By Tensie Whelan & Chisara Ehiemere

March 12, 2024

After your company has identified the key ESG issues and stakeholders that should shape its business strategy, the next step is to develop and activate that strategy. Source: Shutterstock/Black Salmon

Note: This is part of a series about how companies can integrate sustainability into their core business strategies. The previous articles in the series describe how to assess your company’s sustainability strategy , how to identify material ESG factors and stakeholders and how to engage those stakeholders .

Once your company has completed its materiality matrix by identifying which ESG issues and stakeholders should shape its business strategy, here are the next steps to develop, benchmark and activate your sustainability strategy. 

First, brainstorm what risks and opportunities might be associated with the material ESG issues you have identified and then explore how you might tackle them. Let’s assume that water use is a big challenge for your business. You will first need to understand where the risks are in your supply chain and explore potential solutions. For instance, if you use a lot of water in manufacturing facilities in regions with water quantity and quality issues, and local water supplies in those regions are threatened by extreme weather events and poorly managed water withdrawals, then you should explore strategies such as watershed conservation and protection, as well as technologies and procedures that reduce your own water footprint. Levi Strauss , for example, set 2025 water use targets for manufacturing based on local water stress to increase the number of products made in facilities that recycle and reuse water.

Brainstorm what risks and opportunities might be associated with the material ESG issues you have identified and then explore how you might tackle them.

You must then define the future goal that you would like to achieve and how you can get there through defining milestones and objectives. What is your baseline — how much water are you using now? How much water reduction is necessary to be truly ambitious relative to peer standards, how much is feasible, and what is your action plan? Are you developing the opportunities as well as tackling the risks? For example, the development of a new water-conservation technology might provide a competitive advantage with customers or become a product that you sell to competitors. To seize that opportunity, you must understand your current water-use performance, benchmark against competitors, explore technologies that can reduce water use, and reach out to key stakeholders such as NGOs, community groups and regulators that are working on water issues in your operating regions. Using the previous example, Levi Strauss set a goal of reducing freshwater use in manufacturing by 50 percent in high water stress areas by 2025 from a 2018 baseline.

Third, build the ESG goals and strategies into your business plan. Continuing the example of water use in your factories, you will likely have overall goals related to the optimal functioning of those factories, including operational costs, quality of goods produced and capital investments planned. Improving those factories' performance on water should become part of your overall goals associated with manufacturing. Investing in better water management can reduce costs (less water in, less wastewater out, thereby reducing the likelihood of factory shutdowns due to lack of water) and improve performance (better community reputation and relationship with regulators, etc.). 

Map your industry's strategies

Each industry has a set of commonplace and cutting-edge sustainability strategies as well as a set of practices associated with each strategy. Across the value chain for each strategy, there will be a set of practices that a company can pick to drive better societal and financial performance. Companies can identify varying levels of effort for different strategies; they may wish to perform in the middle of the pack for an issue they see as table stakes, but take a leadership role that drives innovation in an area ripe for competition. For example, a meat company might decide to meet minimum industry standards for animal welfare, while leaning into innovative ways to scale regenerative agriculture. Because the type of strategy and related practices will vary for each industry and company, mapping your industry’s strategies and practices will be a very helpful exercise. 

Establish organization-wide key performance indicators 

Most reporting and disclosure standards have process-based key performance indicators (KPIs). That may be acceptable for reporting, but to improve management and performance, companies must develop outcome- and impact-based KPIs. To help explain the difference, let’s say a company aims to improve diversity and inclusion. To do so, it may hire a diversity officer, which is an input; publish a diversity, equity and inclusion policy, which is an output; and train 50 people in diversity and inclusion, also an output. The outcomes are the results of these inputs — 20 percent managers of color, 100 percent pay equity. Assessing the impact of those outcomes will require the company to determine what state it must achieve for it to be diverse and inclusive, and drive better results such as increased productivity and creativity. 

Companies can identify varying levels of effort for different strategies; they may wish to perform in the middle of the pack for an issue they see as table stakes, but take a leadership role that drives innovation in an area ripe for competition.

Organizational sustainability KPIs should tie back to the business strategy and provide accountability for executive leadership as well as rank and file. For example, companies are beginning to tie compensation to sustainability performance and financial performance. The KPIs should focus on material ESG issues and avoid complexity or tackling too many issues. It should be possible to assess and track them. A common waste management KPI that can be assessed and tracked is percent of landfill diversion rate.

Develop and implement action plans for meeting sustainable business goals 

Having developed your KPIs, you should now develop an action plan to operationalize them, including timing, resources and activities. How many years/months will it take to meet your goals? What are the interim dates? What types of activities must you implement? What human resources are needed? What technological and financial resources do you require? What type of internal reporting and oversight is necessary? 

As sustainability tends to require execution across an organization, multidivisional engagement is key to designing those work plans. For example, many companies set public goals for significant carbon reductions. Some have already thought through how they will achieve those goals, while others set goals in line with what science recommends without having figured out how to get there. In both cases, the step after making those commitments and determining KPIs is to develop action plans.

You will need to assess the following: How do your goals translate into quantitative and qualitative targets, and what are the required steps to meet them? Who are the stakeholders that need to be involved to design and implement an actionable plan? How do you ensure that individuals who do not report to a sustainability lead will effectively implement sustainability initiatives? Your organization’s structure is critical to achieving sustainability goals.

How many years/months will it take to meet your goals? What types of activities must you implement? What human resources are needed? What technological and financial resources do you require?

Who in the organization is translating ESG topics into the language of sustainable business? For example, defining who will translate the issue of climate change into supply-chain disruptions, operational continuity and raw material prices will help the organization get behind the implementation of your plan. In your role in sustainability, you can start these conversations and build the internal bridges needed to collect and analyze this data, including bringing in the finance team.

In summary, just as with any form of business planning, well-researched and grounded sustainability KPIs, backed up with the appropriate resources and implementation plan, will be key to success. Most critically, sustainability KPIs should integrate with the broader business KPIs and help the business manage the material ESG risks and opportunities for its sector.

The " Practitioners’ Guide to Embedding Sustainability, " created by the NYU Stern Center for Sustainable Business, offers additional guidance. Our next GreenBiz installment will cover creating a sustainability culture at your company.

View the discussion thread.

More on this topic

• Corporate Strategy

Share this article

Tensie Whelan

Chisara Ehiemere

More by this author.

Engaging stakeholders can help deliver sustainability strategy, create value for the company

The first step toward an embedded sustainability strategy: Pinpoint key ESG issues

Beginner or embedder? Here's a 4-step tool to assess your company’s sustainability maturity

6 trends driving businesses to double down on sustainability

Gucci to Taco Bell, sustainability labels are thriving. So what?

Get articles like this delivered to your inbox

• Circularity 24

Join 2,000+ professionals advancing the circular economy at Circularity 24 (May 22-24, Chicago). Save 10% on your registration with code C24WPU10.

• Climate Tech
• Circularity
• ESG/Finance
• Sustainability Strategy
• UPCOMING EVENTS:
• GreenFin 24
• GreenBiz 25

7 Step Process to Build A Sustainable Business Model

This post may contain affiliate links. See our disclosure about affiliate links  here .

Table of Contents

In a world increasingly conscious of environmental and social issues, building a sustainable business model has become a moral obligation and a smart strategic move. This 7-step guide will walk you through creating a sustainable business model that can thrive in a rapidly changing landscape while positively impacting the world.

Understanding the Importance of a Sustainable Business Model

Before delving into the details of creating a sustainable business model, it’s crucial to understand it. “a business model is a framework that summarizes how a corporate creates, delivers, and captures its business operations.” 

Why is Sustainability Crucial for Businesses?

Sustainability has evolved from a buzzword to a fundamental business concept in recent years. It’s crucial for several reasons:

• Mitigating Risks: Sustainable practices help to reduce environmental and social risks, which can impact a company’s business model for sustainability.  
• Meeting Consumer Expectations: Modern consumers are increasingly inclined to approach businesses that align with their values. Sustainability can be a crucial selling point.
• Regulatory Compliance:  Many regions have stringent environmental regulations. A sustainable business model helps ensure compliance.
• Long-term Viability: Sustainable practices are more cost-effective in the long run and contribute to a company’s relevance and its achievement of sustainable development goals in a changing world.

The Benefits of a Sustainable Business Model

A sustainable business model offers various benefits, such as:

• Enhanced brand reputation and customer loyalty
• Improved financial performance through cost savings
• Access to new markets and business model’s
• Attraction and retention of top talent

Step 1: Evaluating Your Current Business Model

Assessing the strengths and weaknesses of your business model.

Start by evaluating your current business model. Identify what’s working right and what needs improvement. Consider factors like your revenue streams, customer segments, and distribution channels.

Identifying Opportunities for Improvement

Look for opportunities to incorporate sustainability into your existing model. Are there ways to reduce waste, use renewable resources, or enhance social responsibility?

Considering Environmental, Social, and Economic Factors

It’s essential to balance environmental, social, and economic factors to create a sustainable business model. Consider the impact of your business practices on the welfare of people while ensuring financial viability.

Step 2: Defining Your Sustainable Business Strategy

Aligning sustainability goals with overall business objectives.

Your sustainability strategies should align seamlessly with your overall business objectives. Ensure that sustainability is integrated into your mission and vision.

Developing a Clear Vision for Sustainability

Create a clear and inspiring vision for sustainability strategies within the corporation. 

Setting Measurable Targets and Key Performance Indicators

To track your progress, establish measurable targets and key performance indicators (KPIs) related to sustainable business model innovation. 

Step 3: Incorporating Sustainability into Your Supply Chain

Evaluating the environmental impact of your supply chain.

Examine your supply chain to identify areas where you can reduce its environmental impact. This may involve sourcing eco-friendly materials, optimizing transportation, and reducing waste.

Engaging Suppliers and Stakeholders in Sustainable Practices

Collaborate with suppliers and other stakeholders to ensure they also embrace sustainable practices. Encourage transparency and cooperation in your supply chain.

Implementing Sustainable Procurement Strategies

Adopt sustainable procurement strategies to ensure that the products and services you source are environmentally and socially responsible. Consider certifications and standards that support sustainability.

Step 4: Innovating Your Business Model

Exploring business model innovations for sustainability.

Innovation is critical to building a sustainable business model. Explore innovative ideas that align with sustainability, such as new revenue streams, business partnerships, or product innovations to transform your business. 

Utilizing Technology and Digital Solutions

Easy digital solutions to develop a sustainable business. From data analytics for resource optimization to online platforms for reducing waste, technology can be a powerful enabler as your business grows. 

Considering Circular Economy Principles

The circular economy, which focuses on reusing, repairing, and recycling, is a model well-aligned with sustainability. Look for opportunities to incorporate circular economy principles into your business.

Step 5: Developing a Sustainable Business Model Canvas

Understanding the business model canvas framework.

The Business Model Canvas is a strategic tool for developing and visualizing your business model. It has nine fundamental building blocks: customer segments, value proposition, and revenue streams.

Identifying Key Components for a Sustainable Business Model

When applying the Business Model Canvas to sustainability, identify how each component contributes to your sustainable business model. For example, your value proposition might highlight eco-friendly products.

Mapping Out Value Propositions and Revenue Streams

In your canvas, map out how your value propositions and revenue streams are interconnected with your sustainability efforts. This will help clarify the relationships between different aspects of your business.

Step 6: Implementing and Monitoring the New Business Model

Creating an action plan for implementation.

Develop a comprehensive action plan for implementing your new sustainable business model. Assign responsibilities, set timelines, and allocate resources accordingly.

Establishing Key Performance Indicators to Track Progress

Monitor your progress using the KPIs you established earlier. Regularly assess the impact of your sustainability initiatives and make necessary adjustments.

Continuously Monitoring and Adapting the Model

Sustainability is an ongoing journey. Continuously monitor your sustainable business model, adapt to changes in the business environment, and remain flexible.

Step 7: Scaling and Reaping the Benefits of a Sustainable Business Model

Expanding sustainability efforts to capture market opportunities.

As your sustainable business model proves successful, consider expanding your sustainability efforts to capture new market opportunities. This can lead to increased growth and profitability.

Enabling Long-term Growth and Resilience

A sustainable business model is an investment in your company’s long-term growth and resilience. It ensures your business remains relevant and competitive in a changing world.

Building Partnerships and Collaborations for Greater Impact

Collaborate with other businesses, organizations, and stakeholders to maximize the impact of your sustainable initiatives. Collective efforts often lead to more remarkable positive change.

Building a sustainable business model is not just about doing good; it’s about creating a profitable and resilient business ready to thrive in a changing world. By following this 7-step guide, you’ll be well on your way to making a positive impact while ensuring the long-term success of your business.

Final Thoughts 

In a dynamic, sustainable development, the imperative of a sustainable business model is undeniable. It’s the essence of how a corporation functions and creates values. The future is promising as businesses tailor the sustainable business model archetypes to their unique value propositions. Small or large corporations are increasingly incorporating sustainable innovations into their business operations. They’re realizing that profit must align with social and environmental progress. Every business council can contribute toward sustainable business development. 

Q: What is a sustainable business model?

A: A sustainable business model refers to conducting business that considers the long-term impact on the environment, society, and the economy. It focuses on creating positive social and environmental outcomes while generating economic value.

Q: What is business model innovation?

A: Business model innovation involves changing or modifying the existing business model of a company to create new value or address emerging challenges. It often involves identifying new revenue streams, improving efficiency, or adopting new technologies or processes.

Q: What are the critical steps to building a sustainable business model?

A: The following are the seven critical steps to building a sustainable business model:

1. Define your purpose and values

2. Assess your current businessBuilding a Sustainable Business Model: A 7-Step Guide model

3. Identify social and environmental impacts

4. Set meaningful sustainability goals

5. Develop a sustainable value proposition

6. Implement sustainable practices throughout the organization

7. Monitor and measure progress

Q: How can I assess my business’s social and environmental impacts?

A: To assess the social and environmental impacts of your business, you can conduct a thorough evaluation of your operations, supply chain, and stakeholder engagement. This may include analyzing your carbon footprint, waste generation, social contribution, and engagement with local communities and employees.

Q: How can I implement sustainable practices throughout my organization?

A: Implementing sustainable practices requires aligning company policies, processes, and culture with sustainability objectives. This may involve investing in renewable energy, reducing waste and pollution, promoting sustainable procurement, and integrating sustainability into decision-making processes.

Q: Are there any challenges in building a sustainable business model?

A: Yes, building a sustainable business model can come with challenges. These may include resistance to change, high upfront costs of implementing sustainable practices, the need for innovative thinking, and the complexity of aligning multiple stakeholders’ interests.

Q: Can a sustainable business model lead to profitability?

A: Yes, a sustainable business model can lead to profitability. By addressing social and environmental challenges, companies can uncover new opportunities, attract socially conscious customers, reduce costs, and enhance their brand reputation. However, it may require initial investments and a long-term perspective.

Browse more

• Afforestation
• Business Operation
• Computer Repair
• Device Repair Guides
• E – Commerce
• Eco Innovation Workshops
• Eco Wonders
• Eco-Friendly Packaging
• Eco-Friendly Practices
• Electronics Waste
• Entrepreneurship
• Environment
• Future Tech
• Gadget Recycling
• Green Certification
• Green technology
• iPhone Guide
• Organic Farming
• Renewable Energy
• Sustainable Business
• Sustainable Living
• Tablet Repair
• Tech Training
• Uncategorized
• Waste Management

Sustainability in business refers to a company's strategy and actions to reduce adverse environmental and social impacts resulting from business operations in a particular market. An organization’s sustainability practices are typically analyzed against environmental, social and governance (ESG) metrics.

As we face irreversible changes in the Earth’s system, the threat of climate change has become too risky to ignore. The exceedance of environmental thresholds is raising concerns about domino effects in global natural systems and societies. Businesses are seeing both pressure and opportunity to establish sustainability goals if they haven’t already.

Even during the COVID-19 pandemic, companies continued to align to the United Nations General Assembly sustainable development goals (SDGs) set in 2015 and intended to be achieved by the year 2030. The SDGs establish universal goals that provide a roadmap for sustainability in business in target areas such as poverty, inequality, environmental degradation and climate change. 

Examples of sustainability in business:

• Improving energy management efficiency by using alternative power sources and carbon accounting.
• Deploying infrastructure that reduces greenhouse gas (GHG) emissions, preserves water resources and eliminates waste.
• Operating dynamic and efficient supply chains to empower a circular economy, encourage reuse, design out waste, promote sustainable consumption and protect natural resources.
• Enabling sustainable development by assessing risks and improving resiliency while adhering to external regulations and development goals.

Learn how both APM and ARM can enable faster decisions and resource application.

Register for TEI Report for IBM Robotic Process Automation

We’re doing business in an unpredictable world. Climate change, dwindling natural resources, and ever-increasing demands on our energy and food supply are disrupting business operations and supply chains in unexpected ways. It’s more important than ever for private and public organizations to fundamentally rethink the way they function. Transforming into a successful sustainable business requires new levels of resilience and agility, rooted in responsible practices that preserve our planet.

Sustainability is a business imperative and should be core to the strategy and operations of every business. The reasons for this are both ethical and financial:

• Employees are increasingly looking for mission-driven, purpose-led employers who care about the planet when deciding where to work. 71% of employees and employment seekers say that environmentally sustainable companies are more attractive employers. 1
• Consumers are willing to pay a premium for goods from brands that are environmentally responsible. 80% of consumers indicate sustainability is important to them. 2
• Governments, investors, employees and customers are demanding new levels of enterprise accountability, including action to address climate change.
• Many of the world’s top economies have or are developing corporate disclosure requirements around environmental impact, driving businesses to curb GHG emissions. 3
• The rise of ESG investment criteria and sustainable investing means that a sustainable business is inherently more attractive to the rising numbers of responsible investors. Investment in ESG assets may reach USD 53 trillion by 2025, representing over a third of global assets. 4

To safeguard our planet and our future, companies need to drive decarbonization, meet environmental regulatory requirements and compliance deadlines, and improve resource consumption. Those paving the way in sustainable business practices are embracing new business models to win customers, increase brand loyalty and uncover new opportunities to lower costs.

Companies that conscientiously integrate sustainable practices into their operations are seeing valuable business benefits. These include:

55% of consumers say environmental responsibility is very or extremely important when choosing a brand. 5 Being known as a sustainable business can improve your brand awareness and help you attract consumers that are favorably predisposed to companies actively engaged in sustainable practices.

In 2021, four out of five personal investors planned to act on sustainability or social responsibility factors in the following 12 months. 6

Governments will continue to expand regulations and corporate SDGs. Stay ahead of the curve by implementing sustainable solutions early on to meet these new regulatory requirements and continually capture, measure, benchmark and report on ESG performance.

The COVID-19 pandemic has accelerated digital transformation in most companies. If that transformation is sustainable, you’re building a more resilient business that is ready for disruption and new opportunities.

Employees seeking purpose-driven employment want to work for sustainable and socially responsible companies. By building a reputation as a sustainable business, you can attract and retain the right employees for your company.

By implementing sustainable practices that reduce resource consumption and optimize operational efficiencies, today's change agents become tomorrow’s winners as they improve their bottom line. While efforts that have greater overall impact may be more costly to implement at the outset, the long-term gains will justify the investment.

Early leaders in enterprise sustainability are applying digital technologies such as artificial intelligence (AI), Internet of Things (IoT) data, blockchain and hybrid cloud to help operationalize sustainability at scale. In the process, many are uncovering opportunities to increase efficiencies while creating more motivated, inspired employees and more satisfied, loyal customers. The key to a successful sustainability strategy is to balance environmental drivers with key differentiators and market demands.

Step one to creating a sustainable strategy  is to ensure stakeholders have a clear and agreed-upon vision for the future state of the business. This might require outside help to get everyone on the same page. IBM Garage™ for sustainability experts can help your organization identify top challenges and opportunities, prioritize critical actions and measure outcomes against sustainability and business goals to realize results in weeks instead of months. 

Next, follow a timebound framework approach to implementing the sustainable vision across every aspect of your organization. Document everything in an environmental management system with defined roles, responsibilities and accountability.

Finally, start with concrete initiatives that can generate tangible, measurable results and show value. This will demonstrate the value of sustainability in business to obtain more buy-in, create momentum, and scale. 

There are five key focus areas to plan a resilient and profitable path forward:

The past decade has had the largest natural disaster impact on record. Organizations must factor the impact of climate change, which is causing extreme weather and climate events, into their business operations in a scalable and repeatable manner. Prepare for disruption with solutions that bring together multiple data sources, including proprietary, third-party, geospatial, weather and IoT data, with advanced analytics. Predict and plan for critical weather events to enable sustainable development and ensure business continuity. Reduce the operational costs and complexity of ESG compliance and reporting.

Global challenges of climate change and environmental degradation, security, privacy and resource management require businesses to ensure their infrastructure is designed and managed with resiliency in mind. By using intelligent asset management, monitoring and predictive maintenance, organizations can extend the life of assets, reduce downtime and maintenance costs, optimize maintenance, repair and operations inventories, reduce CO 2 emissions and eliminate waste. This will help them deliver against ESG goals with profitability.

Consumers are becoming more concerned about the traceability of the goods they purchase, and supply chain leaders are looking to invest in circular economies that encourage reuse. Blockchain solutions can provide greater supply chain visibility with up-to-the-minute inventory views and performance insights that help build trust and transparency, assuring authenticity from origin to consumption while reducing waste and lowering cost to serve. Tackle complex Scope 3 emissions challenges by establishing product provenance, and minimize logistics-related emissions by optimizing fulfillment and delivery with advanced AI.

Enabling clean electrification at scale will require leaders to come together in new ways to rethink how electrical systems operate and their role in a net-zero GHG emissions economy. Drive the transformation to decarbonization by enhancing grid efficiency, safety, reliability and resilience with intelligent asset management for energy and utilities. By implementing smart metering to better understand actual resource usage, you can keep critical assets and resources operating at maximum efficiency, improve equipment operations, lower costs and enhance services through automation.

Companies must embed sustainability into the fabric of their business to get the insights they need to operationalize at scale. This enables new business models and platforms to achieve sustainability goals, increase operational efficiencies, comply with regulatory requirements, expose innovation opportunities, and improve the customer experience while creating competitive advantage.

There are several challenges to overcome in the pursuit of becoming a truly sustainable business:

Customer readiness

While the mindset around sustainability is shifting, no business can afford to be left behind, and few can financially afford to be too far ahead of the appetite for sustainable offerings. Co-creating a sustainable future requires a deep understanding of your customers and having partners with the right relationships and ecosystems to bring them along on the journey.

Implementing sustainable business practices typically requires higher upfront investments. In the short term, it will often be cheaper to stick with the status quo. Some organizations will need help building an investment case to show how immediate investment will result in more durable profitability over the long run.

Systemic inertia

While sustainability is an important goal, it often isn’t seen as more important than other key priorities that may provide benefits sooner. Many businesses plan in ten-year increments, so while a 2050 commitment is good, it often isn’t enough to drive sufficient action in this decade, from a planning standpoint. It comes back to reframing risks as opportunities and building the case that acting on sustainability now is necessary to achieve future sustainability in business.

Lack of tools, insights and expertise

Being unprepared to develop a corporate sustainability vision, strategy and framework is a monumental risk. Companies may lack the ability to implement sustainable solutions or even know where to start. Sustainability in business is evolving and so are the answers. Every business needs an ecosystem of innovation partners to help them reinvent the world and create a sustainable future.

Insights from environmental data are changing business and societal behaviors, resulting in the emergence of the sustainable enterprise. Thus, sustainability in business is a megatrend that will continue to profoundly affect companies’ competitiveness and even survival in the market. Leaders are looking to harness the power of data, AI and blockchain to manage climate and environmental risk, optimize asset performance and resource utilization, drive decarbonization and build more sustainable supply chains.

IBM® continues its own sustainability journey, including conservation and renewable energy procurement, CO 2 emissions reduction, product and waste reuse and recycling, reduced water withdrawals and sustaining critical biodiversity. By driving continual improvements and setting new goals for environmental sustainability across its operations, IBM’s 30 years of environmental leadership can help you build sustainability solutions that are good for your business, your brand, and our planet.

Sund & Bælt is using AI and IoT to preserve and protect some of the world’s largest infrastructure, projecting lifespan extension for Great Belt bridge by 100 years, which would avoid 750,000 tons of CO2 emissions.

Farmer Connect is using IBM Food Trust® on blockchain to transparently connect coffee growers to the customers they serve, helping consumers support responsible and sustainable coffee production from farm to cup.

Yara International and IBM are using technology to advance sustainable food production and empower farmers with insights and unprecedented tools.

To help prepare Denmark for its transition to renewable energy, transmission system operator Energinet is using AI to better manage the grid and calculate the risk associated with taking equipment offline for maintenance.

The Climate Service (TCS) is on a mission to integrate climate data into financial decision making. TCS partnered with IBM Garage to rapidly scale their business to meet growing demand.

Accelerate your sustainability journey by planning a sustainable and profitable path forward with open, AI-powered solutions and platforms, and deep industry expertise from IBM.

Use ESG reporting to integrate data silos. Find new opportunities to embed sustainable practices across your operations and simplify GHG emissions reporting.

Optimize how you allocate resources to applications throughout your ecosystem with the IBM® Turbonomic® platform. Increase utilization, reduce energy costs and carbon emissions, and achieve continuously efficient operations by allowing applications to consume only what they need to perform.

Measure, monitor, predict and report on your organization’s environmental footprint while providing near real-time insights to accelerate sustainability initiatives and reduce impact to your business operations and supply chain.

Incorporate sustainability considerations into your operations and create more resilient, sustainable infrastructure by extending their life with intelligent asset management, monitoring and predictive maintenance.

Reduce waste, cost-to-serve and logistics-related emissions by optimizing fulfillment and delivery with trusted supply chain solutions that are powered by AI, backed by blockchain, and built on an open, hybrid-cloud platform.

Enhance grid efficiency, safety, reliability and resilience while streamlining maintenance and reducing outages with intelligent asset management and advanced climate and environmental intelligence for energy and utilities.

IBM Garage for sustainability experts can help you identify top sustainability challenges and opportunities, prioritize critical actions, and measure outcomes against business and sustainability goals to realize results quickly.

IBM is client zero in the battle for enterprise sustainability. Learn more about our history of environmental leadership and our commitment to net-zero greenhouse gas emissions by 2030.

Environmental risks are business risks. Learn how technology can help companies reduce their impact on the planet.

Sustainability has become central to business strategy and operations. Learn how organizations can set and achieve clear sustainability targets that deliver a competitive advantage.

IBM Turbonomic allows you to run applications seamlessly, continuously and cost-effectively to help achieve efficient app performance while lowering costs.

• “ Sustainability at a turning point ” IBM Institute for Business Value, May 2021
• “ Meet the 2020 consumers driving change ” Research Insights, June 2020
• “ The future of sustainability reporting standards ” (link resides outside ibm.com) EY, June 2021
• “ ESG assets may hit USD 53 trillion by 2025, a third of global AUM ” (link resides outside ibm.com) Bloomberg Intelligence, February 2021

• Get started

How to Create a Sustainability Plan for Your Business: Decarbonization Roadmap Example

Does your business have a sustainability plan? Increasingly, sustainability planning will be an important focus for businesses everywhere, as governments and consumers worldwide have begun demanding more responsible and eco-conscious behavior from corporations.

However, when it comes to sustainability, many businesses struggle to balance their priorities and lack a coherent strategic roadmap to bridge the gap between planning and implementation. According to Forbes, 90% of business executives think sustainability is important, but only 60% have actually implemented a sustainability plan.

We’re hoping to help change that by giving businesses roadmap tools to easily organize, implement, and scale their sustainability initiatives and decarbonization efforts.

Why is a sustainability plan important?

A sustainability plan is a strategy to improve the long-term viability of a business through the responsible use of social, economic, and environmental resources. Although implementing a sustainability plan may increase business and operating costs upfront, ultimately sustainability planning improves business health and profitability in the following ways:

Benefits of sustainability planning

1. Enhance brand value and increase customer loyalty: 88% of consumers report that they will be more loyal to a company that supports environmental or social issues. 66% of consumers report that they will spend more for a product from an eco-conscious brand.

2. Reduce costs and increase operating profits: A study by McKinsey found a significant correlation between a company’s responsible use of resources and improved financial performance. The same study found that a business can improve operating profits by up to 60% by reducing their use of carbon, water, and raw materials.

3. Increase sales and profitability: According to NYU, sales of products that had visible sustainability claims grew 5.6x faster than products that didn’t between 2013 and 2018. In 2015, 53% of businesses that implemented a sustainability plan reported increased profits.

4. Attract better talent: As Millennials and Gen Z begin to make up the majority of today’s workforce, employees prioritize working for sustainable companies. Almost 40% of millennials report that they have chosen a job because of a company’s sustainability plan and nearly 75% report that they would accept a smaller salary to work at a company that is environmentally responsible.

5. Maintain supply chain partnerships: According to Deloitte, 46% of businesses have begun to require their supply chain partners to meet specific sustainability criteria.

6. Reduce governmental and regulatory intervention: Environmental consciousness and responsible use of resources can reduce adverse effects of regulatory intervention. Since 1972, worldwide environmental laws have increased by 3800% . With the US, EU, Australia, and other governments around the world taking aggressive actions toward reducing carbon emissions, businesses that fail to implement sustainable practices now may be exposed to costly financial and regulatory pressure in the future.

7. Capitalize on new business opportunities: Over the past three years, governments worldwide spent $1.2 trillion improving energy efficiency and sustainability. With this trend expected to increase, sustainable businesses will be positioned to capitalize on new market opportunities.

Creating a sustainability plan

Creating a sustainability plan may seem like a daunting proposition for many businesses. Afterall, businesses have many moving parts and big goals like ‘reducing carbon emissions’ may seem vague, impractical, and impossible to achieve.

Pre-planning

Before creating a sustainability plan, it’s important for business leaders to undertake the following steps to narrow their focus into achievable goals:

1. Educate themselves on sustainability: It’s important for businesses to understand the importance of sustainability and educate themselves on the laws and compliance standards that will impact their business (both now and in the future). Doing so will give weight to their sustainability plan, help them identify opportunities for improvement, and gain buy-in from key stakeholders within their organization.

2. Identify high-level areas for improvement: Next, business leaders should assess their business to identify broad areas for improving sustainability. This stage isn’t the time to get hung up on details or discouraged by specifics, but rather to help direct their focus and develop their vision.

3. Develop an overarching vision: From there, it’s important for business leaders to develop an overarching vision for their sustainability initiatives. This vision will help guide the creation of their sustainability plan and inspire action from other members of their business.

4. Break their vision down into specific, measurable goals for improving sustainability: At this point, it’s time to outline specific, measurable goals for improving sustainability. The information gained during the first three steps will help identify specific goals.

Designing a roadmap

Business roadmap tools can help businesses implement their sustainability plan by breaking down each goal into realistically achievable steps. By helping outline the following, business roadmap tools make implementing a sustainability plan more feasible, efficient, and less likely to be derailed by unforeseen circumstances:

1. Define Challenges: First, the business needs to understand what challenges it must overcome to become sustainable and identify areas for improvement.

2. Outline Objectives: Next, the business matches objectives, or goals , to each challenge.

3. Assess Capabilities: Once objectives have been defined, the business needs to assess its current capabilities to understand which objectives it already has to the capacity to achieve, as well as what tools it needs to invest in.

4. Assign Actions: Next, the business assigns specific actions to bridge any gaps in capabilities.

5. Prioritize Initiatives: The business then groups actions into logical packages of work known as initiatives to organize their execution.

6. Generate a Roadmap: Finally, the business organizes initiatives on a time horizon, generating a visual document known as a roadmap.

Today’s roadmap tools provide features like capability maps, pre-built content, interactive prioritization matrices, and cost-benefit calculators that make generating a sustainability roadmap faster and more streamlined.

Implementation

Once the sustainability roadmap has been generated, business leaders can easily disseminate this visual document to other stakeholders, departments, or members of their team. Doing so will ensure that each facet of their organization will be working in lockstep toward achieving their sustainability goals.

By accounting for potential hurdles, assigning correct actions to each department, and creating a time horizon for each initiative, roadmap tools allow businesses to easily implement a sustainability plan that has a high chance of success.

Decarbonization roadmap example

Below is an example of an organization using a roadmap tool to create a decarbonization roadmap.

Step 1: Defining challenges

First, the organization defines the challenges they’ll face in reducing their carbon emissions.  

In this example, the business has identified 5 key challenges:

• Sourcing more sustainable materials.
• Optimizing transportation and logistics.
• Implementing energy-efficient practices.
• Administering waste reduction strategies.
• Promoting eco-friendly behavior by their consumers.

(Notice that often challenges are really opportunities. By tackling these five obstacles, the business will be greatly reducing its operating expenses, increasing its efficiency, and using their sustainability plan to build customer equity.)

Step 2: Assigning objectives to each challenge

Next, the company creates an objective, or goal, that corresponds to each challenge.

By linking objectives to challenges, a decarbonization roadmap helps the company direct and refine its efforts. Below is a summary of objectives that the roadmap tool generated:

Step 3: Assessing their capabilities

At this point, the company has a list of goals – but does it currently possess the organizational capabilities it needs to achieve them?

Mapping their current capabilities helps the organization understand what it already has to capacity to do, but also shows them what capabilities they need to invest in.

Step 4: Assigning actions to improve capability

Next, the business in this example generates a list of specific actions they need to take in order to improve their capabilities and accomplish their objectives.

Each action is assigned to a specific department to ensure that the entire organization is doing its part to effectively implement a sustainability plan. While building their decarbonization roadmap, big goals that once seemed hard to achieve become increasingly granular, and thus achievable.

Step 5: Creating initiatives

After defining the correct actions, the company groups these actions into initiatives. Doing so allows them to create logical packages of work that can be easily assigned throughout the organization.

An interactive prioritization matrix helps the company quickly assess the risk and reward of each initiative and prioritize them accordingly.

The roadmap tool generates a summary of their initiatives based on the priority they established.

Step 6: Generating a decarbonization roadmap

Next the business creates a time horizon for their initiatives. The roadmap tool takes all of this information and generates a visual document of the decarbonization roadmap, which can be easily shared throughout their organization.

The decarbonization roadmap provides a time horizon that describes which initiatives should be delivered in which sequence, based on priority and capability. This decarbonization roadmap will help the company implement and execute its sustainability plan – both in the near-term and in the future.

Start building your sustainability plan today

Does your organization make up the 40% of businesses that haven’t implemented a sustainability plan? Or are you looking to improve organization for your existing plan? We invite you to try Jibility – our free strategic roadmap tool shown in the examples above.

Related blogs

Six Steps for Developing a Strategy Roadmap

Develop a strategy roadmap with six tried-and-tested steps, covering challenges, objectives, capabilities, initiatives and more.

How to Create an Agile Strategic Planning Process

The strategic planning process of any organization needs to cope with change. Creating a sprint-based cadence is key.

Agile vs Waterfall — How to Choose the Best Delivery Method

Waterfall methodology vs agile – which is better? There's a logical way to choose the best delivery approach for your project.

By using this website, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts. View our Privacy Policy for more information. ‍

• Business Essentials
• Leadership & Management
• Credential of Leadership, Impact, and Management in Business (CLIMB)
• Entrepreneurship & Innovation
• Digital Transformation
• Finance & Accounting
• Business in Society
• For Organizations
• Support Portal
• Media Coverage
• Founding Donors
• Leadership Team

• Harvard Business School →
• HBS Online →
• Business Insights →

Business Insights

Harvard Business School Online's Business Insights Blog provides the career insights you need to achieve your goals and gain confidence in your business skills.

• Career Development
• Communication
• Decision-Making
• Earning Your MBA
• Negotiation
• News & Events
• Productivity
• Staff Spotlight
• Student Profiles
• Work-Life Balance
• AI Essentials for Business
• Alternative Investments
• Business Analytics
• Business Strategy
• Business and Climate Change
• Design Thinking and Innovation
• Digital Marketing Strategy
• Disruptive Strategy
• Economics for Managers
• Entrepreneurship Essentials
• Financial Accounting
• Global Business
• Launching Tech Ventures
• Leadership Principles
• Leadership, Ethics, and Corporate Accountability
• Leading Change and Organizational Renewal
• Leading with Finance
• Management Essentials
• Negotiation Mastery
• Organizational Leadership
• Power and Influence for Positive Impact
• Strategy Execution
• Sustainable Business Strategy
• Sustainable Investing
• Winning with Digital Platforms

Why You Need Sustainability in Your Business Strategy

• 06 Nov 2019

In today’s ever-evolving world, debating whether to incorporate sustainability into your business strategy is no longer an option. Considering a values-driven approach when developing business strategies can be vital to long-term success.

Before getting into why sustainability is essential to successful business strategies, it's important to define what sustainability in business is.

Access your free e-book today.

What Is Sustainability in Business?

In short, sustainability in business refers to the effect companies have on the environment or society.

A sustainable business strategy aims to positively impact one or both of those areas, thereby helping address some of the world’s most pressing problems.

Some of the global issues that sustainable business strategies help to address include:

• Climate change
• Income inequality
• Depletion of natural resources
• Human rights issues
• Fair working conditions
• Racial injustice
• Gender inequality

Although it may sound like it, sustainability in business is not purely altruistic. As Harvard Business School Professor Rebecca Henderson notes in the online course Sustainable Business Strategy , you can't use business to do good in the world if you're not doing well financially. Doing well and doing good are intertwined, and successful business strategies include both.

Many of today’s firms have adopted the triple bottom line , which suggests that organizations should focus on more than just profits, or the “bottom-line,” and also measure their environmental and social impact. These focuses can be referred to as “the three Ps,”: people, planet, and profit. Quite often, this sustainable approach to business ultimately boosts business performance.

Why Is Sustainability Important?

In addition to driving social and environmental change, sustainability initiatives can contribute to an organization's overall success. It may seem counterintuitive that spending more money on sustainable business practices can boost a company’s profitability, but studies show that the most sustainable companies are also the most profitable.

Environmental, social, and governance (ESG) metrics are often used to determine how ethical and sustainable an organization is. According to McKinsey , companies with high ESG ratings consistently outperform the market in both the medium and long term. While sustainability strategies might be an investment in the short term, they can lead to long-term benefits.

Benefits of Sustainability in Business

1. you’ll protect your brand and mitigate risks.

Ending up on the front page because of a scandal is a CEO’s worst nightmare. Not only do improper practices damage an organization’s reputation and cost it customers, but dealing with a public relations disaster can divert valuable human and financial resources from the core business.

You don’t want to become the company that allowed an oil spill or forced employees to work in unsafe conditions. By instituting a sustainable strategy that protects the environment and your workers, you also protect yourself from any damaging incidents.

2. Being Purpose-Driven Is a Competitive Advantage

Sustainability doesn't detract from business goals, and infusing your company with purpose can help attract a motivated, skilled workforce that drives financial success . In a Facebook Live discussion , Henderson noted a recent study showing that 89 percent of executives believe an organization with shared purpose will have greater employee satisfaction. Additionally, 85 percent say they're more likely to recommend a company with strong purpose to others.

Making your company an organization that does good in the world—rather than just a place that provides a paycheck—can be a competitive advantage when attracting the best talent.

Related : HBS Professor Explores the Impact Purpose Can Have on Your Organization

3. There's a Growing Market for Sustainable Goods

A 2019 study found that 73 percent of global consumers are willing to change their consumption habits to lessen their negative impact on the environment, and sustainable product sales have grown by nearly 20 percent since 2014. Millennials in particular are more willing to pay more for products that contain sustainable ingredients or products that have social responsibility claims. If your organization commits to sustainable products and practices, it could gain market share by converting sustainability-minded customers and increasing sales.

4. Cooperative Action Can Drive Change

As an individual, it can feel overwhelming, isolating, or simply impossible to effect change in a meaningful way. That’s not the case when the most innovative, successful, and powerful companies are collaborating to solve some of the world’s most pressing problems. While governments struggle to address public goods problems, purpose-driven companies working together to address these issues have experienced great success.

For example, palm oil is cheap, versatile, and found in about half of all packaged products, including soap, lipstick, and ice cream. But palm oil production has resulted in record greenhouse gas emissions and contributed to climate change.

In light of this, consumer goods producer Unilever committed to only using palm oil from certified sustainable sources in 2008. The organization cooperated with its competitors—as well as governments, NGOs, and indigenous peoples’ organizations—to lead an industry-wide adoption of sustainable palm oil. As a result, Unilever continues to be a thriving organization, and the world has reaped the environmental benefits of sustainable palm oil harvesting practices.

The Value of Sustainability

Sustainability doesn’t mean sacrificing profits or putting success on the backburner. Instead, it has become a crucial element to any organization’s successful strategy. A business that doesn't factor in sustainability risks is less successful in several measures, including profitability, growth, and employee retention.

By integrating sustainability into your business strategy , you can find success because, rather than in spite, of sustainability.

Do you want to take a more values-driven approach to business? Explore our three-week online course Sustainable Business Strategy and learn how organizations can succeed financially while also playing a role in solving some of the world’s most pressing problems.

This post was upated on March 22, 2021. It was originally published on November 6, 2019.

About the Author

Nice to meet you.

Enter your email to receive our weekly  G2 Tea newsletter  with the hottest marketing news, trends, and expert opinions.

5 Impactful Sustainable Business Practices

January 17, 2023

by Lee Shields

In this post

What are sustainable business practices , factors that drive sustainable business practices, 5 sustainable business practices to get started .

Sustainability is no longer a choice; it's a necessity.

Social developments have flourished over the last 100 years, but the planet's health has constantly declined. Global temperatures have risen dramatically, and there's a need for action to avoid the worst impacts of climate change.

Companies are now making a concerted effort to implement environmental engineering and sustainable business practices to reduce their carbon footprint. The fight against climate change starts with small steps that can make a huge impact. Let's look at what your business can do to make a difference.

Sustainable business practices refer to the strategies and processes that businesses use to reduce environmental impact, increase positive social impact, and create long-term value for their stakeholders. These practices seek to minimize waste, conserve resources, and reduce emissions.

Sustainable businesses focus on creating value for all stakeholders, including customers, employees, suppliers, communities, and the environment. 

IBM describes sustainability as a company's strategy for reducing the environmental impact in its industry. A clear and concise plan for your brand's eco-friendly endeavors keeps your team striving toward a common goal. 

But how can your company contribute? Whether you're an SME, start-up, or enterprise, following best practices in social, environmental, and economic areas can be the beginning of a greener tomorrow. You can ditch plastic packaging, encourage cycling to work, or even nurture a positive atmosphere in the office – start with what works for you and your team.

An issue for some is figuring out where to start. It's easy to look at the pollution caused by big corporations and feel helpless. But, if you create an environment that makes people see sustainability as possible, they'll demand it from their favorite brands. If larger companies see consumers making more eco-friendly purchases, they will optimize their processes keeping environmental and social impact in mind.

Environmental, social, and governance (ESG) investing

Conscious investors consider environmental, social, and governance (ESG) standards to evaluate if a brand is worth putting their money behind. Think Shark Tank for sustainable businesses. 

When you think of sustainable business practices, the first thought that comes to mind is that changes cost money – and with good reason. Those fighting climate change or creating a more eco-friendly brand aren't always concerned about the bottom line.

But applying your business acumen to carbon-fighting concepts is a recipe for success. Engagement, teamwork, commitment, clarity, and strategy are all transferable skills for sustainable practices.

Environmental considers how a business protects the environment. Social looks at how a company treats its team, customers, suppliers, and communities. Governance is related to leadership and shareholder rights. Investors can set their own standards, but these three areas sway the decision of where exchange-traded funds (ETFs) will go. 

As a famous comic book hero’s uncle once said, "With great power comes great responsibility." A new wave of investors is more willing to put their money where their mouth is and back their values – supporting a business following its ESG criteria funds initiatives that can have a lasting impact. According to Morningstar , $142 billion was invested into sustainable funds globally in the final quarter of 2021, a 12% increase over Q3. 

With SMEs making up the majority of businesses around the globe, they must take advantage of ESGs as soon as possible. By leveraging sustainable business practices from the outset, an indie business can position itself for ESG investment. 

EY's Global Private Equity Survey showed that two-thirds of investors consider ESG factors when considering companies to back. Investors coming from more prominent firms may already have to comply with environmentally friendly practices or adhere to a green policy. SMEs they invest in should share similar values and sustainable strategies. 

It's more than the bottom line

The real value of ESG criteria is striving toward a better planet. Yes, SMEs can benefit from outside investment, but encouraging companies to make a real and lasting change will outweigh any profit. 

How you operate in and outside of your business affects who you are as a brand. Being perceived as a sustainable company to attract your target audience can help your bottom line, but the environment's health should be at the heart of your efforts. Getting caught up in producing reports that would entice ESG investors isn't going to stop global warming, but the procedures inside can help make a positive impact. 

Ninety percent of the world's largest companies now produce corporate social responsibility (CSR) reports. On paper, that sounds great – what's not to love about conscious reporting? The issue is only a tiny amount are validated by third parties.

By self-reporting data that isn't verified, some figures may be stretched and not make the necessary impact to reduce CO2 emissions. ESG investment may come knocking, but are you really operating a sustainable model?

You don't have to be an eco-friendly or green business to be sustainable – every company, large or small, has a role to play. 

Small steps lead to big changes 

Reaching for Net Zero is something that businesses around the globe are striving for, but what is it? According to EPA , Net Zero requires using only as much energy as produced, maintaining a sustainable balance between water availability and demand, and getting rid of waste sent to landfills. The United Nations hopes to achieve Net Zero by 2050; every effort by your business helps to make that happen. 

Ambitious goals can seem impossible when you're at the beginning. How larger companies operate needs a sustainable overhaul, but Rome wasn't built in a day. One small business can't change how every multinational company behaves, but collectively demanding more can. By insisting on sustainable products from supply chains, larger companies will eventually have to change. 

The same goes for your own business. A small used car salesperson doesn’t have to suddenly restructure their model to sell electric vehicles. Implementing small changes has a ripple effect that leads to significant results.

Something as simple as moving to a paperless online calendar system can be a tiny step to becoming a more sustainable business. Removing unnecessary in-person meetings or providing a work-from-home environment can eliminate harmful CO2 emissions caused by commuting. 

The first step is devising and implementing a sustainable business plan, strategy, and practice for your company. By identifying and integrating ESG practices, your business can help fight climate change and improve its brand image at the same time.

Improving where you can is the first step

The $142 billion-dollar question is, where do you start? With sustainability at the forefront of many business strategies, finding what works for you can take substantial time and effort.

You'll find a barrage of products, tips, goals, and don'ts from leading publications and companies.

But where do you being?

By identifying what is achievable – just getting started is half the battle. You don't need to know it all or even get it right initially. Implement sustainable business practices that your team can follow, and you can adapt them as needed. Find out what works for you through trial and error – aim for what motivates you.

Going green can have many motivating factors. There are obvious positives, like reducing your carbon footprint and ethically sourcing supplies, but it has a lasting impact both internally and externally. Here are some driving factors you may have yet to consider.

Internal drivers:

• Organizational benefits: You could see improved working conditions, safety, and efficiency. 
• Financial benefits: Although helping the planet is the primary goal, you get tax incentives, government grants, and the previously mentioned ESG investors. 
• People benefits: Your team can take inspiration from the initiatives at work and apply them to their personal lives. By creating a sustainable environment, you're more likely to see improved ethical behavior from employees.

External drivers:

• Commercial benefits: Going green can also help you market yourself as such and appeal to consumers who care about sustainability. 
• Environmental benefits: The UN has targeted Net Zero. You can reduce your carbon emissions, help the planet, and provide a more sustainable future for the next generation.
• Communications benefits: Your eco-friendly image can make a lasting impression on potential customers and suppliers.

The pushback on creating a more sustainable business model usually comes down to cost. Companies fear that ethically sourcing supplies, adopting greener energy, or managing waste correctly could infer higher expenditure. But as access to all these factors has evolved, it has never been easier or more beneficial for an SME to go green.

Why are customers choosing green brands?

First Insight report that 62% of Generation Z and Millenials prefer to buy from sustainable brands. They’re also more likely to spend and purchase based on company values. 

A new generation of consumers has arrived and is more conscious of what they buy and who the seller is. In today's climate, positioning your brand as eco-friendly and highlighting your values is an effective way of connecting with modern customers. 

Consumers want to help the environment. They care about the working conditions of those who manufacture their favorite products. Being seen to make a difference has taken center stage. People are fearless in calling out brands online and on social media that need to make an effort to be more sustainable and save the environment. 

Customers want to highlight that they’re shopping ethically in the online sphere. Those conscious of sustainability or the environment can form tribes and purchase similar brands. 

Brands with similar values can open doors to different audiences. For example, Casetify partnered with The Earth Day network to design the first 100% compostable and biodegradable phone case. Marketing themselves as a greener company brought in a more eco-friendly consumer base for Earth Day.

Shoppers are naturally more conscious these days. But some sustainable have also played a part in spreading the word about conscious business and environmental protection.

Businesses need consumers to make a purchase that justifies their product. For example, a dishwasher tablet that reduces water usage in dishwashers by 20% requires the user to set their machine to 'eco-mode' 

Sourcing supplies from Fair Trade vendors means they need socially conscious customers willing to spend on their sustainable product. Consumers may be more mindful, but businesses must provide them with that platform to shop ethically.

Defining your brand is the first step. What is your mission; why do you want to be more sustainable? By having clear intent and achievable goals, you can lay out a strategy that your whole team can follow. You don't have to become a green brand overnight, but you can always work toward it. Sustainability doesn't define your business but implementing the practices certainly makes a difference. 

The changes you make in your business now will impact the future. Although instilling eco-friendly practices may prove challenging initially, you will reap the rewards faster than you think. 

Let's look at five thoughtful and impactful sustainable business practices that are a good starting point to transform your company.

1. Operate from a work-from-home/hybrid model 

Working from home has become a more viable option for employees in the past few years. With online migration, Green Journal reports that working from your home office four days a week can reduce nitrogen dioxide emissions by around 10%.

Travel has become far less commonplace with growing technologies in the online office. Giving your team the option to work from home or even a hybrid model benefits them and the planet. 

Companies can easily adopt a virtual approach that helps their team stay connected while building their customer base. For example, webinars are an excellent tool for reaching a global audience . In addition to collaborating with your team, you can use them to give a platform to industry leaders and connect with new leads. 

Naturally, in-person meetings, office days, and gatherings are still crucial for people socially. The key is to suit your model to your business – what works for an online marketing firm may not suit those operating a medical practice. 

Tips for a home office

Working from home has benefits, but it comes with unique challenges. Creating the right environment in your home can help separate your work and leisure life.

Here are some tips to help:

• Communicate with your team regularly.
• Layout boundaries with anyone at home with you during office hours.
• Have a separate space. It doesn't have to be a different room, but once work is finished, it's out of sight and mind. 
• Take breaks and make sure to move.
• Interact with other people (outside!).
• Prepare your lunch the night before.
• Clearly define your finish time.
• Talk to your employer.

Working from home can positively impact the environment without negatively impacting the person.

2. Go paperless

Going paperless is a simple practice to cut down on unnecessary waste. A quick win can boost morale and motivate your team to pursue larger environmentally friendly endeavors. 

U.S. offices use 12.1 trillion sheets of paper annually. The average office worker uses 10,000 sheets per year. Nowadays, you can switch most uses for paper in an office to online; it's waste that you can easily cut out. 

Trees are a vital part of our ecosystem. They store carbon dioxide through photosynthesis, helping reduce the gas emitted into our atmosphere. An excessive amount of CO2 causes the planet's temperature to rise, causing global warming. 

To mitigate the use of paper in your office, you can:

• Switch to an online calendar system
• Use a cloud storage system
• Remove printers
• Scan and email documents
• Digitally sign documents
• Email invoices and receipts
• Adopt digital business cards
• Use digital notes
• Invest in paperless marketing
• Provide reusable coffee cups

3. Partner with nonprofit organizations and charities

Companies interested in adopting sustainable practices often need to figure out where to start. The intent and desire are there, but an organization can lose steam without a clear plan. It needs to be efficient and balanced with action. 

Building an eco-friendly model from scratch can be both time-consuming and expensive. An option is to create a new team to handle sustainable initiatives with designated employees, but this can lead to stagnation without direction. This doesn't mean you should stray from this option; you just need to connect with the right people.

Partnering with a nonprofit organization or charity that aligns with your sustainability goals can aid in defining your own path. Several organizations have the resources and knowledge to assist you in the initial phases of your sustainable journey. They're not there to do the job for you or outline your mission but can offer a supporting hand in getting started. 

It's a two-way street. Donating or using your platform to promote your company can highlight how your brand fights climate change. By offering a percentage of your profits to fund their efforts, you'll be aligned with their mission, and consumers will know of your eco-friendly efforts.

of customers would choose brands that have environmentally sustainable practices

Source: Deloitte

Partnering with non-governmental organizations or nonprofits has a lasting impact on your brand and the planet. For example, Patagonia and Dr. Bronner's partnered with the Rodale Institute to form Regenerative Organic Alliance , which aims to fight climate change by reabsorbing carbon into the soil. 

Washing brand Ariel teamed up with WWF to reduceCO2 footprint. When Ariel hit 1 million pledges through their social media campaign #WashColdChallenge, they donated £100,000 to support WWF's climate work. Ariel benefitted from green marketing, while WWF received funding for their cause.

Who should you reach out to?

That depends on what your goals are. For SMEs, finding local initiatives that impact your community might be best. If you're looking on a much larger scale, partnering with organizations that reflect your mission and what your sustainable journey means to you is vital.

4. Educate your team on best practices

Give a person a fish, and you feed them for a day; teach a person to fish, and you feed them for a lifetime. Devising and implementing a sustainable strategy will only work if your team is appropriately educated and trained.

How could you expect your plan to be followed if you read from different sheets? By educating your staff, you're ensuring that they execute your sustainable business practices flawlessly. 

Set up and delegate initiatives to different team members. If they feel heavily involved and hold responsibility, they’re more likely to abide by your strategy daily. Have workshops and seminars on how to separate recycling properly or what to look for when buying sustainable supplies. 

You could also bring in a guest speaker to highlight how carbon footprint is measured and what you can do to lower it. That way, your team will be up-to-date on the latest procedures and how to implement and follow them. 

You can also set up green practice panels to give team members autonomy and construct their own sustainable ideals. Extend it company-wide through webinars. Team members can bring their practices home, and the spread of sustainability will far exceed your business walls. 

5. Become energy efficient

Providing energy to an office space can be costly, especially in the current climate. Thirty percent of energy is wasted in commercial, manufacturing, and educational buildings. Businesses can lower their expenses and emissions by reducing energy usage and becoming more efficient. It's a straightforward win for you and the planet.

By using alternative methods, SMEs can save 18 to 25% on energy bills. Designating a team to monitor heating, lighting, and equipment can ensure your space runs optimally. You could partner with an external organization to implement a more sustainable and optimized energy model in your workplace. 

Simple fixes could be changing all lights to LEDs, turning off heating in empty rooms, using daylight, and switching off unnecessary equipment. Alternatively, you could try out office sharing and reduce emissions by using co-working spaces.

Act now to fight climate change

Regardless of your business type, you have a role to play in fighting climate change. With a more significant push for Net Zero, you have a unique challenge to care for the planet for future generations.

Adopting more sustainable business practices are simple ways to make a lasting impact. By transforming your organization, you could see outside investment, better brand recognition, and even become a leader in your community for fighting climate change. Small steps can lead to tremendous results. 

There is no one size fits all approach, and the outlined practices are recommendations for what you could do. Get started, share ideas, include your team in the strategy and see what works for you. Through trial and error, you can customize and set goals in striving for a better planet. Companies are in it together and working toward fighting climate change. 

The future begins now; what you put in place now will benefit you now and in the future. Soon those small steps will become commonplace, and you’ll give the next generation something to build on. That first action can lead to a more sustainable future.

Sustainability and technology go hand in hand. Learn how generative designs are revolutionizing the design industry while making manufacturing and design more sustainable.

Less waste; optimized production systems

Make your production systems more sustainable and support your environmental, social, and corporate governance (ESG) strategy with sustainability management software.

Lee Shields is a Content Associate at Setmore – a free online scheduling platform that helps you connect better with your customers.

Recommended Articles

Contributor Network

What Is Sustainability in Business? (+10 Brand Examples)

It's official: customers choose sustainable products from sustainable brands.

by Lesley Vos

How to Use Process Automation to Boost Your Small Business

If you own a small business, you know how difficult it is to get everything up and running...

by Ashley Spencer

How To Boost Your Small Business Productivity: Tips and Tools

If you’re running a small business, chances are you grapple with low productivity from time to...

by Taru Bhargava

Never miss a post.

Subscribe to keep your fingers on the tech pulse.

By submitting this form, you are agreeing to receive marketing communications from G2.

• Constellation’s Energy Solutions
• For Your Small Business
• Small Business Goals

How to Develop a Small Business Sustainability Plan

If you’re a small business owner, you may be wondering what you’ll gain by adopting a small business sustainability plan. In a word, plenty! Regardless of your industry, adopting sustainable business practices can improve your bottom line—in both the traditional and the environmental sense.

Your cost savings, reduced risk, positive brand association, improvements to the environment and public health, and ability to meet demands for eco-conscientious products and services will more than offset the costs of up-front integration of sustainability initiatives. In other words, your small business sustainability plan’s initial costs are a wise investment!

What Is a Business Sustainability Plan?

A business sustainability plan is simply something an organization develops to achieve goals that create financial, societal and environmental sustainability. A business impacts communities and resources, so taking these steps to sustainability is in the best interests of the environment, the business owner and the consumer.

Reasons to Build a Sustainable Business

Making the case for a sustainable business is simple: an environmentally friendly business can be a profitable one. You can decrease your business’s negative impact on the environment and potentially save money. Just take it from the many  companies around the world that generate at least $1 billion a year in revenue from sustainable products or services. These companies manufacture everything from burritos to sports cars. Collectively, these businesses generate more than $100 billion in annual revenue from their green product lines alone, and they can outperform competitors by nearly 12 percent annually.

Small businesses can easily scale these practices and implement them in their own organizations through a small business sustainability plan. From saving money and promoting public health to improving public relations, the benefits of building a sustainable business might surprise you.

Benefits of a Small Business Sustainability Plan

• Reduce energy use. From installing ENERGY STAR products and appliances to using LED light bulbs and automatic taps, if you reduce waste, you will increase your business’s efficiency, potentially save money on energy and contribute to overall small business sustainability. You can even start small: encourage employees in energy-saving practices such as turning off lights, carpooling, or telecommuting whenever possible.
• Improve public health.  Be committed to going beyond mere compliance with baseline government standards. A sustainable business will implement changes that reduce emissions, improve air quality, and identify products that reduce concerns about health and safety liability. This promotes higher standards of public health and environmental protection.
• Be a trailblazer.  Not too long ago, no one thought a sustainable business could also be a profitable one, so many industries still lack sustainable companies. Become an inspiring voice of advocacy beyond the four walls of your organization, and blaze trails by creating value for employees, consumers and the public. The visionary thinking and passion behind your business sustainability plan will be remembered—and will yield dividends—for years to come.
• Attract green-conscious consumers—and publicity. Improve public relations with your sustainable business by becoming attractive to Earth-conscious consumers and raising your brand’s value. And remember to let the public know when you implement your environmentally friendly policies. Learn more about the  benefits of running an environmentally friendly business here !

5 Steps to Sustainability for a Small Business

If you’re ready to develop your small business sustainability plan, we’re here to help! With these five steps to sustainability based on going above and beyond mere regulatory compliance , you’ll be equipped to make your business more up to date and efficient. The result will be rewards for both the environment and your bottom line.

Step 1: Learn about Sustainability

The first step in creating a small business sustainability plan is learning what, exactly, sustainability is all about.

• Knowledge is power. Use your resources wisely! There are many guides out there that offer suggestions on sustainability as well as renewable and sustainable energy. Use them as a jumping-off point.
• Profits, people and planet. Internalize the idea that sustainability within your business means managing your triple bottom line: your financial, social and environmental impacts, obligations and opportunities.
• Going green vs. going sustainable. You may be wondering, what is a green business? Green products and services directly reduce the environmental impact when compared to other products and services— sustainability is a broader concept. It’s about the long-term, multifaceted impacts and implications of your products and services. But you can use green language in your small business sustainability plan and campaign using green goals to measure your total sustainability success.
• Out with the old (way of thinking). Forget the outdated “take-make-waste” worldview, and adopt the “borrow-use-return” model. It’s all about a perspective shift. The key is to see the business, the self, the economy and the household as connected with—instead of separate from—the environment.

Step 2: Assess Areas of Improvement

If the federal government and major corporations can find ways to improve sustainability, so can your small business! It just takes some research.

• Learn the laws. From local development laws to self-regulation in your industry to international treaties, many standards are already on the books in terms of sustainable practices. The Environmental Protection Agency ’s website is a great place to start in your research.
• Check your compliance. At a minimum, your business should be in total compliance with any laws or standards already in place. Research cost-effective ways to improve compliance, such as through pollution-prevention techniques and innovation.
• Assess global issues. Research issues such as global warming, energy and fuel crises, and ecosystem decline to see whether your practices are a contributing factor. This will guide what small business sustainability goals you set in terms of improvement.

Step 3: Find Opportunities

Start embracing the entrepreneurial spirit of innovation and asking yourself the hard questions: check out these opportunities for creating the best small business sustainability plan possible.

• Innovate. Success in implementing sustainable business practices is directly related to innovation. If you want to meaningfully reduce waste and energy consumption, you’ll need to innovate, whether you’re a start-up or a thriving business. From problem solving to finding cheaper and better ways of doing things, innovation ranges from simple changes to implementation of complex new technologies.
• Get employee input. Bring in employee ideas and support; employees will take responsibility for things like energy efficiency and come up with solutions that will help you implement and improve sustainability.
• Self-reflect. Ask yourself a few questions, and you’ll find numerous opportunities for improvement: What strengths does my business bring to the table that can play a unique role in sustainability? Does my company create an overabundance of waste? Do the companies I work with create mass amounts of waste?

Step 4: Create a Vision

Your vision for sustainability is all about what makes you and your business tick.

• Find your company’s passion. What is your company passionate about? Choose from a few environmental issues (e.g., global warming, air pollution, waste disposal, water pollution, urban sprawl), and focus on where you can have a meaningful impact.
• Be specific about your small business’s vision. Create a separate vision for each section of your small business, from those on the front lines to those working behind the scenes in different departments.
• Define your sustainability model’s terms. Be sure to define a few words that describe your business’s specific sustainability model. This will help you give your employees the ability to take ownership of your overall vision.

Step 5: Implement Changes

The final of the five steps to sustainability is an exciting one. Implementation!

• Communicate clearly. Adequately communicate your new sustainability plan across your entire company. Educate your employees to ensure successful implementation, and make sure all leaders are involved.
• Change policies. Ensure your current policies align with your sustainability plan. If not, create new ones that are specific to different departments and employees.
• Review performance. Create specific, measurable and attainable written goals, and develop metrics on how to track the success of your changes. This could be as simple as comparing a previous energy bill under the old policies with a new one that comes after you’ve implemented changes.
• Get feedback . Have your leaders in the company report back to you on any difficulties they encounter in implementing changes to policies, so that you can troubleshoot how to fix them while still staying true to the sustainability model. This will help you identify opportunities for more small business sustainability.

After you’ve taken the five steps to sustainability, make sure you can substantiate your sustainability claims before going public with the environmental advantages of your products or services. You can avoid making unqualified claims by following the Federal Trade Commission’s guidelines and general principles that apply to environmental marketing. You’ll learn how consumers will interpret your claims and how to support and qualify your claims without being misleading. Then you’ll be ready to let people know about your small business sustainability plan. The financial, societal, environmental and public relations rewards are sure to follow!

Plan ahead and lock in your energy rate up to four years

SMALL BUSINESS ENERGY SOLUTIONS

Shop Small Business Electricity Plans

Shop small business natural gas plans.

• Starting a Business

Our Top Picks

• Best Small Business Loans
• Best Business Internet Service
• Best Online Payroll Service
• Best Business Phone Systems

Our In-Depth Reviews

• OnPay Payroll Review
• ADP Payroll Review
• Ooma Office Review
• RingCentral Review

Explore More

• Business Solutions
• Entrepreneurship
• Franchising
• Best Accounting Software
• Best Merchant Services Providers
• Best Credit Card Processors
• Best Mobile Credit Card Processors
• Clover Review
• Merchant One Review
• QuickBooks Online Review
• Xero Accounting Review
• Financial Solutions

Human Resources

• Best Human Resources Outsourcing Services
• Best Time and Attendance Software
• Best PEO Services
• Best Business Employee Retirement Plans
• Bambee Review
• Rippling HR Software Review
• TriNet Review
• Gusto Payroll Review
• HR Solutions

Marketing and Sales

• Best Text Message Marketing Services
• Best CRM Software
• Best Email Marketing Services
• Best Website Builders
• Textedly Review
• Salesforce Review
• EZ Texting Review
• Textline Review
• Business Intelligence
• Marketing Solutions
• Marketing Strategy
• Public Relations
• Social Media
• Best GPS Fleet Management Software
• Best POS Systems
• Best Employee Monitoring Software
• Best Document Management Software
• Verizon Connect Fleet GPS Review
• Zoom Review
• Samsara Review
• Zoho CRM Review
• Technology Solutions

Business Basics

• 4 Simple Steps to Valuing Your Small Business
• How to Write a Business Growth Plan
• 12 Business Skills You Need to Master
• How to Start a One-Person Business
• FreshBooks vs. QuickBooks Comparison
• Salesforce CRM vs. Zoho CRM
• RingCentral vs. Zoom Comparison
• 10 Ways to Generate More Sales Leads

How to Create a Sustainable Business Model

Table of contents.

Creating a sustainable business model is a top priority for many companies. A sustainable business helps the planet and may prove more successful in the long run; customers want to work with companies that care about making a positive contribution to the world. 

Sustainability isn’t just for large corporations. Businesses of any size can work toward a sustainable business model by following specific practices and adopting a sustainable strategy.  

What is sustainability?

Sustainable means the ability to be maintained at a certain rate or level, and sustainable development meets current needs without compromising future generations’ ability to meet their own needs.

However, we must dig a little deeper to understand how the concept of sustainability is relevant to business development.

What is a sustainable business model?

To Rex Freiberger, president of Superlativ Media, a sustainable business model helps generate value for everyone involved, without draining the resources that help to create it.

“A business model meant to capitalize on a trend isn’t sustainable, for example, because the social resources that get it started won’t exist in years or even months,” Freiberger said.

Lia Colabello, managing principal of Plastic Pollution Solutions, noted that there’s a difference between a sustainable business model — a business that will likely achieve profitable growth —  and a business model that prioritizes sustainability.

“A sustainable business model is what every business leader hopes to achieve — a business that will turn a profit quickly and stay afloat for the long term,” Colabello explained. “A business model that prioritizes sustainability is one that, at a minimum, considers all stakeholders, assesses and addresses environmental impacts, and is transparent and thorough in its reporting.”

What makes a sustainable business model work?

There are four key elements of a sustainable business model.

1. A sustainable business model is commercially profitable.

You can make a profit and be socially responsible . No business can succeed or scale unless it attracts customers. What is your value proposition? Who are your target customers ? Why is your business valuable, and what niche do you fill?

2. A sustainable business model can succeed far into the future.

A trendy business or one that relies on limited resources may be profitable for a few months, but how will it fare in a year or two? Resource availability and pricing are never guaranteed or fixed; you don’t want to build your castle on a sinking rock. 

3. A sustainable business model uses resources it can utilize for the long term.

You can’t have a sustainable business model without sustainable resources. Many business activities are limited by finite resources or exceptionally high prices. On the other hand, some resources may be readily available yet environmentally harmful. 

Palm oil is a famous example of a cheap and plentiful resource. However, farmers are razing acres of land and causing severe environmental destruction by cultivating the crop. Cheap resources may be tantalizing for business, but consider the big picture instead of taking a shortcut now.

4. A sustainable business model gives back.

One theory is that a truly sustainable business model is one that gives as much as it takes. This concept is called the cyclical borrow-use-return model. 

Bob Willard, expert and author on quantifiable sustainability strategies, contrasts this model with the current “linear take-make-waste model” that so many modern businesses are built upon, which he said is “culpable for contributing to [this world’s] unsustainability.”

Instead of taking from the Earth, a sustainable business “borrows” resources with the intent to replenish them. This concept of responsible consumption is one that both businesses and consumers can promote and practice.

What is a sustainable strategy?

A sustainable strategy takes the big picture into account. “A sustainable strategy is one that understands the flow of ‘in’ and ‘out’ — not just cash flow, but again, the resources, both tangible and intangible, that are required to create the product or service,” Freiberger explained.

Colabello noted that the most effective sustainability strategies start with an organization’s purpose. She encouraged businesses to ask these questions, similar to what you’d ask when crafting a vision or mission statement :

• Why does the organization exist?
• What problem is it solving?
• How is it going to improve the world, environment and society?

“From there, a strategy can emerge that engages the entire brand ecosystem — internally, the supply chain, its communities and its industry,” Colabello said. “The approach is prioritized and diagrammed out, complete with goals, KPIs [key performance indicators] and a timeline. These are communicated both internally and externally, in keeping with transparency.”

Why do we need sustainable business models?

There are many ways to approach the issue of sustainability, but the simplest one, which can unite all stakeholders, is this: Kind businesses attract more customers. According to the 2022 Global Buying Green report , 86 percent of consumers under 45 were willing to pay more for sustainable packaging, and 68 percent purchased items in the past six months based on companies’ sustainability credentials.

It’s OK to be open about your sustainability goals and use your sustainability as a selling point. Customers will ask, and the friendlier you are about it, the more likely they will be to share that news with their friends.

But maybe you’re not motivated entirely by money. Perhaps you’re driven by the desire to be the change you’d like to see in the world. 

After all, the larger a business grows, the greater its impact is on the world and the people around it. And it’s better to start sustainably than to make the switch 10 years down the line — or when stakeholders begin pushing back on unreasonable business practices.

How can you start and maintain a sustainable business model?

Getting started with a sustainable business model can be straightforward. Consider the following guidelines. 

1. Plan your resource usage. 

Consider the resources your business requires to operate, and then do the following:

• Make a list of the raw materials you’ll need. This list will vary dramatically by business type. Software-as-a-service companies, for example, don’t require the raw resources that clothing brands do.
• Consider where your materials might be sourced. Who is making or harvesting your product materials? How are they being sold?
• Consider where the resources are coming from and how they are being transported. How far do they have to travel to arrive at your home or warehouse? How can you cut down on fuel miles? What are the riskiest resources on your list, and how can you increase their productivity while lessening your dependence on them?

After you address your resource usage, outline your manufacturing and business processes. Ask yourself these questions:

• Which manufacturing processes are the most wasteful? How can you mitigate the adverse effects of these processes?
• For physical materials, is it possible to source locally?
• How are you packaging your products? (Sustainable, biodegradable packaging can reduce the amount of trash stuck in landfills.)
• Which materials on your list are the riskiest or least sustainable? How might you replace them? Could you replace them now?
• What are the end products of these processes? How can you reuse waste material? Does it have to be thrown away?
• Can the produced waste be used as a resource or be fed into a different process to be used again? How can you reduce unusable waste?
• Where can you reduce waste? How can you stretch your raw materials? Can you lower the number of resources used to create a specific product while maintaining its quality?
• What are the labor conditions like? Are your laborers being paid fairly? Is their quality of life improving or worsening because of your business processes? Is their time being respected?

2. Consider alternative forms of company ownership.

The traditional top-down business model can create unreasonable wage gaps between those at the highest rungs of the ladder (CEO, other C-level executives, founders, managers) and those at the lowest (laborers tasked with creating raw materials or carrying out the manufacturing processes). Including everyone in your sustainability goals can help you keep your business on track and give those who are typically disadvantaged a larger say.

3. Engage your customers.

Going green can improve your brand reputation among consumers, but your dedication to sustainability may result in higher prices. But that’s OK; in a compelling blog post, series of posts or dedicated brand story page , tell your customers why they’re paying more for your products.

You might choose to engage customers by pledging a percentage of revenue to support a charity or by offering different shipping or packaging options. Customers who love your product can be converted into brand ambassadors when you create messaging that resonates with them. 

If you involve your customers in your discussions about sustainability, they will become more invested in your company’s success and your products. You could also consider crowdsourcing sustainability ideas from consumers through a forum or online group.

What roadblocks are there to a sustainable business model?

Building a sustainable business can be daunting. If your business is stuck, you may struggle with one or more of these issues:

1. You hold innovation meetings, but ideas don’t go anywhere.

Many good ideas arise when founders or leaders get together at a workshop or meeting. However, you must nurture these ideas and draft a plan of action.  

2. Ideas are not implemented.

Another issue founders face is that the plans for change are never implemented. This could be because it seems too challenging to change the status quo or because the members of the company aren’t yet convinced of the need for a greener, kinder business model.

3. The implemented business models fail in the market.

Two of the most common reasons businesses fail to move toward sustainability include the wrong mindset and a reluctance to dedicate resources to change.

To address these issues, find your allies — those who believe sustainability is essential for the company’s bottom line and the larger world — and connect with them. Together, you can remove or alter harmful, outdated systems and encourage innovation.

Practicing and following through with your sustainability goals helps consumers feel closer to you and instills more trust in your brand. This is crucial at a time when customers expect more warmth and honesty from companies.

Why is sustainability important in business?

Shel Horowitz, an expert on green and transformative business profitability, raised three points about why sustainability is crucial in business:

• Sustainability allows you to be here decades from now because you’ve created something of lasting value.
• Sustainability makes you much more attractive in the eyes of customers, employees and other stakeholders who actively want to do business with companies that think beyond the single bottom line.
• Sustainability helps the planet and its creatures heal from the abuse humans have piled on it, especially in the past 250 years or so.

Aside from businesses’ immense environmental impact, Colabello noted these forces putting pressure on companies to build robust sustainability strategies:

How is a business sustainable?

Freiberger believes a business can make itself sustainable by focusing on the bare essentials it needs to survive and then growing from there. Make long-term projections, and keep an eye on the distant future instead of focusing on more immediate profits, he advised.

As part of making your business sustainable, consider these statistics from the SUMAS Sustainability Management School , and determine where you can cut back to reduce your business’s carbon footprint :

• An estimated 5 trillion plastic bags are used worldwide each year.
• 400 million tons of plastics are produced globally every year.
• Globally, only 9 percent of plastic ever produced has been recycled; 79 percent can now be found in landfills, dumps or the environment; and 12 percent has been incinerated.
• With rapid population growth and urbanization, annual waste generation is expected to increase by 70 percent from 2016 levels to 3.4 billion tons in 2050.
• If it continues at the same rate, the plastic industry will account for 20 percent of the world’s total oil consumption by 2050.
• The construction and later demolition of buildings produce 40 percent of all waste.

If you are thinking about implementing a sustainable business model, consider the short-term expenses you will incur. However, these costs are a small price to pay for a better future and a compelling brand value for increasingly eco-conscious consumers. In other words, sustainability sells.

Jamie Johnson contributed to this article. 

Get Weekly 5-Minute Business Advice

B. newsletter is your digest of bite-sized news, thought & brand leadership, and entertainment. All in one email.

Our mission is to help you take your team, your business and your career to the next level. Whether you're here for product recommendations, research or career advice, we're happy you're here!

How to develop a sustainable action plan for your SME

Small to medium enterprises (SMEs) play a significant role in South Africa's economy, contributing substantially to GDP and employing a large portion of the workforce. This also means your business has a considerable impact on carbon emissions. Embracing sustainability not only aligns with global trends, but also meets evolving consumer expectations.

Embracing sustainability can enhance your brand's trustworthiness and appeal to consumers who increasingly prioritise environmentally responsible practices.

To develop an effective sustainable action plan for your SME, try these steps:

Start by gaining a thorough understanding of sustainable practices and their potential benefits for your business. Research industry trends, regulations and successful case studies to make informed decisions. This foundational knowledge will guide your sustainability journey and ensure you adopt practices that align with your business goals.

2. Involve the team

Engage your employees in discussions about sustainability opportunities. Their insights and buy-in are crucial for successful implementation. Understand their concerns and preferences to tailor the plan effectively. Collaborating with your team fosters a sense of ownership and commitment to sustainability initiatives.

3. Set goals

Define measurable sustainability goals aligned with your business values and objectives. This provides a roadmap for progress and helps track the impact of your initiatives over time. Clear goals not only guide your actions but also enable you to communicate your commitment to stakeholders.

Develop a detailed strategy for implementing sustainable practices. Allocate resources, assign responsibilities and establish timelines to ensure accountability and progress. A well-planned implementation strategy minimises disruptions and maximises the effectiveness of your sustainability efforts.

5. Train and incentivise

Invest in training programmes to educate employees about sustainable practices and their role in achieving the company's goals. Reward and recognise their contributions to motivate ongoing participation. Continuous training and incentives reinforce a culture of sustainability within your organisation.

6. Communicate effectively

Be transparent about what you are doing. Communicate your sustainability efforts to stakeholders, including customers, suppliers and investors. Avoid “greenwashing” by providing accurate information and showcasing genuine commitment to environmental responsibility.

Customise your approach to suit your SME's unique needs and develop a sustainable action plan that not only reduces environmental impact but also enhances your brand reputation and competitiveness in the market.

Did you know: Domains.co.za hosts its web hosting servers at Teraco, Africa's largest data centre. Teraco's green technology solutions involve generating a substantial amount of power from a large solar panel system. They also prioritise natural cooling methods, minimise water usage and recycle 37% of their waste each month.

Editorial contacts

How to prepare for a sustainable future along the value chain

Our lives have changed radically as a result of the pandemic. But as dramatic as the impact of COVID-19 has been, it has by no means eclipsed another topical issue: the need to shape a more sustainable economy. In fact, this task has attracted heightened public attention following extreme weather events such as the devastating flooding all over Europe last summer. Last fall, decision makers from around the world met in Glasgow, Scotland, for the 26th United Nations Climate Change Conference  to discuss the challenges ahead. Although the debate primarily focused on major emitters, such as the energy, steel, and construction industries, the consumer-goods sector is equally called upon to take action.

About the authors

But what exactly do we mean by “sustainability”? In its broadest sense, the term covers three areas: environmental, social, and governance—or ESG for short. Specifically, ESG encompasses the degree of responsibility that companies assume—irrespective of what they are legally required to do—for sustainable development in the three areas mentioned.

80%: Share of consumer emissions that reside in supply chains. To meet the pathway to net zero, CPG companies need to work with their suppliers to secure green raw materials and supply

For many, sustainability is primarily about our use of natural resources and the climate impact of our actions. This is also highly relevant for consumer-goods manufacturers. As a rule, it is not enough to look only at one’s own value creation. After all, a typical consumer-goods company’s supply chain generates far greater environmental costs than in-house operations: for instance, it is responsible for more than 80 percent of greenhouse-gas emissions and more than 90 percent of the impact on air, land, water, biodiversity, and geological resources.

The consumer-goods industry is facing a huge environmental challenge: if it intends to meet the current EU climate targets, it will have to more than halve its greenhouse-gas emissions by 2030. Given that prosperity and consumption will continue to grow in the coming years, a fundamental change in thinking is required; new business models—especially those relating to the circular economy —will have to gain an increasingly firm footing.

Growing pressure and rising opportunities

Even beyond the climate targets that have been set, regulatory requirements for the economy are becoming more stringent—for example, through levies such as the “plastics tax.” The European Union’s Green Deal provides for all packaging in the EU area to be reused or recycled by 2030. The Circular Economy Action Plan also provides for products to have long life cycles and be repairable (“right to repair”).

But it’s not just from the regulatory side that pressure is growing. Other stakeholders are also demanding more sustainability from companies or setting their own new standards for sustainable business practices.

Consumers. Today’s consumers are another pressure point since they no longer see sustainable products as simply an alternative.

They are partly basing their purchasing decisions on the sustainability of products and companies. Granted, what some refer to as an “attitude–behavior gap” remains. In other words, consumers don’t always make purchasing decisions that are consistent with their sustainability preferences as expressed in surveys. That said, two-thirds of consumers now say they are changing their consumption habits in favor of a lower environmental impact 1 “A natural rise in sustainability around the world,” NielsenIQ, January 10, 2019. —and are staying true to their word: brands, such as oat-drink maker Oatly, that promote the ecological benefits of their products are recording above-average growth rates.

Employees. Sustainability is already a top criterion in choosing an employer for two-thirds of those under the age of 34. Across all age groups, three out of four employees would like their company to place a greater emphasis on environmental and social issues. 2 Sustainable working environment index 2021 , Epson, June 2020, epson.co.uk.

57% of all start-ups in the consumer-goods sector are ‘green’ start-ups

Investors. The financial sector is, to some extent, already ahead of the real economy when it comes to sustainability. A survey of decision makers from more than 40 investment firms (including BlackRock, Vanguard, and State Street) shows that an ESG-oriented mindset is already an integral element of investment decisions. 3 “The investor revolution,” Harvard Business Review , May 1, 2019.

Increasing demands for sustainability stem partly from investors’ risk management and partly from the increasing incidence of loans linked to sustainability criteria. Furthermore, sustainability-oriented funds are more resilient, as studies show: on average, 77 percent of ESG funds established ten years ago continue to exist today. Compare that to only 46 percent of traditional funds that have survived over the same period. 4 Siobhan Riding, “Majority of ESG funds outperform wider market over 10 years,” Financial Times , June 13, 2020, ft.com.

New market entrants. “Green” start-ups are increasingly gaining market share in consumer-goods segments—be it in the footwear market, where the Californian–New Zealand start-up Allbirds has made a successful entry, or in the food segment, where products made from plant proteins (among others) are increasingly gaining popularity. According to the Green Startup Monitor 2021, three-quarters of all newly founded companies in Germany view their environmental and social impact as relevant to their strategy. In the consumer-goods sector, for example, 57 percent of all newly founded companies are now green start-ups. 5 Klaus Fichter and Yasmin Olteanu, Green startup monitor 2021 , Borderstep Institute for Innovation and Sustainability, 2020, deutschestartups.org. Take, for instance, the marketplace Cirplus, which has set itself the goal of simplifying the currently complex and confusing global trade in recyclates and plastic waste.

In view of the growing pressure from all sides, for established consumer-goods companies, it is no longer a question of whether or not they need to operate sustainably—and most are also clear about what they need to do; however, there is still great uncertainty when it comes to how. What is needed is a sustainability strategy and, above all, a road map to implement the strategy in the context of a transformation.

Moving toward action

Where do companies currently stand in their efforts to make their operations more sustainable? Rating agencies such as S&P try to answer this question systematically by referencing an array of sustainability criteria. As the ESG score of leading consumer-goods suppliers shows, the industry performs well on average (Exhibit 1). In the social dimension in particular, the consumer-goods sector almost universally earns high scores (As and Bs). This means good to excellent ESG performance and an above-average level of transparency in the disclosure of ESG data. The analysis shows that 30 percent achieve a score of A or A+ in at least seven out of ten ESG dimensions, and 52 percent achieve the same in at least five out of ten. There are also champions in individual disciplines: the consumer-goods companies listed below demonstrate strengths in certain sustainability dimensions—typically in areas that are particularly important for their business.

Nestlé has launched the Creating Shared Value program, which assures 30 million farmers and people in rural areas stable agricultural incomes through 2030, as well as the creation of fair and inclusive jobs. By 2030, Danone wants to use solely renewable energy and lower its water consumption by one-quarter. The company was already a pioneer in discontinuing the use of genetically modified feed and supporting farmers worldwide.

Unilever aims to reduce the environmental impact of water, waste, and greenhouse gases per consumer use of product by 50 percent by 2030. The group has long been an advocate of sustainable palm oil.

Henkel aims to triple the value of its business in relation to its environmental footprint by 2030 and, among other things, is relying for certain brands entirely on “social plastic”—that is, old plastic packaging collected from people living in poverty for a fee. In addition, Henkel plans to make all product packaging recyclable, reusable, or compostable by 2025 and to make its operations climate-positive by 2040.

Adidas is already a global leader in sourcing more sustainable cotton (“better cotton”). In doing so, it maintains production levels with minimal environmental impact and supports the livelihood of local producers. In addition, Adidas plans to use only recycled polyester across its entire product range by 2024.

Patagonia is a pioneer when it comes to the circular economy and good working conditions. For many years now, the manufacturer of outdoor clothing has offered to repair older articles and return them to consumers. By 2025, it aims to make its entire business carbon-neutral—including the supply chain, which is responsible for 95 percent of Patagonia’s emissions.

Beyond Meat and Impossible Foods offer product portfolios that are based on sustainable alternatives and have created significant growth in the plant-based protein industry.

Explanation of Exhibit 2

Exhibit 2 shows which sustainability targets ten leading consumer-goods companies aim to achieve by what year. The target year is indicated by the color code (with the palest shade being 2050), the percentage of companies making commitments is shown within the rings, and the magnitude of the planned change is indicated outside the rings. “Committed” means that these companies have committed to making reductions but have not explicitly specified a percentage.

An example of how to read the “Sustainable procurement” chart is as follows: 20 percent of companies want to make their procurement 100 percent sustainable by 2025.

The Honest Company was founded by Jessica Alba for the purpose of promoting cleaner and more sustainable products in the baby space.

The initiatives show how seriously consumer-goods companies are now addressing sustainability. Almost all of them have set ambitious targets in a range of areas, from emissions mitigation and recycling to sustainable procurement and water use (Exhibit 2).

Implementing sustainability goals effectively

Effectively implementing the envisaged sustainability goals is an all-encompassing organizational challenge and often means change for both the product portfolio and the organization, including its culture. Given the scope involved, it is not enough to launch individual initiatives sporadically and hope for success. Instead, sustainability must be seen for what it is: a transformation of company operations spanning the entire supply chain. Four elements are crucial here:

Set the right target level. The first step begins with a realistic outside-in assessment: What are regulatory expectations? Where are competitors raising the bar? What are the expectations of customers and other stakeholders, including investors? It is usually strategically advisable to take the lead in a small number of relevant dimensions and determine what the future minimum requirements will be in all other dimensions. The level of the targets and the speed of their achievement should be based on realistic assumptions and plans. Knowledge of the levers and the technical possibilities to arrive at a realistic ambition is of particular importance.

Plan the transformation and set the framework. Once the target level has been set, senior management should make the transformation a visible priority for everyone and plan it in detail.

To this end, measures need to be developed and incorporated into an overall road map. Governance is also crucial for successful implementation at this point; thus, instituting a sustainability officer at the senior-management level is an important framework condition. This does not necessarily have to be the chief sustainability officer, as long as the organization ensures that the central team works effectively with the operational units and can not only create initiatives but also enforce them.

Secure and track implementation. For the implementation process, it is worth setting up a transformation office that regularly measures the degree of target achievement. This enables the prompt adoption or reprioritization of countermeasures. It is also imperative that adequate resources be made available. To change ways of thinking and behavior within the company, it also makes sense to recruit employees as change agents. In this context, the communication and anchoring of sustainability goals in the organization—for example, through incentive systems—should also be addressed.

Create transparency. Last, investments should be made in data and transparency because retailers, consumers, regulators, and investors are increasingly demanding it. In particular, traceability across supply chains poses a challenge. This makes it all the more important for companies to deal with the sustainability data of their own products right from the start and to develop the corresponding analytical skills.

No function is left untouched when changes of this magnitude are needed: everyone is involved and responsible for bringing sustainability to life in their area—from purchasing to production and logistics to marketing and sales (Exhibit 3). For successful implementation, the key actors in the individual divisions need to develop both function-specific and overarching measures.

In purchasing, for example, the focus may be placed on biologically derived ingredients, recycled plastic for packaging, biodegradable and certified materials, and regenerative agriculture.

To do this, it is first necessary to assess the volume of emissions caused by each purchasing category and what reductions are possible in each area. The procurement team is also responsible for ensuring suppliers adhere to social standards.

In logistics, it is key that companies consider alternative propulsion systems for their vehicle fleets or the use of more sustainable transport options. In the field of warehousing, organizations should review cooling technologies and use renewable sources to ensure energy supplies, employing their own solar panels if necessary.

Production should first optimize its energy efficiency. In addition, consideration needs to be given to the use of renewable and sustainable energy sources for electricity and heat at production sites. It is also necessary to investigate how water and other resources can be used more efficiently and how waste can be reduced.

Meanwhile, R&D teams can work on more sustainable designs and formulations (design to sustainability). This can involve sustainable packaging or formulas for new products that lead to greater sustainability in use—such as laundry detergents that clean textiles thoroughly even at low water temperatures. L’Oreal, for example, has developed the Sustainable Product Optimization Tool (SPOT), an evaluation tool focusing on ecological design on two levels. First, it simulates different design options, evaluates their impact on the environment and society, and identifies improvement measures. Second, SPOT quantifies the effects of sustainability on various product attributes, such as packaging; the environmental footprint of product compositions and chemical processes; and social implications.

The initiatives described above for illustration purposes show that sustainability is not an issue that can be left to a central unit; rather, it reaches deep into all functions of consumer-goods companies. Citizens, policy makers, investors, and new competitors are increasing the pressure to act. Above all, however, it is the companies’ own sustainability ambition that requires a structured and holistic approach if the goals set are to be achieved.

Jordan Bar Am is a partner in McKinsey’s New Jersey office; Nina Engels is a consultant in the Düsseldorf office; and Sebastian Gatzer is a partner in the Cologne office, where Jacqueline Lang is a consultant and Frank Sänger is a senior partner.

Explore a career with us

Related articles.

Digital supply-chain transformation with a human face

Achieving supply-chain resiliency in consumer goods amid disruption

Supply chain steps up: An interview with Kimberly-Clark’s Shane Azzi

May 17, 2024

Advertisement

ESOPs and Sustainable Restaurant Culture

4 Min Read 5.14.2024 By MRM Staff

Denver-based chef Justin Cucci has long been a champion for sustainability at his farm-to table eateries. To date, he has opened six restaurants and venues, turning a former mortuary, gas station and brothel all into restaurants with globally inspired locally sourced menus. Cucci also wanted to create a sustainable culture for his employees and implemented a self-funded 100-percent employee stock ownership plan (ESOP) so his 325-plus Edible Beats employees will now share in the long-term financial worth of the company.

To learn more about the pros and cons of putting an ESOP into place, Modern Restaurant Management (MRM) magazine reached out to Cucci. 

How did the idea of Employee Stock Ownership originate and why did you want to do it?

The idea had been kicked around almost five years prior to the ESOP transaction, in 2017. We had finished building brick & mortar restaurants, and my advisors asked me to think about a succession plan and look ahead to the next chapter of the restaurants. 

Initially there were only two routes to take. One was to sell the restaurant group to a private buyer/buyers or investors, and pretty much take the money and run. The other route was to split the restaurants up into individual entities and try to sell the restaurants piece by piece. Both of those choices felt foreign to me, as I wasn't looking to escape and just peace out, and it also felt like it would short change many of the awesome humans that helped me build the restaurants, and grow them.

So when I found out about an ESOP transaction, it really felt like everybody involved would win, basically a wIn-win-win. My family and I would be able to reap the rewards over time, of selling the restaurants to the employees, and at the same time, as seeing the restaurants through as a legacy and long-term business decision.

Additionally, the employees would win, since there is no money needed from the employees, to achieve being an ESOP, and they would share in any and all growth of the restaurant, and the financial gains.

Finally, the guests/community would win, by supporting an employee-owned business that keeps its gains in the local economy, supporting local businesses and individuals.

What was the process and challenges of implementing the plan?

The process was incredibly complex, and very expensive. The initial cost is almost $500,000 to get all of the pieces in place, and create the plan documents, and submit it to the government agency that oversees it. It requires a large team of lawyers, consultants, CPAs, bookkeeping, and bankers, in addition to a Third-Party Administrator and a Trustee.

The biggest challenge might have been the timing, and how that affected financing (or lack thereof) which was the post COVID years of 2021/2022. There was very little to zero support from banks that I had been with for 15 years, and not only was it impossible to get the funds to pay for the ESOP, but many of the loans we had, were called in, since the bankers felt that we were in a high credit risk industry. So, the transaction became even more complex as we sought to pay for the transaction internally, and to essentially do an owner carry note on the loan.

How does it work and what was initial response from employees?

An employee stock ownership plan (ESOP) is an employee benefit plan that gives workers ownership interest in the company in the form of shares of stock.

From day one, employees were both very interested in understanding the benefits, and structure of the ESOP, and how each employee would benefit from the transaction. At the same time, it is a very complex mechanism that takes time to build value, as a business grows, and as we pay down debt. Essentially an ESOP is a big picture plan that can double as an employee's retirement account. So, employees were sometimes confused at how their own contribution could affect the ESOP and benefit their shares.

ESOPs are a slow build, and grow gradually, then suddenly as the business builds value, pays down debt, and increases profitability.

What lessons have you learned in the time it’s been in place?

We have learned many lessons, as a young ESOP. Mostly that we cannot do too much outreach to employees to help them truly understand the structure, vesting and payout of their shares.  We figured out that an ESOP committee was a strong engine of communication, and we created one that had three members from each of our five restaurants. One hourly FOH employee, one hourly BOH employee, and one salaried manager. 

We also learned that financial education is critical for employees to truly understand what brings value and how they can affect that value. We created "ESOP Boards" for each restaurant, that tracks multiple categories in our gross weekly margin, and gives the staff a much clearer picture of the machinations of each restaurant.

How has the plan affected staffing and retention?

There's no doubt retention has increased because of it, but not at the level we would have liked. We still are having turnover that sometimes seems excessive. And though we know of many employees that are connected to Edible Beats in a much deeper way, because of the benefit programs we have, and due to the fact that we are employee owned. 

But in our industry, there is a transient nature to the hourly employees, and they sometimes struggle to see the big picture, and do not always possess the patience to see the ESOP through to fruition.

What do you think other restaurant owners can learn from your example?

I hope that other restaurateurs are willing to look into the pros and cons of an ESOP, there are too few true employee-centric plans that favor the contributions of the employee. ESOPs do just that and there’s zero cost to the employees. 

• Dynamics 365 Business Central
• IT Professionals

Sustainability in Dynamics 365 Business Central: A New Way to Measure and Manage Your Environmental Impact

• By Aleksandar Totovic, Program Manager

Learn how the upcoming 2024 release wave 1 will enable you to track and report your greenhouse gas emissions with ease and accuracy.

Sustainability is more than a buzzword. It’s a global imperative that demands urgent action from all sectors of society, including the business world. As regulations and expectations around environmental reporting evolve, organizations need reliable and efficient tools to measure and manage their impact on the planet.

That’s why we’re excited to announce that Dynamics 365 Business Central will soon offer new sustainability features that will help you comply with the latest standards and best practices, as well as drive positive changes for your business and the environment. Starting from the 2024 release wave 1, you’ll be able to track and report your greenhouse gas (GHG) emissions across three scopes defined by the ESG standard, using sustainability journals and built-in calculation methods. You’ll also be able to leverage the new Chart of Sustainability Accounts to organize and analyze your emission data with ease and transparency.

The new functionality is designed to oversee and regulate an organization’s environmental footprint by tracking various greenhouse gas (GHG) emissions, facilitating proper insights. This functionality will be a multi-wave investment and at this first release we delivered basic framework as a foundation for future expanding. The first version focuses on GHG emissions, and related to that the solution is focused on three emission scopes defined by the ESG standard. This feature supports the basic process of collecting emission data via sustainability journals, allowing for manual entry of known data, or utilizing built-in methods for calculating emissions footprints.

Chart of Sustainability Accounts

The Chart of Sustainability Accounts forms the foundational structured list used for recording all emissions data. It functions as a comprehensive framework that categorizes and organizes these accounts based on their attributes, such as scope or other groupings. Each account is typically assigned a unique code or number for easy reference and tracking, following the same structure as a traditional Chart of Accounts but customized specifically for monitoring sustainability-related data and metrics within an organization.

This chart typically encompasses categories such as energy consumption, greenhouse gas emissions, waste generation, and other pertinent sustainability metrics. Users have the flexibility to add Account Categories and Subcategories to define how the system behaves, selecting dedicated emissions for tracking, emission factors, formulas, and similar configurations.

In essence, the Chart of Sustainability Accounts serves as the backbone of the Sustainability feature, facilitating effective tracking, measurement, and management of sustainability-related data and metrics within the organization.

Sustainability Journals

Sustainability Journals are designed to track and record sustainability-related activities, and metrics within an organization, using the same user experience as other journals in Business Central. Within the journal, users have the option to input emissions manually if they possess the necessary information. Alternatively, if they lack this data, they can utilize built-in formulas to accurately calculate emissions based on specific known parameters corresponding to various types of sources and accounts.

When posting with a Sustainability Journal, entries are generated on the Sustainability Ledger. Similar to other journal types, users have the flexibility to utilize various templates and batches with specific configurations. They can opt for standard journals or recurring journals to manage sustainability data efficiently.

Sustainability Journal

Sustainability Entries

The Sustainability Ledger organizes all emission data according to the Chart of Sustainability Accounts. When a user posts the Sustainability Journal, all crucial data is recorded within the Sustainability Entries. Posting to these entries can be regulated by specific rules configured in the Sustainability Setup, and users can use dimensions in a manner consistent with other entries throughout Business Central. All reports are generated based on Sustainability Entries. Presently, there are several existing reports available for analyzing and tracking emissions. However, in future releases, Business Central will introduce additional reports for printing or submission to relevant authorities.

Future Development

As mentioned in the introduction, Microsoft will continue to enhance this feature by adding more horizontal capabilities and improving its connection with other features in Business Central, without focusing on industry-specific aspects. The development of new features will depend on research of the key elements for such solutions, compliance with regulatory requirements, and useful feedback from partners. Also, it is expected that ISV partners will use this basic framework to create industry-specific sustainability solutions.

Related posts

Create Dynamics 365 implementation projects easily with the new onboarding wizard  

Seamless integration, seamless operations: Introducing native integration between Dynamics 365 Field Service and Business Central  

Impact of Delocalization Process in the Czech Version of Business Central 2023 Wave 2 Release  

E-Documents as a Global Solution for Business Central  

Citi executive in charge of implementing bank's restructuring departs

• Medium Text

Sign up here.

Reporting by Lananh Nguyen in New York and Manya Saini in Bengaluru; Editing by Krishna Chandra Eluri

Our Standards: The Thomson Reuters Trust Principles. New Tab , opens new tab

Business Chevron

Reddit stock jumps after OpenAI partnership

Shares of Reddit rose 14% on Friday, following a partnership with artificial intelligence firm OpenAI that is expected to draw in more users for the social media platform with AI-enhanced experience and attract more advertising revenue.