The concept of Sustainability in business (also known as Corporate Sustainability) centres on meeting present needs without impeding the ability of future generations to meet their needs. Investopedia indicates that the concept of sustainability comprises of three pillars: economic, environmental, and social. The pillars can also be referred to informally as profits, planet, and people. They are sometimes also referred to as the triple bottom-line.
The Sustainability approach encourages businesses to make decisions in terms of years and decades rather than on the next quarter’s earnings report and to consider more factors than simply the profit or loss involved. In 1999, the United Nations introduced the world’s largest corporate sustainability initiative encouraging companies to align their strategies and operations with universal principles on human rights, labour, environment and anti-corruption and take actions to advance societal goals.
The question one will then ask is “how can a business achieve sustainability”? David Newman a Senior Strategist lists the following as strategies that businesses can employ to achieve corporate sustainability;
Changing how the business views sustainability benefits – from cost reduction to revenue growth- This involves being able to show the Board that the sustainability approach is not just about cost reduction but that it will definitely guarantee a return on Investment (ROI) though it may be take a longer time and be more painstaking.
Moving sustainability out of departmental silos into shared business goals– This entails not assigning the responsibility of sustainability to only one department. The responsibility of sustainability should be shared across board an organization which each department being held accountable for a portion or percentage.
Reporting and sharing the things that matter with the people who care –These deals with being able to identify the target audience and frequency of sustainability reports. Sustainability reports shouldn’t just be a mere box checking exercise.
Knut Haanaes also recommends the following practical tips to help businesses achieve sustainability; i. Aligning strategy with sustainability, ii. Placing compliance first before competitive advantage; iii. Being proactive rather than reactive; iv. Being transparent;
Engaging the Board and ecosystem.
Another way of successfully implementing a Corporate sustainability framework has been identified as ensuring that employees of businesses believe in and are engaged in achieving the vision.
Social and environmental concerns are usually seen as conflicting with financial goals of businesses. Therefore, another question that would most likely be looming in the minds of some business owners would be “what’s the need for Corporate sustainability, is it worth embracing?” An article in the Harvard Business Review credited to Tenise Whelan and Carly Fink indicates that embedded sustainability efforts clearly result in a positive impact (emphasis mine) on business performance. The Article with facts and figures from relevant studies listed the following as benefits of corporate sustainability; Improving financial performance; Building customer loyalty; Fostering innovation; Driving competitive advantage through stakeholder engagement, improving risk management, attracting and engaging employees.
Professor Michael H. Posner also opines that Business sustainability is essential to the long-term prosperity of global companies. The listed benefits are indeed great and every business enterprise would wish to enjoy such benefits over time.
The practice of Corporate sustainability is still in a nascent stage in Nigeria as a lot of business enterprises are yet to embrace and incorporate it in its strategy. However, it is gaining more support and awareness in recent times. It is worthy to mention that the Nigerian Stock Exchange (NSE) released sustainability disclosure guidelines in December 2018, A reporting compliance timeline was laid down alongside the rules. This indicates that there is a need for listed businesses to imbibe Corporate sustainability in order to have a sustainability report. The Guidelines are mandatory for companies listed on the Premium Board of the NSE.
Businesses are enjoined to take deliberate steps towards achieving corporate sustainability regardless of whether they are under a regulatory obligation to do so or not. There is need for businesses to think of the future not just in terms of profits alone but also the overall impact of their business operations on people and the environment. The best time to start is today.
Uloaku Ekwegh
Ekwegh is a private legal practitioner with over 15 years legal experience in law firms and as in-house counsel. She is also a fellow of the Institute of Management Consultants. She also a member of the Chartered Institute of Arbitrators.
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