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November 18, 2022
How to be a sustainable company
A sustainable company is, by definition, one that can be sustained and maintained in a profitable manner over time. Yet, when we talk about of a sustainable company, we do so by including in its definition concepts that transcend the purely economic, where income exceeds expenses so the balance shows positive and not red figures.
When talking about a sustainable company, we refer to a business that can be maintained for a long time without exhausting resources or without causing serious damage to the environment.
Due to the climate emergency we are currently experiencing and as a way of economic activity also contributing to the achievement of the UN Sustainable Development Goals, the European Union is promoting, through its European Funds, this ecological transition of the economy by helping and demanding from companies, especially those benefitting from this aid, not only to become digital and resilient, but also sustainable.
Surveys show that an increasing number of companies are becoming aware of this major environmental concern and consider that designing strategies related to sustainability are a must to be competitive.
A study comparing companies that adopted environmental and social policies with those which did not provides empirical support for this view. High-sustainability companies significantly outperformed their counterparts over a period of 18 years in terms of market capitalisation and other accounting criteria, such as asset performance and return on equity.
As for equity market returns on the stock market, high-sustainability companies experienced an abnormal stock performance, 4.8% higher than low-sustainability companies. They also showed lower volatility in results.
Therefore, it comes as no surprise that more and more companies are exploring how environmental, social and governance results can contribute to their financial results.
Steps towards sustainability
The Green Business Bureau has defined 10 steps for companies to become more sustainable and gear their purpose, culture and focus towards sustainability.
The steps are summarised as follows:
Step 1: Define their vision, mission and values
Step 2: Create a sustainability committee or green team
Step 3: Benchmark and assess their current sustainability performance
Step 4: Engage their employees
Step 5: Plan, set goals and prioritise based on more than 400 GBB initiatives
Step 6: Implement the plan, establish and communicate the new policies and practices
Step 7: Leverage the GBB Scorecard to track progress and measure results
Step 8: Analyse their results and compare to goals and benchmarks
Step 9: Celebrate and communicate their accomplishments
Step 10: If they're ready, get B Corp Certified or continue making improvements until they meet the B Corp standards
With regard to B Corp, it is worth noting that this certification's Spanish delegation has published "Movimiento B Corp", a guide that explains the importance of companies using their strength to generate a positive impact and that intends to be used as a model for companies to become more sustainable, regardless of whether they want to obtain this stamp certifying them as such.
Structured into four blocks (description of the movement, the benefits of being a B Corp, a B Impact Assessment and a quick start guide), this book aims to collect all resources available to companies so each company can contribute to building a sustainable, inclusive and regenerative economy.
A long journey
There are many different ways in which a company can decide to be more sustainable, both socially and environmentally. The decision and route will depend on factors such as the size and structure of its organisation, whether it produces a physical product and its specific sustainability goals. Partnering with non-profit organisations, educating employees on these issues, encouraging volunteering and rethinking every aspect of their supply chain are also methods geared towards becoming more sustainable.
Mind you, any company that decides to embark on this journey should be aware, especially if it has never undertaken a sustainability initiative, that it will neither be easy nor comfortable, as it is common to experience fluctuations in the income statement due to having to change some production processes or materials.
However, considering the long-term benefits that this new policy will bring to both the organisation and the environment can help to facilitate the task. In addition, we recommend involving and receiving the support of professionals that adopt sustainability as one of their main pillars.
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