Sustainability is a Must for Medium and Small Businesses
"Sustainability will be a decisive factor in terms of which businesses will be here
in 20 or 30 years time. It is the future of business.”
- Steve Howard, Chief Sustainability Officer of IKEA Group
If you are a small or medium-sized business owner, you may have read about sustainability, contemplated it for your business, and even implemented some cost-saving aspects of it, such as reducing energy use. However, due to tight budgets, competing priorities, and limited resources – including time – this likely has not been top of mind. In reality, sustainability is a must have for your business because it differentiates you from the competition, can attract new customers, spur innovation, manage risk, and cut costs. All of these are necessary in order to stay viable in a rapidly changing and uncertain economic and technological climate.
Larger companies recognize the many advantages of incorporating sustainability into their operations. According to a G&A study, 82% of the S&P 500 companies published corporate sustainability reports in 2016. These organizations are embracing sustainability because it makes business sense. They are not doing it because they are tree-huggers, and in many cases, it is independent of their beliefs about climate change.
If you are wondering what ‘sustainability’ is, exactly, you’re not alone. Sustainability has many definitions, but the most commonly used is that from the Brundtland Report: “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” Sustainability means reducing negative environmental impact and resource consumption and looking at existing operations from a different lens. This can encourage creativity and innovation, which can lead to new or altered products and services and ultimately in higher profits. In a 2013 MIT Sloan survey, 37% of 2600 managers and executives identified sustainability efforts as a source of profit. As a result, 48% of the responding companies said they changed their business models as a result of opportunities offered by sustainability.
Sustainable business practices, when shared with your customers, can also attract new customers who care about this. While there is a lot of focus on millennials and how to attract their mind and dollar share, an often-overlooked market segment, which runs across generations, is the Lifestyles Of Health And Sustainability (LOHAS) consumers. This niche segment has gown significantly, and now represents one in four adult Americans and over $290 billion market . Implementing sustainability and sharing your practices externally will likely attract individuals from this market segment.
While all this is great, as a small or medium-sized business, you are still faced with budget and other resource constraints. That being the case, here are some relatively easy actions that your business can take to begin the transition to a more environmentally sustainable business model:
Reduce trash costs: Assign someone to track the waste and recycling generated by your business for a week or two. This can be as simple as going out once a day and checking the bins and noting it on a tracking sheet. If the bins aren’t fully filled before your waste hauler picks them up, reduce the number of pick-ups per week.
Identify operational and product improvements: Launch a ‘Let’s Innovate’ challenge. For a week, ask your staff to submit ideas for new or improved products and services and ways to improve their daily work. Most of the time, the individuals who are closest to the production or delivery of a product or service will have ideas to improve or streamline but may not have an outlet to voice those ideas. The person with the most eco-friendly idea wins. Be sure to recognize the winner.
Get a baseline: Ask for sustainability/green volunteers and form a Green Champions team. These individuals can take stock of what your business is already doing in terms of sustainability. You may already be taking sustainability steps that are part of your daily operations, such as reusing packaging that comes to your mailroom, or setting the printers to print double-sided. These are small things but they add up- cost and resource-wise. The list will create a baseline of where you currently stand in terms of sustainability actions.
Formulate a plan: Make a laundry list of the suggestions provided from the challenge, and identify the ones that you will implement in the next six to twelve months. You can ask for volunteers from the Green Champions team, or from those who suggested the improvement ideas – who will likely be more than happy to support the implementation of streamlined operations or an improved or new product or service that makes their life easier.
These are by no means the only ‘easy’ sustainability actions you can take, but they are a start. Once you will build momentum, you and your team will begin identifying additional actions to take and incorporating these into regular business planning. As mentioned before, while some of these steps may seem simplistic, many simple things are easy to do and also easy not to do. Doing them creates momentum moving forward; not doing them leaves you where you are today.