Is sustainability a focus area for strategic managers in 2022?
With an increasing focus on environmental awareness across most industries, incorporating sustainability among your business goals is important.
Green businesses are proving to be better at revenue generation and brand reputation despite the initial cost to set up sustainable ventures.
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A recent report by Maryville University stated that S&P companies with sustainability as one of their strategic development goals saw an 18% higher ROI than others. With climate change dictating policies across world forums, sustainability can be expected to be a key area for strategic planning processes in the future.
Business managers should focus on sustainability strategy and understand how it can be incorporated into their business.
Sustainability in business
Sustainability in business focuses on operating an organisation without negatively harming the environment. Building a sustainable business requires you to have the best interests of local and global environments and reduce the carbon footprint of your organisation.
Contrary to popular belief, integrating sustainability in your strategic management process isn’t all altruistic. Many of the businesses that have a positive social and environmental impact have tripled their incomes in the last few years.
Why should sustainability be a strategic goal for businesses in 2022?
Apart from the positive press and a subsequent good brand reputation, there can be other benefits of having business sustainability strategies for your company. Here are the top advantages:
- An enormous reduction in business costs
Making your business sustainable might take a significant initial investment, but it can help you reduce your long-term business expenses. According to a study by McKinsey, 33% of businesses that integrated sustainable practices were able to reduce costs by 19% from the previous year.
Elytus, a renowned client service provider, is an example of this. It managed to save more than $11 million over the last 10 years through its sustainable business practices.
- Improvement in brand reputation
Going green not only reduces your operational costs over time, but can also help you earn a good reputation in the market. The millennial generation views commitment to environmental protection as a huge positive. Therefore, companies with sustainable practices can improve their reputation among their target audience by going green.
For example, Lego gained a lot of popularity for its decision to manufacture Lego sets from plant-based sources. The company aims to produce all of its products and packaging from sustainable materials by 2030.
- A growing market for sustainable goods
People have stepped up their commitment to using sustainable products in the last few years. Waste recycling, organic food and a blanket ban on single-use plastics have skyrocketed among young people.
Therefore, there is a growing market for products that contain sustainable ingredients or have been produced in an environmentally-friendly way. According to a Harvard Business School study, 73% of global consumers in 2019 were willing to adapt to sustainable products and change their consumption habits.
- The business can gain a competitive advantage
Making your business sustainable can help you gain a competitive advantage in the global markets. According to a Harvard Business Review, 70% of S&P companies have included sustainability as a primary focus for their strategic business plans.
The recent rise of sustainability
Although sustainability in your strategic planning can have multi-fold benefits for your business, the global response to the idea of sustainable businesses has been slow. Here are the primary reasons why sustainable businesses have not become the norm even now.
- Lack of resources: Most businesses don’t have strategic managers who are aware of sustainable measures or are capable of leading green changes.
- Uninterested employees and senior management: Employees and management in many organisations are unwilling to change their consumption habits due to a lack of awareness.
- Inability to track the results of sustainable efforts: Many businesses don’t make an effort to go green because they lack the tools and resources to measure the outcome of sustainable practices.
Sustainability going forward
Making your business sustainable might prove to be a challenging goal, but it is worth the effort. The solution lies in crafting sustainable business strategies and having several green business goals.
Here are a few ways in which you can help your company achieve its sustainability goals as a strategic business manager.
- Create a proactive sustainability committee that can implement sustainable practices
- Encourage recycling at your workplace
- Motivate your employees for green commuting or carpooling
- Offer remote working options to your employees to help them avoid commuting
- Scale up your digital transformation efforts to reduce your paper consumption.
Integrating sustainability into your business strategies can result in better revenue generation and less expenditure for brand marketing. The sustainability measures will have a positive impact on your company.
However, incorporating sustainable ventures and business decisions can be tricky without proper research. You should invest time into a well-designed strategic business management programme that emphasises growing a sustainable business.
The GISMA Business School in Germany offers a great MSc Strategic Business Management programme awarded by The University of Law that can help you understand the expectations of a dynamic business sector.
This master’s in strategic management teaches you to shape and implement effective business strategies pertaining to a wide range of issues, including sustainability. The programme has a relevant module on global business strategy and leadership, which teaches you how to take leadership on different global issues and develops your strategic management skills.
Click here to view other features of the strategic business management programme at GISMA.
– This article was written by Sweha Hazari and edited by Olly Cox.