The interest in adopting a greener lifestyle is now less of a trend, but more of a necessity in recent years as environmental degradation and climate change becomes more widespread and prevalent. Traditional business models have been compelled to “adapt” in order to meet new market needs as a result of the global shift toward green consumerism. Here’s why sustainability is important in business, now more than ever.
Green Lifestyle, Green Consumption
The concept of green living and consumption has become increasingly popular throughout the world, particularly in developed countries, and is rapidly expanding to middle-income and higher-income developing countries. The conscious purchase and use of ecologically-friendly products that do not impair human health or threaten the natural ecosystem are referred to as green consumerism. It stems from a desire to safeguard resources for future generations while also enhancing people’s quality of life.
According to a 2019 consumption trends survey, the majority of consumers are prepared to spend a 10% premium on food packaged with environmentally-friendly materials. In fact, COVID-19 has prompted consumers to pay more attention to their health and the environment and to actively seek out products that are socially responsible, as well as collaborate with partners who offer long-term sustainable business solutions. Green and environmentally-friendly products are prioritised as a key criterion for high-quality products and services as part of green consumerism.
In August 2021, 85,500 businesses exited the market, with an average of 11,400 businesses closing per month as a result of the global pandemic. But at the same time, it helped push businesses to rethink their operations and use the opportunity to transform their operations and see the need to evolve in order to adapt. So why sustainability is important in business? There’s growing arguments (and evidence) that sustainable development as a new “vaccine” for businesses, allowing them to protect themselves, discover ways to overcome obstacles, preserve stability, and maintain values for society and the economy. Here’s how.
Why Sustainability is Important in Business
- Ensures economic sustainability
Sustainable development aids the economy’s rapid growth and development while also ensuring its safety. The growth and development of a healthy economy can serve people’s needs and improve their living standards while avoiding future economic crises or stagnation, particularly the heavy burden on people’s debt so that it does not become a burden for future generations.
- Ensures social sustainability
Sustainable development ensures social sustainability as well as economic sustainability, as evidenced by the HDI index, which measures social justice and human development. Social sustainability encompasses public health, nutrition, and education; eradicating hunger and poverty; ensuring social justice; and providing chances for all members of society to be equal, thereby reducing the risk of social conflict or war.
- Ensures environmental sustainability
Natural resources are rapidly depleting in quantity and quality. As a result, it is vital to encourage sustainable development through a circular economy, which aims to maximise the use of natural resources while also conserving and improving the quality of life. Assuring that people can live in a green, clean, and beautiful environment, with a truly harmonious interaction between society and nature, in order to meet current living demands while also allowing future generations to meet their resource and environmental needs.
- Helps improve brand and competitive advantage
Businesses can improve their brand’s reputation, develop trust with partners and the social community by demonstrating concern and respect for environmental and social considerations. Through a sustainable development strategy, they will have many opportunities to attract capital and human resources to serve business expansion while contributing to a green economy and its longevity.
How Do Businesses Develop Sustainability?
- Define clear business goals
When launching a new initiative or activity, every company must ask itself: “Why do I do what I’m doing?” This is the company’s guideline for everything from recruitment to marketing, sales, and new product development.
- Building an effective business management system
Entrepreneurs, managers, and business owners must stick to this long-term approach at every level of development if they want to develop sustainably. Furthermore, corporate governance must be applied synchronously and effectively in order to secure the long-term viability of businesses, resulting in a significant competitive edge in the marketplace.
- Constantly developing and innovating
In the context of global economic integration, and particularly prior to the so-called Fourth Industrial Revolution, innovation and creativity are critical to the enterprise’s survival and progress. In a business, innovation and creativity include not only the development of new products and technologies, but also changes in how firms communicate with consumers, how they are cared for, and how staff connect with one another.
The New Business Trend
The manufacturing business has changed as a result of climate change and in the competition to attract customers who prefer a green lifestyle. In the fashion sector, for example, multinational brands such as Nike, Adidas, Zara, H&M, Levi’s, and others have taken steps toward sustainable production, helping to reduce environmental stress and climate change. Nike has committed to using 100% renewable energy in its factories by 2025; Zara has pledged to use only organic or recycled cotton, linen, and polyester to create garments by 2025, limiting hazardous production; and H&M currently uses 35% recycled materials in its products and aims to use only this material by 2030.
In adopting sustainable production, German car manufacturer BMW has rolled out its i3 electric car, created using a technology that saves 50% of energy and 70% of water, where 95% of the vehicle’s structure can be recycled. Swedish furniture retail giant IKEA is also phasing out single-use plastic products in its stores and restaurants by 2020, with the goal of reducing its overall climate impact per product by 70% by 2020.
Businesses across the world are working towards the aim of using 100% renewable energy for their entire operations. Many companies have made methodical investments in technology and equipment for manufacturing lines in order to optimise operations and move toward green production and long-term development. Those investing in renewable energy systems plan to actively employ clean energy, as well as methods to preserve power and water throughout the manufacturing process. Shops and supermarkets, in addition to using ecologically friendly materials and packaging instead of nylon and single-use plastic, have prioritised the manufacture and marketing of “green” products.
Concerns About Greenwashing
It’s clear that sustainability is indeed important in business. But as environmental and sustainable initiatives became fashionable and appealing to consumers, businesses are jumping on the bandwagon and turning it into a competitive advantage. However, no company can go “green” overnight; integrating sustainability into all elements of a company requires time and resources. As a result, they employ marketing strategies to quickly construct a “greener” picture of their operations known as greenwashing.
Companies can go green without a defined definition and standard by avoiding the large gap that is sustainability. Brands are not accountable since terms like “ethical” and “eco-friendly” have no legal definition. Furthermore, the general public is unaware of what is actually going on in the production supply chain. For example, some products on the market are labelled ‘all-natural’. But this is an ambiguous and misleading term for consumers, given the fact that substances such as arsenic, uranium, mercury, and formaldehyde are all natural but they are completely toxic. Therefore, “all-natural” is not necessarily green or environmentally-friendly. It is therefore critical to hold companies accountable when they do greenwash as well as ways to avoid being duped by greenwashing in marketing.
Now that you’ve read why sustainability is important in business, you might also like: The World’s 50 Most Sustainable Companies in 2022