What is Sustainability in Business?

Sustainability is a buzzword that is increasingly heard around the office, particularly since the conception of the Millennium Development Goals in 2000 instigating a shift in the way in which businesses operate, calling upon accountability, governance, and compliance. Sustainability is the ability to maintain or support a process continuously over time, and comprises three key pillars: the environmental, the social and the economic. In 1987, the World Commission on Environment and Development published the Brundtland Report, marking a pivotal moment that brought sustainability to the forefront of political discussion. A key factor being the introduction of sustainable development referring to ‘development that meets the needs of the present without compromising the ability of future generations to meet their own needs’, an effort to safeguard our future. Amongst the arena of human-accelerated climate change, economic disparity and poverty, sustainable development sets out to bring balance between economic growth, social equity, and environmental protection.

Through a business lens, sustainability looks at implementing practices that address issues at the triple bottom line, commonly known as ‘the three P’s’: Profit, People, and the Planet. In doing this at every corner of business operation (i.e. supply chains, business partners, and renewable energy usage), companies can ensure profitable turnover to drive business success whilst also bringing positive impact to stakeholders, society and the environment.

Importance of Adopting Environmentally Sustainable Business Practices

Environmental sustainability relates to the conservation of natural resources and protection of global ecosystems to reduce human impact on the environment and the adverse effects of climate change. To achieve this, the Intergovernmental Panel on Climate Change (IPCC) recommends a limit on global warming to 1.5^oC and increased efforts to achieve carbon neutrality. This highlights the significance of companies having to crack down on the source of their greenhouse gas (GHG) emissions so the necessary actions can be taken to reduce them. For example, a study by the IPCC (2022) found that the energy supply sector contributed to 34% of anthropogenic emissions globally. To measure individual impact on the environment, we look at the carbon footprint which can be defined as the total amount of greenhouse gases emitted into the atmosphere, such as carbon dioxide (CO₂) and methane (CH₄). The average carbon footprint of a person living in the UK is 12.7 tonnes CO₂e per year, equating to taking around 32 round-trip flights from London to New York. A company’s carbon footprint incorporates the GHG emissions resulting from its operation, for example from energy sources used to power facilities or manufacturing processes. For a UK company with 200 employees, this roughly translates to 880 tonnes of CO₂e per year. Environmentally conscious and sustainable businesses are determined to reduce their carbon footprint to reduce their overall impact on the environment.

To allow organisations to better understand and report on their emissions, the GHG Protocol (2001) categorised emissions into Scope 1, 2 and 3. Scope 1 emissions focus on GHG’s that a company produces directly from sources owned or controlled by the organisation. Scope 2 focusses on emissions produced indirectly from purchased energy sources, and Scope 3 encompass all other indirect emissions not categorised in Scope 2. This categorisation enables businesses by providing granular solution mapping to mitigate emissions across all areas of business operation.

Another key factor contributing to the importance of sustainable business practice involves the United Nations Framework Convention on Climate Change (UNFCCC) Conference of the Parties (COP), established in 1995. Each year, the UNFCCC hold a conference that plays a significant role in shaping business operations, particularly in the context of sustainability and climate action. The latest of these – COP28 in 2023 – provided a platform where global climate agreements and commitments were made leading to new policies and regulations at a national level. This has a direct impact on business operation as organisations must adapt to these changes as governments may implement stricter emissions targets, carbon pricing, and sustainability standards. Further to this, businesses may face new compliance requirements including reporting on carbon emissions/footprint, adopting renewable energy, or reducing waste, all of which necessitate changes in business processes. Businesses that proactively engage with the outcomes of COP28 are better positioned to navigate the challenges and opportunities of a rapidly changing global landscape.

Tracking Impact Realised Through Sustainability Goals

Simply setting goals around environmental sustainability is impact-less unless these goals are measured and achieved. This requires a structured approach that involves clear objectives, developing action plans, tracking performance and ensuring accountability. Fortune 500 companies have led a charge in sustainable business strategy through the adoption of Environmental, Social, Governance (ESG’s) goals providing a company with a means to evaluate their sustainability and ethics. In effect, ESG’s measure a company’s policies, procedures, governance, and operations and impact on the environment and people. A redefined way of assessing business success and value that goes beyond purely financial metrics. The introduction of Key Performance Indicators (KPIs) to track and quantify progress can also help significantly in enhancing ESG reporting, providing detailed information on company’s environmental impact, sustainability initiatives and overall transparency.

Environmental consciousness acts as a critical touchpoint for businesses through influencing policy, market dynamics, and operational strategies. In a modern world where we expect full transparency and accountability from companies, adopting sustainability goals acts as a forward-thinking and environmentally positive means to achieving profitability financially, as well as for the people and the planet.

Thank you for reading our first post of the series, we will be back next week with the second installment: ‘A Cloud Revolution amidst the Digital Age: Harnessing Cloud Technology for Positive Environmental Transformation’. If you would like more information or to talk with us about how we can support more sustainable technology use through cloud migration, please contact us via the button below.