What Is Corporate Sustainability? Learn About its 3 Pillars that Drive Long-Term Growth

The term ‘corporate sustainability’ is not just a buzzword to make businesses look good. It has become imperative for the survival of the industry and the ecosystem, and leaders have begun to acknowledge that. Simply put, it is the practice of running a business keeping in mind the needs of the present while saving for the future. In other words, it looks at ways in which organizations can make the environment healthier. In this blog, we will discuss what corporate sustainability is, understand its importance, and take a closer look at its three pillars – economical, social, and environmental.

What is Corporate Sustainability?

Corporate sustainability, which falls under Environment, Social, and Governance (ESG) practices, ensures that businesses work in accordance with environmental, social, and economic considerations. They do this by undertaking ethical waste management techniques, using renewable energy, and establishing sustainable business practices, among other things. Further, it takes into account the impact that a company has on its stakeholders, employees, customers, society, and environment.

Also Read: What is Corporate Strategy and its Types

Why is Corporate Sustainability Important?

There are many benefits to practicing corporate sustainability. These include:

• Reduce negative environmental impact: Corporate sustainability aims to minimize the impact on the environment by reducing industrial waste, preserving resources, and using sustainable business practices
• Holding businesses socially responsible: Companies have a responsibility towards their stakeholders, including customers and the society they operate in. Corporate sustainability holds businesses socially responsible through the judicious use of resources and reduction in wastage
• Reduces costs: Through corporate sustainability, companies can reduce wastage and become more efficient. This can help in reducing operational costs
• Gain customer approval: Customers are getting increasingly concerned about the environment, which is leading them to choose environmentally-friendly brands

Corporate Sustainability vs Corporate Social Responsibility

Corporate sustainability and Corporate Social Responsibility (CSR) are closely related but distinct business practices. CSR is a broader term, used to describe the actions companies take in the best interests of society and the environment. It includes activities such as philanthropy, volunteerism, and ethical business practices.

Corporate sustainability, on the other hand, is a business strategy that companies adopt to make a positive impact on the environment and society at large. This involves adopting sustainable practices such as reducing waste, conserving resources, and using renewable energy sources.

To summarize, corporate sustainability focuses on the environmental and economic aspects of a company’s operations, while CSR looks at the social aspect of the business.

The Three Pillars of Corporate Sustainability

Corporate sustainability has three main pillars—economic, environmental, and social. Companies can become sustainable by integrating these three pillars into their business strategy. Let’s understand what they imply.

The Economic Pillar

The economic pillar is necessary for the business’s existence in a sustainable environment. It ensures sustainable growth, profit, and the economic viability of businesses. This involves managing resources judiciously, designing policies that encourage investment in environment-friendly resources, and promoting fair trade practices.

The Environmental Pillar

The environmental pillar gets the most attention. This focuses on reducing the company’s carbon footprint, packaging waste, and any other environmental damage it causes—for instance, unethical disposal of packaging or other kinds of waste.

Economic sustainability requires a company to not harm the environment and society while being financially viable, profitable, and competitive. This can be fulfilled by adopting sustainable business practices that minimize pollution and waste, conserve natural resources, and protect the environment. For example, companies can use sustainable materials and invest in renewable energy, all of which are cost-effective and environmentally friendly.

The Social Pillar

The social pillar ensures that companies get the support and approval of their employees, stakeholders, and the local community to run a sustainable business. The support leads to fair treatment of different parties, ethical supply chains, and respect for each party. Additionally, the pillar also focuses on creating a positive impact in the local community and contributing to their development through philanthropy.

How to Implement Corporate Sustainability

Here’s a step-by-step guide on how to implement its strategy.

Step 1: Set Goals

The first step is to develop sustainability goals. These should align with the company’s long-term goal. Remember, your sustainability goals should be specific, measurable, achievable, relevant, and time-bound (SMART). Thereafter, they should be communicated to all the stakeholders such as employees, investors, and shareholders.

Step 2: Develop a Sustainability Plan

Once you have defined the goals, the next step is to develop a plan. The plan should outline the steps the company will take to achieve its sustainability goals.

Step 3: Monitor Progress and Ask for Feedback

After implementing a sustainability strategy, monitor your progress against your goals. You can set metrics and KPIs to measure your sustainability performance. Additionally, you can ask for feedback from people involved in the sustainability plan.

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Frequently Asked Questions  

1. Why are the Three Pillars of Sustainability Important?

The three pillars of sustainability are important because they promote the idea that companies need to balance social, economic, and environmental concerns to achieve corporate sustainability.  

2. What is the Most Important Pillar of Sustainability?  

All three pillars hold a unique significance in achieving corporate sustainability. Each pillar contains elements that ensure that companies achieve operational excellence without causing damage to the people and planet.  

3. What is the Goal of Corporate Sustainability? 

The goal of corporate sustainability is to reduce the negative impact of businesses on the environment.