Key steps in developing sustainable business practices
According to research carried out between 2009 and 2017 by MIT Sloan Management Review (MIT SMR) and The Boston Consulting Group (BCG), across 118 countries and with more than 60,000 respondents, there are certain fundamental steps to be taken by businesses, in developing sustainable business practices.
While the research stresses that businesses should not rely solely on government intervention to address major sustainability topics such as climate change, it draws attention to international initiatives guiding companies in dealing with – and communicating their performance on – environmental, social and governance (ESG) issues, including:
- the UN’s Principles for Responsible Investment (UN PRI), to which over 1,600 investment organizations have committed;
- the Sustainability Accounting Standards Board (SASB) in the U.S., developing sustainability accounting standards and a materiality matrix identifying, for businesses, key sustainability issues;
- the UN’s Sustainable Stock Exchange Initiative, aimed at the creation of more sustainable capital markets through the collaboration with stock exchanges.
According to MIT SMR and BCG’s research, companies should take certain key steps in developing sustainable business practices Tweet This!, including the following:
- The importance of a sustainability strategy: while 90 per cent of executives consider sustainability as important, only 60 per cent of businesses have a sustainability strategy in place, despite the great significance of having a real sustainability strategy fully embedded into a company’s business strategy. The survey also found that the percentage of companies with a sustainability strategy increased in Europe, Latin America and Australia.
- Concentrating on material issues: businesses focused on material issues, with their sustainability efforts directly connected to material business issues, reported up to 50 per cent extra profit from sustainability – successfully connecting strategic necessity to strategic opportunity.
- Organizing your business properly in order to achieve your measurable objectives: building sustainability into business units doubles the likelihood of your organization profiting from its sustainability initiatives.
- Building a business case for sustainable business practices: although 60 per cent of companies had a sustainability strategy, only 25 per cent had developed a clear business case regarding their sustainability efforts.
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This article was compiled using a report by MIT Sloan Management Review (MIT SMR) and The Boston Consulting Group (BCG). For the sake of readability, we did not use brackets or ellipses but made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original please revert to the link below: