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How Environmental Sustainability in Business is Making an Impact

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Lindenwood MBA students discuss environmental sustainability in business

With the growing threat of global climate change and other environmental threats, individuals and organizations alike are growing more and more conscious of environmental sustainability in business. For consumers, particularly in the Millennial and Gen Z cohorts, sustainability is no longer an option; it’s an expectation. For companies, that means juggling multiple stakeholders and managing complex moving parts to move sustainable business practices forward.

Embracing sustainability at the business level isn’t easy. It requires research, analysis, critical thinking, and hard decisions. When done well, however, it makes a dramatic difference, not only in terms of perception, but also in business success. Let’s take a look at the ways companies are changing the way they work — and doing well — by prioritizing environmental sustainability in business operations.

PR as a Partner for Sustainability in Business

Mentioning PR and environmental sustainability in business at the same time may elicit scoffs. Companies are often accused of “greenwashing” for PR purposes; that is, engaging in performatively sustainable practices intended more to raise brand awareness and improve the company’s reputation than actually help the environment.

Nevertheless, when done well, public relations can be an important partner in sustainable initiatives. When Paul Polman was named CEO of Unilever in 2009, for example, he publicly announced the company’s commitment to sustainability practices in dramatic, unequivocal fashion. Within a decade of Polman’s leadership, the company reduced energy and water usage and waste, began purchasing agricultural raw materials from sustainable sources, and saw substantial growth alongside a reduction in costs.

Unilever is a striking example of the way business sustainability goes hand in hand with business success. Too often, being environmentally friendly is viewed as a tradeoff for reduced revenue, but when done well, that’s just not the case.

Sustainable Marketing: Tying the Environment to the Brand

Again, when it comes to reaching younger consumers in particular, environmental sustainability is no longer optional. As businesses put in the work to make their practices more sustainable, they also need to find the right message to communicate to consumers that this is what they’re doing.

LEGO, the iconic creator of children’s building toys, has invested a great deal of time and effort in its sustainability messaging. Broadcasting an affirmative commitment to making every LEGO brick sustainable by 2030, the company stated: “Big ideas may start small, but they will help us build a greener planet one brick at a time.”

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LEGO knows that its target audience of young parents, many of whom grew up playing with its products and are now raising children of their own, are part of a generation that values sustainability. By presenting this message in its own brand voice, LEGO has improved its reputation and committed to ingraining the value of sustainability in its customers. It’s an approach that gets results with this target audience: a 2018 Morning Consult report found that Lego ranked in the top 25 most loved brands by young adults, the only toy manufacturer so ranked.

Perhaps even more so than general marketing efforts, sustainability marketing needs to be well thought through to ensure the message lands with consumers instead of sounding like “greenwashing.” It’s also important to be sustainable within the marketing campaign itself — after all, marketing has its own carbon footprint. When done well, though, companies can build tremendous goodwill and brand loyalty.

Better Efficiency by Way of Corporate Sustainability

The benefits of environmental sustainability in business often aren’t just environmental; they can have a direct impact on a company’s bottom line as well. 

In 2011, Puma, the world’s third-largest sportswear manufacturer, completed a groundbreaking comprehensive study of its entire supply chain detailing the cost of its impact on the environment. Puma’s analysis found that the combined cost of the carbon it emitted and the water it used in 2010 was over $130 million. The company then implemented sustainability goals that dramatically cut those costs over the next several years, improving its bottom line by millions of dollars annually.

It’s a striking example of what has proven to be a demonstrable trend: businesses that invest in sustainability benefit from it financially. A study by the Centre for Sustainability and Excellence (CSE), reviewing over 600 companies across the United States and Canada, found 73 percent of the highest performers in sustainability also recorded higher revenue in 2017 compared to 2016.

From a strictly financial point of view, sustainability makes sense. Waste costs money, and beyond that, the kind of in-depth analysis that true sustainability demands also forces businesses to be intentional about their practices, finding efficiencies across the board. Moreover, as governments move toward requiring sustainability and enforcing those requirements through regulation, businesses that get out ahead of the problem will be best positioned for the future.

The Power of Defining a Sustainable Business Strategy

Climate change is the defining issue of our time. It’s a problem that is constantly on the minds of two generations that are an ever-larger share of the market, and it’s likely to dominate political discourse and thus government action for many years. Any business that wants to be successful long-term needs to incorporate environmental consciousness into its strategy.

In order to make the most of an environmentally friendly approach, though, companies need to be thoughtful and intentional in order to overcome consumer skepticism and generate real goodwill. An effective sustainability strategy means taking a close look at the entirety of a company’s operations and assessing the overall environmental impact. It means being innovative and prepared to make tough decisions from top to bottom. Finally, businesses have to commit, without equivocating, and develop a marketing strategy that links the broader goal of environmental sustainability to the part that their organization has to play.

In short, an effective sustainability strategy requires leadership, and that means we need leaders trained in sustainable business practices. If you’re ready to become such a leader, take the first step toward your online MBA from Lindenwood University.

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