sustainability is the business plan

Business Essentials
Leadership & Management
Credential of Leadership, Impact, and Management in Business (CLIMB)
Entrepreneurship & Innovation
Digital Transformation
Finance & Accounting
Business in Society
For Organizations
Support Portal
Media Coverage
Founding Donors
Leadership Team

Harvard Business School →
HBS Online →
Business Insights →

Business Insights

Harvard Business School Online's Business Insights Blog provides the career insights you need to achieve your goals and gain confidence in your business skills.

Career Development
Communication
Decision-Making
Earning Your MBA
Negotiation
News & Events
Productivity
Staff Spotlight
Student Profiles
Work-Life Balance
AI Essentials for Business
Alternative Investments
Business Analytics
Business Strategy
Business and Climate Change
Creating Brand Value
Design Thinking and Innovation
Digital Marketing Strategy
Disruptive Strategy
Economics for Managers
Entrepreneurial Marketing
Entrepreneurship Essentials
Financial Accounting
Global Business
Launching Tech Ventures
Leadership Principles
Leadership, Ethics, and Corporate Accountability
Leading Change and Organizational Renewal
Leading with Finance
Management Essentials
Negotiation Mastery
Organizational Leadership
Power and Influence for Positive Impact
Strategy Execution
Sustainable Business Strategy
Sustainable Investing
Winning with Digital Platforms

What Does "Sustainability" Mean in Business?

10 Oct 2018

A growing number of organizations are integrating sustainability into their business strategy —realizing they can do well by doing good. In a recent McKinsey survey , 70 percent of respondents said their companies have a formal governance of sustainability in place. But what exactly does it mean to be “sustainable” in business?

In business, sustainability refers to doing business without negatively impacting the environment, community, or society as a whole.

Sustainability in business generally addresses two main categories:

The effect business has on the environment
The effect business has on society

The goal of a sustainable business strategy is to make a positive impact on at least one of those areas. When companies fail to assume responsibility, the opposite can happen, leading to issues like environmental degradation, inequality, and social injustice.

Sustainable businesses consider a wide array of environmental, economic, and social factors when making business decisions. These organizations monitor the impact of their operations to ensure that short-term profits don’t turn into long-term liabilities.

Examples of Sustainability in Business

Many successful organizations participate in sustainable business practices, however, no two strategies are exactly the same.

Sustainable business strategies are unique to each organization as they tie into larger business goals and organizational values. For instance, sustainability in business can mean:

Using sustainable materials in the manufacturing process
Optimizing supply chains to reduce greenhouse gas emissions
Relying on renewable energy sources to power facilities
Sponsoring education funds for youth in the local community

Why Is Sustainability Important?

Beyond helping curb global challenges, sustainability can drive business success . Several investors today use environmental, social, and governance (ESG) metrics to analyze an organization’s ethical impact and sustainability practices. Investors examine factors such as a company’s carbon footprint, water usage, community development efforts, and board diversity.

Research shows that companies with high ESG ratings have a lower cost of debt and equity, and that sustainability initiatives can help improve financial performance while fostering public support. According to McKinsey , the strongest motivating factors to adopting a sustainable mindset in 2017 were to align with a company’s goals, missions, or values; build, maintain, or improve reputation; meet customer’s expectations; and develop new growth opportunities.

The overlap between social and environmental progress and financial gain is called the shared value opportunity . In other words, “doing good” can have a direct impact on your company’s ability to “do well.” Due to this opportunity, it’s clear why many businesses have adopted these practices. Find out how to make your business more sustainable by following these four steps to align your strategy and mission to create shared value.

How to Create a More Sustainable Business Strategy

There are several ways you can go about transforming your organization’s purpose into performance. Here are a few steps to follow to create a more sustainable business strategy .

1. Assess the Problem and Define Objectives

The first step to driving change is assessing what sustainability means to your team, company, industry, and client. Consider the big problems each of these groups thinks is a priority.

To guide this process, consider asking questions, such as:

How much waste is the organization creating?
Is our company culture struggling?
Are our hiring practices attracting diverse job candidates?
Is our product targeted to help a certain audience?
What impact does our company have on the local community?

Answering these types of questions will help you establish your company’s sustainability objectives.

Quick Tip: Need help defining your sustainability objectives? Take the SMART goals approach as you move through these steps. Making sure your goals are “SMART”—specific, measurable, achievable, relevant, and time-bound—in this early stage can save you time in the future.

2. Establish Your Mission

Once you’ve agreed on concrete objectives, you’re ready to define your company’s mission. A distinct mission statement is an important part of becoming a more sustainable business.

An effective mission statement outlines your company’s focus on “doing.” It should capture your organization’s values and purpose and serve as a guiding light of why you do what you do. In other words, your mission statement should define your company’s five Ws: who, what, when, where, and why.

Here are two examples of companies with effective mission statements:

Eyewear brand Warby Parker’ s mission is “to offer designer eyewear at a revolutionary price, while leading the way for socially conscious businesses.”
Build the best product
Cause no unnecessary harm
Use business to protect nature
Do not be bound by convention

In each, it’s clear what the company’s values are and how they’re executing against them.

Quick Tip: Consider how your mission statement will grow as your company scales. A mission statement should help a business evolve with the market , not hinder internal capabilities to innovate and disrupt. For this reason, make sure your objectives can be extrapolated from your mission statement.

3. Craft Your Strategy

Once you’ve created a strong mission statement, you’re ready to realign your organization with a sustainable business strategy .

In crafting a sustainable business strategy, it’s important to ensure your company remains profitable. You can’t help your cause if you can’t stay in business. As proven, your sustainability efforts may help you become more profitable.

Consider the triple bottom line , which refers to how a company’s actions impact profit , people , and the planet . With this framework in mind, you can develop a sustainable business strategy that's also profitable.

Small changes can be the starting point for large-scale impact. For instance, does your company typically leave the electricity and heat on overnight, even when there are no employees on site? Imagine how much savings could be realized, in both cost and energy resources, if the last person in the office shut them off, or if you used a timer or motion sensor to automatically turn them off after the last person left.

What about the consumers willing to pay more for a sustainably produced product? A Unilever study found that 33 percent of consumers want to buy from brands “doing social or environmental good,” creating an opportunity in the market for sustainable goods.

Explore industry-specific strategies that can increase your operational efficiency while driving social and internal value. Putting in the work to build a robust sustainability strategy can help both your company and the environment in the long term.

Quick Tip: Need a starting point for crafting your strategy? Consider internal and external opportunities to create value around your mission. Ask your team questions like, “Will our customers pay more for our product if we produce it more sustainably?” or “Can an enhanced business process decrease our emissions?” If the answer to either of those questions is “yes,” you may have the beginnings of your strategy, while simultaneously increasing your productivity and profit.

4. Implement Strategy and Assess Results

It’s one thing to talk about a newfound motivation to do well and do good, but it’s another to take a public stance, pledge quantifiable results, and actually achieve them. With your mission and strategy solidified, you’re ready to make strides toward reaching your objectives.

As you’re implementing your strategy , remember to revisit your process periodically to assure your objectives, mission, and progress remain aligned.

Quick Tip: Unsure of where to start? Ask yourself if there are any areas where your mission can quickly have a great impact. Consider partnering with an organization that has a similar mission to yours. Aligning your missions can help drive progress fast. Partnering with an established player can also enhance your credibility.

Sustainable Business Strategy | Unite Profit and Purpose | Learn More

Sustainable Business for a Greater Impact

You’re now equipped with four simple steps—from purpose to performance—that can help you create a more sustainable business.

When objectives become a purpose, a powerful story is established. That story will drive your mission and allow you to create an actionable plan. Don’t worry if results don’t come immediately; the road to 100 percent sustainability is long and may require testing a few different approaches for you to make the greatest impact.

Are you interested in learning more about how to turn purpose into profit and create business models that drive change? Explore our online course Sustainable Business Strategy .

This post was updated on January 21, 2022 . It was originally published on October 10, 2018.

About the Author

Ir a navegación principal
Ir al contenido principal

Sustainability Plan: How it can be designed and implemented in your company

by APLANET , APLANET

May 12, 2023

In this article, we’ll investigate what a sustainability plan is, how it relates to the Sustainable Development Goals (SDGs) and how its implementation can help your company in a number of ways. We’ll also take a look at the benefits of adopting a sustainable approach to your business and we’ll give you a step-by-step guide to creating and implementing an effective sustainability plan in your organisation. So, accompany us on this sustainability journey and discover how a sustainability plan can boost your company’s long-term success and resilience.

What is a sustainability plan and why is it so important?

63% of Spanish workers believe that sustainability policies, such as the one we’re exploring here, are a determining factor. These are the results from a study recently published by Compromiso RSE (in Spanish), a specialist CSR website. As we can see, ESG criteria (i.e. environmental, social and corporate governance) are growing in importance.

Defining a sustainability plan

A sustainability plan is a guide that sets clear, measurable and realistic objectives to improve an organisation’s sustainability. In addition, it needs to work in harmony with the UN’s Sustainable Development Goals (SDGs), which are aimed to be achieved by 2030. Generally speaking, it should follow the European Union’s lead in reducing the company’s carbon footprint.

It is worth highlighting the fact that the EU stands out from other organisations of its kind in that it implements realistic and specific policies. What’s more, the plan needs to include all workers, directors, clients and investors linked to the business. By ensuring these key components are incorporated, companies all over the world will be able to effect real change.

Benefits of implementing a sustainability plan

The European Environment Agency has been urging us to adopt plans to combat this pressing issue since 2015. In fact, it declared that Europe is far from reaching its target of “living well, within the limits of our planet”. For this reason, it is now more important than ever that we fully understand the advantages of these kinds of guidelines:

Improved corporate image . Four out of every five large companies in Spain increased their sustainability investment in 2022, according to Deloitte (in Spanish). One of the main reasons for this was the need to show a commitment to the planet. The same study revealed that 74% of people are worried by the role that companies are playing.
Reduced operating costs . Sustainable policies have an overwhelmingly positive effect on the value chain in the medium and long term. This is mainly a result of optimising the use of resources and reducing waste. Increasing your company’s energy efficiency is a great way to ensure a promising future.

A step-by-step guide to creating a sustainability plan

Nowadays, every company can choose exactly how to adopt its own sustainability plan . However, it is worth noting that there are a number of regulations that must be observed, which contain some important aspects. Of these, the most important to consider are state regulations which are then transposed into law in EU member states, such as:

Spanish Law on Cooperation for Sustainable Development and Global Solidarity (2023). This forces companies and institutions to also focus efforts on combating hunger and creating healthy environmental conditions.
Spanish Sustainable Economy Law (2011). This called for businesses to join together in the fight against climate change. It marked an important milestone in this regard.

Step 1: Perform a materiality analysis

First of all, it’s vital that you know how to create a materiality analysis . This will help you infinitely when deciding on which actions should take priority and other relevant aspects. You will be able to optimise the investments your company makes in terms of time, as well as human and financial capital.

In order to prepare a materiality analysis, you’ll need to provide in-depth details of your corporation’s impact from an environmental, social and economic viewpoint each year. In other words, you’ll describe what your company is doing to bring about real change. Next, you’ll have to find out which resources are available to you and try to make them more sustainable.

Step 2: Identify sustainability goals and objectives

Your chosen goals must meet certain requirements so that they can be effective:

Specific and detailed . Do away with vague proposals and make firm commitments that are in line with societal demands. In particular, this refers to issues such as minimising your carbon footprint and cutting down on natural resource wastage.
Measurable . It’s crucial that you assess your progress by using relevant metrics. To do this, establish a series of indicators, as you’ll see in step four. Some of the more fitting ones include the percentage of GHG emissions reduction and carbon footprint offsetting.
Assessment and monitoring . Objectives must be subject to a critical evaluation during the planning stage. Once they have been implemented and you’ve started to work towards them, ask an independent body to come and check that they are actually being met.

Step 3: Drawing up strategies and actions for your sustainability plan

It goes without saying that any action you decide on must be focused on meeting the goals that you set in the previous step. This is the only way to bring about your desired changes and minimise obstacles and difficulties . As such, they need to form part of a detailed guide which all members of your team, and even society as a whole should be involved in creating.

Some strategies have a far-reaching influence that goes way beyond the sector itself. Give priority to these kinds:

Optimising energy efficiency (in line with the guidelines of the Institute for the Diversification and Saving of Energy [IDAE]).
Effectively and intelligently managing waste, whilst preventing the misuse and contamination of natural spaces.
Integrating an eco-friendly policy in the production chain, such as tourism sustainability plans .

Another cornerstone that offers many possibilities is collaboration between companies. In any case, it is worth broadening your scope and also working alongside bodies and NGOs that are dedicated to improving companies’ sustainability.

Step 4: Setting and monitoring key performance indicators (KPIs)

Some of the most common KPIs that you can include in your company’s sustainability plan are:

Renewable energy penetration . Make full use of the grants offered by public bodies such as IDAE. They tend to be focused on solar energy, whether photovoltaic, thermal or hybrid installations. The latter in particular is starting to show great promise and potential.
Energy efficiency in production . Industrial activity is one of the main causes of GHG emissions. Adopting measures that reduce electricity consumption is of utmost importance. To help achieve this, the most effective KPIs you can use are those that concentrate on company energy consumption.

One of the key ways in which APLANET can be of service is by helping you set indicators that are sure to contribute to reaching the goals you’ve set. This is a fully personalised service that is adapted to the needs of your company, and our real-time data management system will make sure you stay on the right track. This ensures that your investment is being used effectively.

Step 5: Communicating and participating with stakeholders

When adopting an environmental sustainability plan , it’s a good idea to identify your different stakeholders. This usually divides your company, the people that comprise it and the different organisations that interact with it into groups. The most effective plans are those that involve all parties affected:

Investors , who are responsible for providing the financial capital required to carry out the company’s sustainability plan .
Clients , who, as we mentioned earlier, are mostly willing to pay more. What matters to them more than anything else is that they are supporting an eco-friendly solution.
Shareholders , who may belong to other companies or entities focused on CSR. These provide invaluable help when searching for shared goals.

Step 6: Reviewing and continuously improving your sustainability plan

This final step never really comes to an end, as it just keeps going as a cycle. We recommend establishing a methodology for constantly reviewing, monitoring and developing your plan. Therefore, you’ll need two professionals to take care of this. One of them needs to be part of the company’s senior management, while the other should be an independent specialist.

Together, and with representatives for all stakeholders , they will embark on the review process. Following this, they will report back on the progress to those who have invested in the plan. The aim of this is to show exactly how their time and money have been used, as well as the milestones that have already been achieved and those that are still in progress.

This is when you’ll have to sit down and review each of your KPIs one by one in order to compare the degree to which each of them have been achieved and determine whether or not the company is heading in the right direction. If, on the other hand, it is deemed to be going in the opposite direction, there’s no need to worry: this step will allow you to detect the causes and further develop your sustainability plan .

Conclusions and recommendations for creating an effective sustainability plan

We are firm believers that this needs to be a three-pronged approach that tackles the economic, environmental and social scope of the company in order to provide a true reflection of its current situation. This also includes ensuring that the needs of its clients, investors and society as a whole are being met.

Get in touch with experts in this field to create a network of collaborators, both internal and external. This will give you a valuable and constant flow of ideas.
Report on your progress and challenges . Your company should provide frequent updates on its achievements and shortcomings. Don’t be afraid to ask for advice.
Use supporting software . One example is the program developed by APLANET, which allows you to manage all your information efficiently and give you complete control over traceability.

Create a sustainability plan that meets your company’s goals with the help of APLANET. With our software, you can collect data and manage your indicators and information all in one place, while also generating your own reports. Request a demo .

Subscribe to our resource hub to keep up to date with the latest trends in the sector

Other Blogs