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Home Entrepreneurship

Why You Need to Build Sustainability Into Your Business Strategy

September 23, 2022
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Opinions expressed by Entrepreneur contributors are their own.

Terms like “sustainability,” “ESG,” and “socially conscious” have become quite the corporate buzzwords. However, if you’re tempted to simply check the box, think again.

A sincere commitment to sustainability can pay off in a myriad of ways — not to mention preserves trust, because a lack of integrity where sustainability is concerned threatens your relationship with both employees and customers.

Here’s what I have learned from embedding this value deep into our business strategy.

Related: What You Can Learn From the Rise of Sustainability-Focused Entrepreneurship

Doing the right thing is good for business

The consciousness of sustainable practices and products has risen dramatically in the last few decades. Whether it be shifting generational expectations, the climate crisis, or other motivating factors, consumers value brands that prioritize sustainability. A quick look at the numbers: When given a choice, 32% of millennials will choose a sustainable option over a non-sustainable one, and 47% of companies said sustainability had an impact on their recruiting and retention. And investors understand it, too: 90% of investors said they pay attention to how sustainable a business is.

How to implement it:

  • Start somewhere. Whether it’s recycling and offering reusable water bottles in the office or setting up formal DEI (diversity, equity and inclusion) or ESG (environmental, social and corporate governance) committees, efforts small and large all make a difference. The intention of the contribution is what matters most. Don’t be daunted by the task at hand and keep focused on what is manageable and meaningful to you.
  • Keep it up. Sustainability is not a one-and-done initiative — it’s a muscle that needs constant exercise to establish itself as part of your strategy and operations. Like any other initiative, it should have goals and be analyzed at regular intervals to find places to refine and build upon your progress.
  • Think bigger. Once that muscle is strong, challenge it in creative ways to further your values. For example, we plant a tree for every new customer. It’s an easy way to do our part while leaning into what life really is about: caring for a future that extends beyond you.

Related: How to Turn Sustainability Into a Brand and Business Strength

Sustainability is a business mindset

The concept of sustainability goes far beyond the realm of ESG. It’s a method of growth and a mindset that can transform the way a company strategizes and performs.

The temptation to think short-term — how to meet this month’s target, how to put out fires with temporary Band-Aids — is all too great in startup culture. Adopting a sustainable mindset means evaluating the longer-term impact of short-term decision-making, as well as investing in future growth with no expectation of short-term returns. Ultimately, the two blend together: Yesterday’s investments become today’s harvest, as you continue to plan for tomorrow.

How to implement it:

  • Prove your foundation first. Insurance is a risk game. If you grow before you’ve gotten underwriting right, you’ll grow yourself out of business. We’ve spent years building, proving and refining our risk models to ensure a strong foundation for growth.
  • Maintain healthy unit economics. In this market, it’s no secret that most growth companies have embraced a focus on unit economics. But in Silicon Valley, the pendulum tends to swing back and forth between focusing on strong fundamentals and pushing growth at all costs. Adopting a sustainable mindset helps you stay centered and disciplined as you seek to build a truly disruptive, enduring business.
  • Reassess and refine your organization every +50 employees. Growth is important, but scaling properly keeps the mission on track and employees invested. It’s important to reassess the way your organization is run every +50 employees or so, to ensure processes and teams are structured to maximize effective collaboration and decision making.

Related: Are Your Company’s Sustainability Efforts Failing? Here’s What May Be Blocking Your Success.

Sustainability belongs in your mission statement

Everything flows from a company’s mission. Therefore, if you make sustainability a part of your mission, you’ll have automatically embedded its virtues into your DNA.

My advice is therefore to take a genuine look at your mission, and understand how sustainability naturally fits in. I’d go further and say that anyone running a company in this century has a responsibility to do so. Climate change is not a future problem; it’s here, now. According to NASA, the effects of climate change such as rising sea levels, intense heat waves and catastrophic weather events are becoming more and more prevalent.

If your industry’s connection to sustainability feels more indirect, ask yourself how to tie it into your company values and product offerings in a really authentic way. Successful examples are plentiful, ranging from outdoor gear — with Patagonia’s 1% for the Planet pledge and the CEO’s recent decision to give away the company to fight climate change — to makeup, like Thrive Causemetics’ commitment to cruelty-free ingredients.

Ultimately, this is an exercise in defining and living your values — and doing good along the way.

Read the full article here

Tags: Business Modelbusiness solutionsBusiness StrategyClimate ChangeGrowing a BusinessGrowth StrategiesMaking a changeStewards of Sustainable ProgressSustainability

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