This is an original article written by Dennis Tan.
Incorporating sustainability into business operation frameworks seems to be trending right now. With governments, banks, and people embracing a more sustainable post-Covid era, many businesses are also starting to realise the numerous benefits that can be reaped from embracing sustainability in their business models, practices and programmes.
But what makes a business sustainable? With the increasingly widespread problem of greenwashing – the act of deceitfully making a product or business seems more sustainable than it really is – this question is an important one to answer to build the trust of consumers and stakeholders. According to Lia Colabello, managing principal of Plastic Pollution Solutions, truly sustainable businesses have business models that make sustainability a priority – one that “considers all stakeholders, assesses and addresses environmental impacts, and is transparent and thorough in its [sustainability] reporting.”
Becoming a sustainable business
How can businesses that truly want to become more sustainable fulfil the criteria listed above? The first step is to set in place a framework for sustainability reporting that is audited by a third party. Sustainability reporting is an overview of a company’s environmental, social, governance and economic impacts that are a result of its operations. It helps companies to understand what their impacts are and how they can improve, enabling them to set more ambitious sustainability goals.
Such reporting also signifies companies’ commitment to a sustainable global economy, and protects their relevance as the global economy transitions towards becoming more sustainable. Being audited by a third party also shows that the companies are transparent and trustworthy.
Sustainability also covers a broad range of aspects pertaining to businesses. Besides environmental sustainability, it is also important for companies to consider social and economic sustainability as well. While environmental sustainability deals with issues such as waste and resource management or businesses’ contributions towards the Sustainable Development Goals (SDGs), social sustainability involves the business’ engagement with local communities and the inclusiveness of its workforce. This doesn’t necessarily come with financial downsides. Especially in the long term, improving the sustainability of one’s business can also help to guard against environmental and social risks which are becoming increasingly relevant.
The cost of climate-related disasters is exponentially increasing – with it, so are climate risks for businesses. (Source: Forbes)
The role of awards in Business Sustainability
Obtaining recognition for sustainability efforts are also important in showcasing a business’ commitment to being sustainable. Credible accolades, like the Sustainable Business Awards (SBA), allow businesses to demonstrate their credibility through an external, independent validation process and recognition in multiple areas of sustainability.
Businesses are evaluated on – and hence given recognition for – their holistic performance. For instance, the SBA evaluates businesses across 12 criteria – ranging from strategy and sustainability management to their efforts in addressing climate change. This gives sustainable companies recognition across a broad audience of potential partners, investors, employees and customers worldwide. Such recognition can help enhance a company’s brand and competitiveness in their industry, creating invaluable opportunities for differentiation and investment.
12 Criteria of the Sustainable Business Awards. Photo by Global Initiatives
It’s not all about the fame, though. Besides third-party audits, awards and certifications also serve as endorsements of a business’ sustainability efforts especially if the selection process is conducted by experts in the field. This helps to boost businesses’ credibility when it comes to sustainability, removing any doubts about greenwashing.
Award ceremonies also provide businesses with a platform to share and learn from the best practices across the industry. They are valuable networking opportunities, allowing companies that want to improve their sustainability efforts to learn from industry leaders. By exchanging best practices, businesses not only benefit by understanding how to improve their sustainable business model, but the industry also progresses as a whole as better innovations are shared.
Award Ceremony for the Sustainable Business Awards Malaysia 2019. Photo by Global Initiatives.
Not all awards are equal
Of course, it goes without saying that companies also need to consider the quality of awards to participate in. The awards’ assessments should be transparent and associated with organisations that have long-standing credibility in the sustainability arena. Otherwise, companies could be opening themselves up to claims of greenwashing or come under fire for dubious certifications. Take the backlash that the Michelin guide faced over its Sustainability Emblem and Awards last year – without a transparent, clear methodology or the backing of sustainability experts, it lost its lustre, even being labelled as an “empty award”.
It is difficult for a single award or certification to robustly assess the multifaceted nature of sustainability across businesses’ supply chains. Therefore, it is important to select awards that understand this complexity and provide assessments that go beyond a superficial level to analyse multiple aspects of a business’ sustainability practices.
At their core, credible awards and certifications are a measure of a company’s sustainability efforts. Certification ultimately provides recognition of a company’s sustainability efforts and improves its reputation in a global arena that is moving towards a more sustainable future.