Why sustainability is not just for large companies?

Why sustainability is not just for large companies

Not long ago I participated in a conversation where, with great frankness, a communications executive admitted that she felt “investing in sustainability” was only relevant for large companies with big financial resources. “I’m pragmatic,” she said, “many companies have more urgent priorities to focus on, such as increasing sales and short‑term profitability.”

However, true sustainable management ensures that a company has better chances of lasting over time—which is a concern for all companies, regardless of size.

Managing a company with transparency, aligned to a purpose and with a vision of triple impact (financial, social and environmental) involves elements and drivers that are absolutely critical for every business.

Six reasons to include sustainability in business management

Global trends and statistics show that:

  1. Responsible business management is what EVERYONE expects from companies: customers, but also investors, talent and the community. The Edelman Trust Barometer 2022 revealed that approximately 80 % of the general population expect CEOs to be vocal and visible when discussing the important social and environmental issues that affect the world, and also expect to know what the organisation is doing to positively impact society in areas such as diversity and inclusion, Indigenous rights, personal privacy and climate‐related issues.
  2. Doing things well brings strategic advantages: Government regulation on sustainability is increasing globally and investors perceive companies that do not actively show transparency or social and environmental responsibility as high‑risk investments. Companies with sustainable practices that comply with or get ahead of regulations are more attractive to investors and to talent in the market, as well as being able to avoid costly sanctions and reputational damage.
  3. Being sustainable helps you prepare to face risks: Every business action scenario carries opportunities and risks; when ESG criteria (environmental, social and governance) are incorporated into business management to be sustainable, mapping and assessing the operational risks and their possible impacts on the company and each stakeholder is essential. The best way to manage them is to maintain a holistic business perspective.
  4. It builds relationships with stakeholders: An organization that includes the sustainability strategy in a transversal manner connects with different stakeholders in strategic dialogue that builds trust relationships which will be of value when managing any crisis.
  5. Sustainable management achieves efficiencies: Sustainable practices improve efficiency and reduce production costs. For example, adopting more efficient technologies can reduce energy consumption, resource use and input/material costs.
  6. Sustainability can promote innovation: The need to find sustainable solutions can drive companies to develop new products and technologies that are more environmentally respectful and increasingly socially responsible.

I invite you not to underestimate the benefits of ESG for smaller companies. In fact, a less complex organisational structure may even make it easier to implement sustainable practices—and to innovate and find sustainable solutions at lower cost.

How to start the route toward sustainable management in organisations?

The first step is understanding that sustainable management goes beyond a standalone environmental initiative such as waste management, investing in renewable energy, or improving energy efficiency. It also goes beyond social or philanthropic actions like volunteering or donations.

Incorporating ESG (Environmental, Social, and Governance) criteria into business management to achieve sustainability requires developing a strategy and implementing it across the organization systematically and from all fronts.

One possible starting point is conducting an ESG action inventory. Every time we support companies in this process, they are usually surprised by how much they’re already doing—only it hasn’t yet been integrated into a coherent strategy aligned with the business. This inventory also helps to gradually socialize the topic of sustainability across all departments.

It’s very important to:

  1. Involve and raise awareness among senior leadership about the process of incorporating ESG criteria into the organization and its business.
  2. Map and assess material issues: this is the process through which the company identifies all environmental, social, and governance (ESG) aspects that have a substantial, positive or negative, impact on its profitability and stakeholders.
  3. Establish specific, measurable ESG-related objectives aligned with business goals.
  4. Engage with stakeholders: open dialogue and interaction help companies better understand their stakeholders’ needs and concerns. This in turn enables companies to identify areas where they can have a positive impact and build stronger trust-based relationships.
  5. Share information and communicate your efforts, challenges, and progress with your most important audiences.
  6. Collaborate: Positive impact can grow exponentially through strategic partnerships and collaboration—not just with other companies, but also with government entities and NGOs. This allows all parties to row in the same direction and drive meaningful change.

While each approach may differ, companies around the world—of all sizes—are moving to integrate ESG criteria into their business practices. In doing so, they’re building stronger, more sustainable businesses that are better prepared to face future challenges.

At KOMUNIKA Latam, we can help you develop and/or implement sustainable practices that make sense for your company, its size, and business strategy—no matter where you are on your sustainability journey. Get in touch!

Ana Vásquez
Consultora Senior 
avasquez@komunikalatam.com
Linkedin: Ana Vásquez

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