August 17th, 2010
By Jennifer Maule, Arizona State University A.S.U. School of Business, Intern for E.C.A.

In the hard economic times that businesses and individuals are facing, companies that are transparent and trustworthy are the ones that will succeed. From corporations to small businesses, having a loyal consumer base is a fundamental necessity for growth and success. Integrating sustainability into a business model can bring the transparency and trustworthiness needed to foster a loyal consumer base, while staying ahead of competitors and the Great Recession.

Sustainable development is a rising market force that is bringing a competitive advantage to businesses that have adopted and maintained a sustainability initiative. Creating and adopting such a view can open up new markets and improve a company’s reputation. In the volatile economy we live in, reputation is a key factor in a business’s growth and prosperity. Consumers and investors want to be affiliated with businesses that are not only reputable, but also conscientious of the impacts their practices have on the social and environmental realms of life. Creating a sustainable business model can not only enhance a business’s reputation with its stakeholders, it can also bring added value to the business that was not seen before. The added value can be measured in the reduction of costs, productivity improvements, risk reduction, and human resource gains. All of which are extremely important for either the bottom line figures or the overall satisfaction of the business’s employees and stakeholders.

The success of a sustainable business model lies within five key steps:

1. Setting the Sustainability Vision

The vision should primarily focus on the intersection between new market opportunities and the strengths within the business. Focusing on the intersection can provide insight to where the competitive advantage lies and where expertise within the business can be applied.

2. Staffing the Effort

A team formed from every division of the business must be assembled to create and implement new policies that coincide with the vision. Once policies are made and a sustainable plan is drafted, embedding and implementing the policies throughout the business chain is vital. The team must monitor the compliance with the new policies, as well as report any problem areas.

3. Creating Measurable Goals

Goals to reduce the adverse environmental impacts of business practices are extremely important in a sustainable business model. The goals that are made to uphold the vision must be easily measurable and monitored so that true progress in the reduction of the adverse impacts can be seen. Setting goals and striving to achieve them is a very positive factor that can create a good reputation for a business.

4. Implementing Strategies

Once the larger vision is established and measures are taken to achieve goals, specific initiatives relevant to each business’s competitive situation and internal strengths should be made. An initiative that all businesses can take up is the greening of facilities and the supply chain. Taking on such a project can show stakeholders that the sustainable vision is very important to the business.

5. Communication of Results

Making a sustainable report includes the practice of measuring and disclosing all data for organizational performance towards the set goals of the initiative. Reporting these facts makes the business accountable to internal and external stakeholders for the actions it has or has not taken towards meeting the set goals.

Creating a sustainability initiative within a business model provides the necessary infrastructure to evaluate inefficiencies in three areas: economic, social, and environment. These areas of evaluation create a more comprehensive understanding of a business’s interactions with the world around it; an essential understanding that can help deliver lasting growth. Sustainability is the future and in order to be a part of that future, businesses must adopt a sustainable vision.