How can corporate interests also be sustainable?
‘Sustainability’ is a word we hear a lot from corporations nowadays. But are they just paying lip service to the latest eco buzzword, or is it a concept that can genuinely be incorporated into business practice while maintaining economic success?
Extending product life and products as service
66% of global consumers and 73% of millenials are willing to pay more for sustainable brands. Rather than making money with inbuilt obsolescence, there is a clear path for corporations to build a reputation for sustainability via durable and repairable goods. This is the crucial first step in supporting circular economies, which aim to step away from disposable consumption.
Circular economies aim to include the true cost of resource use within their models. One way to recognise this is by selling products as services: encouraging efficiency by closing the loop between production and use value. For example, rather than buying light bulbs and power separately, the company Philips now offers light as a service. In circular economies, the company’s profits therefore depend on the efficiency of the product, with recycling incentivised.
Inform, equip, nudge: empowering people towards sustainability
Actions speak louder than words. As such, corporations must encourage sustainability in both employees and customers as an integral part of their business culture, rather than as a weak afterthought. Sustainability should be an explicit goal of the company with clear policies and guidance as to how it can be achieved. A dedicated person or team should be assigned to advocating, achieving and reporting of these goals with sufficient resources to do so. Transparency is also paramount; in order to be held to account, corporations must make their practices and products visible.
Nudges are better than shoves. Companies should introduce approachable policies gradually to ensure employees or customers are on board, and should be open to their input too. Small changes can make huge differences. This can be seen in the introduction of the 5p plastic bag charge, which led to an 85% reduction of disposable plastic bag use in England in the first six months. Arguably it is not simply the loss aversion to losing 5p, but the fact the policy questions the normalised use of disposable plastic bags.
Making informed and innovative decisions for sustainability and profit
Instead of basing decision-making for spending on short-term costs, information about longer-term savings and benefits should be incorporated. For example, sticking with traditional energy supply leaves companies exposed to the risks of ever-changing energy markets. Putting a self-sustaining solar supply in place eliminates these risks, reduces energy costs in the long term, and reduces environmental impact. Organisations like IKEA are leading the way by producing 73% of the energy they use via wind turbines and solar panels, with an aim to be energy independent by 2020.
The fact we are surprised by how sustainability and corporate interest can align says a lot about the normalisation of our disposable culture. Locating opportunities for efficiencies makes mutual sense and opens up avenues for corporations to become more autonomous in the process.