Against the backdrop of turbulence in 2020 from the coronavirus (COVID-19) pandemic, social and political unrest, and economic downturn, one field emerged stronger than before: sustainability.
According to S&P Global and GreenBiz Group’s State of Green Business 2021 report, more organizational leaders are taking action as the need for sustainable business practices becomes increasingly urgent.
This year, 64 percent of major global companies publicly disclosed their carbon targets, up seven percent. In addition, 90 percent of US companies published a sustainability report in 2019—up from 20 percent in 2011—and, for the first time ever, major global and US companies reported year-over-year declines in water use. The business world is mobilizing around sustainability—but not without reason.
The report also highlights that, despite great progress in the last year, major global companies are on track to fall 72 percent short of the emissions reductions necessary to achieve the Paris Agreement. Carbon pricing costs are predicted to reach 13 percent of a business’s total earnings by 2025, and, perhaps most sobering, nearly 95 percent of major US companies are predicted to face moderate physical risk due to climate change by 2050.
The time to get involved in business sustainability has never been more pressing. With so many businesses prioritizing sustainability in hopes of a brighter future, the time has also never been more convenient. If you’re starting from square one, embarking on sustainability can be a challenge. Here’s a primer on what sustainability means in business, key areas of foundational knowledge to explore, and five skills you should build to meaningfully contribute to sustainability practices in your organization.
What Is Sustainability in Business?
Business sustainability refers to an organization’s impact on the environment and its local and global society. In other words, a sustainable company seeks to improve—or at least not worsen—the environment or the rights, health, and happiness of the people in its community.
To keep these goals at the forefront of strategic planning, many sustainable organizations opt to track progress using the triple bottom line instead of the classic bottom line.
The triple bottom line is also referred to as the “Three Ps": people, planet, and profit. By keeping these three factors in mind, a business can measure how well it’s doing in its sustainability efforts and ensure they don’t get overshadowed by profit.
Let there be no mistake: Sustainability offers ample opportunity for profit. Once thought of as separate goals, many businesses now find that employing sustainable practices saves them money in the long run and attracts new, sustainably-minded customers interested in supporting companies that contribute to environmental and social good.
“You don’t have to leave your values at the door when you come to work,” says Harvard Business School Professor Rebecca Henderson in the online course Sustainable Business Strategy. “Solving the big problems opens up opportunities that can enable you to have a successful and rewarding business career, while also helping to build a just and sustainable world.”
To get involved, you need to establish some foundational knowledge and develop five key skills.
Related: 5 Examples of Successful Sustainability Initiatives
Foundational Knowledge for Business Sustainability
Before you can implement sustainable practices at your organization, ensure you have a basic understanding of environmental science and climate change. You should also know the social issues most prevalent in your industry and community and the systemic nature of both.
The next step is to learn how your business is impacting each of those areas. For instance, what’s your organization’s carbon emission level? Does your entire supply chain support fair labor rights? What does your business contribute to the communities it resides in? This part of the process may take a while and require a formal sustainability audit.
Although different for every company, some factors to consider when conducting a sustainability audit include:
- Current employees’ happiness, rights, representation, and quality of life
- Waste produced annually
- Carbon emission levels
- Toxins used in the manufacturing process
- Volunteerism and civic engagement
- Waste and toxins created in the product life cycle
- Required infrastructure to support sustainable practices
Finally, reflect on what drives you to implement sustainability practices in your organization. With a clear “why” behind your purpose, you can lead a team with both logic and passion.
“Adopting a purpose will not hurt your performance if you do it authentically and well,” Henderson said in a previous Facebook Live event. “If you’re able to link your purpose to the strategic vision of the company in a way that really gets people aligned and facing in the right direction, then you have the possibility of outperforming your competitors.”
Sustainability Skills for Business Professionals
To make an impact in the world of sustainable business, you should develop or strengthen several skills.
1. Strong Leadership
Especially if your organization isn’t currently engaged in sustainability efforts, you need strong leadership skills to enter the field.
These include knowing how to delegate tasks and empower others to take them on, maintaining team resilience when circumstances change, communicating organizational change effectively, and remaining authentic and in tune with your team.
Strong leaders are sometimes required to make difficult decisions based only on available information and current circumstances, and the field of sustainability is no exception. As the climate crisis heats up, you need the skills to think quickly, take all perspectives into account, and make decisions with the community and environment’s best interests in mind.
2. Innovative Thinking
Reimagining a sustainable path forward for your business requires out-of-the-box thinking. It can be easy to get stuck in the ways your company has always done things, but pivoting to sustainable practices requires innovative ideas and a willingness to try them.
To cultivate innovation within your organization, try holding brainstorming sessions in which every idea is written down without judgment. A supportive culture around idea-sharing enables people to feel comfortable expressing less mainstream thoughts, which may help your company move forward into sustainability.
Related: 23 Resources for Mobilizing Innovation in Your Organization
3. Calculate and Pitch Potential Value
Once potential project ideas have emerged, you need to prove their value to stakeholders and decision-makers.
One way to do so is by calculating the anticipated return on investment (ROI) using this formula:
ROI = (Net Profit / Cost of Investment) x 100
If the ROI calculation yields a positive percentage, the project is financially worth pursuing. If it yields a negative percentage, the project isn’t predicted to bring in more money than it costs to deploy. If the ROI is equal to zero, it means the project is expected to draw in as much money as it costs, and it’s up to you to decide if it’s worth the effort.
Consider what the ROI will be for projects that impact the environment and society, and use that information to make the case that sustainability can be a wise, profitable decision.
In addition to calculating ROI, pitching your case to stakeholders in a clear, compelling way is an important skill to have. Consider creating a slide deck with key points, practicing in advance, and providing concrete examples of the value sustainability can bring to your firm.
Related: Making the Business Case for Sustainability
4. Basic Data Skills
Other important skills to have before diving into sustainability include collecting, analyzing, and reporting on data.
Being able to track and analyze the results of sustainability efforts over time—along with their effect on various parts of your business—can enable you to prove their impact and communicate it through data visualization.
This information can influence business strategy moving forward. For instance, if your initiative to decrease carbon emissions isn’t producing results as quickly as anticipated, perhaps your team will decide to pivot to a new method to see if the rate of change increases.
Related: Data Literacy: An Introduction for Business
5. Effective Communication of Purpose
A strong sense of purpose is essential for committing to sustainability work—but it’s not a skill that can be taught. In a business setting, your sense of purpose is only as effective as your ability to communicate it to others. Effective communication skills can be strengthened through preparation and practice.
Return to your “why.” Consider the perspectives of your team members or stakeholders in your organization. What do they need to hear to understand why sustainability is important to you and is a worthwhile investment for the organization? How will you encourage them to gain a sense of purpose around sustainability?
Consider using communication tactics, such as:
- Storytelling: Tell people a true story that illustrates your point.
- Self-disclosure: Describe your “aha” moment. When did you first begin to care about sustainability in business?
- Statistics: Share statistics that communicate the urgency and timeliness of sustainability.
- Data visualization: Present compelling data trends in a clear, visually appealing way.
- Personal reflection questions: Ask people questions that spark reflection on their connection to a sustainable future. For instance, “How do you want to contribute to the world your children will inherit?” or “What role do you want to play in redefining the future of our industry?”
Building Your Sustainability Skill Set
The skills needed to succeed in business sustainability can serve you well in your efforts to lead any business initiative. Because sustainability is such a large-scale undertaking, the ability to lead with purpose, communicate and prove value, analyze and use data, and maintain a big-picture mindset can take you far.
To get started, practice these skills in your daily work. Reflect on the purpose of a project and communicate it to a peer. Calculate the anticipated ROI of a potential project and leverage basic data skills with any dataset you have access to.
If you’re ready for a more formal learning experience, consider taking an online course, such as Sustainable Business Strategy, in which you’ll learn from HBS faculty and real business leaders about their sustainable business experiences.
Are you interested in learning how your organization can do well while doing good? Explore our three-week course Sustainable Business Strategy and our other Business in Society courses.
