2020 was a difficult time for startups. The global and ongoing pandemic made us realise on an individual and corporate level, that sustainability must be on our agenda. As there is clear evidence that climate change will have a more detrimental impact than COVID-19, it is time for us to take meaningful action and rethink our purposes. 2021 is the year where startups can achieve sustainability objectives, exponential growth, while respecting the environment and human capital. What if 2021 was the year for startups to take the corporate sustainability lead in 2021?
What is corporate sustainability?
For the past decade, corporate sustainability has been a buzzword mainly used by corporate giants such as McDonald’s and Walmart. Even though it raises eyebrows when someone talks about sustainability and fast-food chains, many world-famous companies have made sustainability their priority. Now, small businesses and startups are under pressure to report their sustainable initiatives and demonstrate how they will execute on them. The following brings the question of what corporate sustainability means.
Corporate sustainability is an organisational approach aiming to create a long-term stakeholder value, through the implementation of a business strategy focusing on environmental, social, cultural, ethical and economic dimensions. It can be characterised by behaviours promoting the responsible use of natural resources, contribution to financial wealth and creation of social value. It holistically integrates sustainability into the core of your business.
Corporate sustainability has three pillars: economic, social and environmental, commonly referred to as “profit, people and planet”. Contrary to what we may think, the “economic” dimension is more about corporate risk-management than profit at any cost. It is the balance between ethics and profit: making sustainable decisions at a stable financial flow. The “social” pillar is about your employees, stakeholders and anyone involved in the supply chain (e.g. fair wages, empowering work conditions, respectful of the community). The implementation of social sustainability strategies improves employees’ motivation and productivity. Finally, the “environmental” dimension is all about the respect and preservation of the planet. By continually reviewing processing by seeking sustainable alternatives, companies become more innovative. It is essential to start assessing your environmental impact by measuring and reducing your carbon emissions.
Now, you may wonder, how does corporate sustainability work in the startup world? Startups are transforming the way we operate “business as usual”. They continually change what is possible, bringing to the table new opportunities, disrupting norms and trends. Startups have the power to strengthen corporate sustainability in our world, shifting corporate’s vision on business strategies. Startups with a robust purpose and vision will be the winners here. Also, in a Deloitte survey, 85% of millennials stated that companies should be measured on more than their financial performance. Then, with corporate sustainability, startups can pave the way for a sustainable future.
Why is corporate sustainability important for startups?
Credit: Plan A
It is time for leaders and companies to move from the short-term vision of “generating fast profit at any cost”, to an inclusive and long-term approach. Corporate sustainability is vital for businesses to thrive and remain innovative. Based on the business case for sustainability published in the Harvard Business Review, corporate sustainability is driving competitive advantage through stakeholder engagement, improving risk management, while improving and fostering innovation. It also improves financial performance, building consumer loyalty. Also, corporate sustainability attracts, retains and engages employees.
Corporate sustainability is also essential for startups to be ahead of the regulatory framework curve. For example, the European Union recovery fund proposal, post-COVID-19 includes a new initiative in 2021 on sustainable corporate governance to “ensure environmental and social interests are fully embedded into business strategies.” Civil society says this must include robust due diligence obligations for European companies to respect human rights and the environment.
How to achieve corporate sustainability for startups in 2021?
Big players in various industries have already settled their sustainability target following the 2030 agenda on sustainable development (e.g. Patagonia, Timberland). It is time for startups to take corporate sustainability in their own hands and be ahead of their competitors. Startups must embed sustainability within their business strategies, as it is not just a competitive advantage or extension of CSR activities.
You don’t have to rethink your entire business model of my company sounds daunting”. Do not panic. As Alan Watts, founder of the American counter-culture would say, sustainability is a long-term approach that will unleash tremendous positive outcomes. We are not asking you to transform your business overnight; you can implement changes gradually.
Start by changing the way your company envisions sustainability – from carbon emissions reduction to financial growth. Then, set up your objectives according to the UN sustainable development goals. Once you come up with a clear vision and decide to implement the sustainability strategy, leadership, and business goals must be shared throughout departments of the company (e.g. IT, marketing, operations, manufacturing). If there is not enough expertise or scientists in your board, no problem, collaborate with other startups, or NGO’s that can help you in setting up targets and goals (e.g. carbon emissions, reduction waste).
Also, startup leaders need to commit to a sustainable and long-term vision, instead of succumbing to the pressure of short-term goals. To achieve corporate sustainability, it is essential to use practical sustainability measurement and reporting tools. For example, Plan A’s carbon manager software combines science and data points to measure and reduce your company’s carbon emissions. Then, it is essential to report about your environmental impact and sharing with people who care. Sustainability reports are long to make, but with the right tools, it makes it more accessible. Also, take into consideration the development of an inclusive green culture inside your company (e.g. work environment, recycling project, employees commitment).
How to become successful startups with robust corporate sustainability?
Startups that are built to last must pace themselves to align with societal and environmental interests. Corporate sustainability is a marathon, not a sprint. Plan A, a Berlin-based startup, has developed a software to help companies monitor, reduce and offset their carbon emissions.
Credit: Plan A
To set up your corporate sustainability, start making that business case to grab the attention of the executive suite. Then, find other departments to collaborate with and share the challenges and rewards. Also, if you are not yet reporting, committing to rigorous data collection for sustainability. Share metrics in-house with leaders, corporate development and strategic planning departments. Before beginning a corporate sustainability study, consider the dedication and resources needed to generate a high-quality report, including reliable data and metrics. Look at what the competition is up to or ask your customers directly which sustainability metrics are important to them.
Credit: Plan A
Make 2021 count by checking out Plan A’s website to sign up for their exclusive offer. Start the new year with a focus on corporate sustainability in your startup, by measuring and reducing your company’s carbon emissions.