What Is Corporate Sustainability and How to Achieve It

‍Corporate sustainability is a business approach that creates added value for stakeholders focusing on various factors to improve quality of life outside of their products and services including ethical labor and sourcing, eco-friendly practices, and cultural and economic welfare. 

The three pillars of corporate sustainability are: 

1. Economic
2. Environmental 
3. Social 

This idea is commonly referred to as Environmental Social Governance (ESG), however, ESG requires a specific set of criteria to achieve it.

If you are interested in becoming sustainable in your corporation, then this article is for you. We'll give you some broad examples of corporate sustainability that you can begin with and personalize with your team. 

How to achieve corporate sustainability

Some aspects to consider working on in each of the pillars are:

1. Economic

• Maintain transparent accounting practices and honest compliance.
• Socially responsible investing.
• Risk assessment in regards to all three pillars having importance.
• Not putting profit at the forefront of the other two pillars.

2. Environmental

• Natural resource extraction and use of virgin materials.
• Carbon neutrality.
• Regenerative agriculture.
• Waste and the total life cycle of products.

3. Social 

• Explicit contract theory where there are signed, written agreements between individuals and entities regarding behavior, land use, labor, payment, culture, etc.
• Social justice theory ensures that the distribution of products and services are not taken advantage of in society between social classes and that there is justice served.
• Human rights and property rights and that the latter doesn't override the former.
• Deontological theory is based on the ethics of just hearing what problems there are and considering and acting upon their well-being.

Corporate sustainability vs. corporate social responsibility

Corporate social responsibility (CSR) is proactive. These are practices done in advance to better social and environmental causes. Corporate sustainability also involves community and economy and is sometimes not planned in advance but as a reaction to something they can improve.

CSR emphasizes a business' ethical responsibilities. However, this can be subjunctive depending on the society, stakeholders' expectations, time in history, or the organization.

Corporate sustainability highlights science-based principles for entities to take action.

Both corporate sustainability and CSR should be parts of a long-term strategy although it can be flexible as better ways of doing business can be discovered over time and then implemented.

Related content

To learn more about regulations and reporting, read another article from our free library:

• Article: GHG Reporting: Everything You Need to Know
• Article: What Are Scope 1, 2, and 3 Emissions?
• Article: COP26: How It Will Affect Businesses

Why is corporate sustainability important?

Stakeholders demand sustainability. More GenZs and Millennials consider carbon neutrality than other generations when making purchases because global warming will affect their futures more. In addition, most investors won't consider backing companies anymore that aren't making action plans towards the green economy because they won't stay competitive or be aligned with upcoming laws.

The US Securities and Exchange Commission (SEC) has recently proposed a rule that requires registered companies to report on their emissions if seeking investments so that investors are given transparent data regarding scope 1, 2, and 3 emissions. Some of the criteria are quoted here:

"The proposed rules also would require a registrant to disclose information about its direct greenhouse gas (GHG) emissions (Scope 1) and indirect emissions from purchased electricity or other forms of energy (Scope 2). In addition, a registrant would be required to disclose GHG emissions from upstream and downstream activities in its value chain (Scope 3), if material or if the registrant has set a GHG emissions target or goal that includes Scope 3 emissions. These proposals for GHG emissions disclosures would provide investors with decision-useful information to assess a registrant’s exposure to, and management of, climate-related risks, and in particular transition risks. The proposed rules would provide a safe harbor for liability from Scope 3 emissions disclosure and an exemption from the Scope 3 emissions disclosure requirement for smaller reporting companies. The proposed disclosures are similar to those that many companies already provide based on broadly accepted disclosure frameworks, such as the Task Force on Climate-Related Financial Disclosures and the Greenhouse Gas Protocol."

Transparent companies with reporting tools that can verify what they are doing for the environment, and take action on the other UN Sustainable Development Goals, are more trusted amongst stakeholders than companies that don't go beyond their profitable function.

In the 2022 Global Green Skills Report, released by LinkedIn, green talent was rising and so was the demand for green jobs being fulfilled. If businesses want to attract the best talent and keep employees, then putting corporate sustainability at the core of your business is necessary. 

How do you develop a corporate sustainability plan?

Organizations can begin by looking at sourcing. Where are the resources coming from and how can products be used best in their life cycle? Are they supporting a circular supply chain vs. a linear supply chain? Engaging with various communities and vendors is a key factor in running a sustainable business.

Fair labor conditions and a healthy company culture help employees and management thrive and it is obvious to stakeholders when employee retention is better and stronger talent is attracted to a business.

Going carbon neutral is now expected and being able to report in real-time that you are compliant with the GHGP will benefit you. That is why emissions management software is necessary. Companies can calculate and track tCO2e in minutes. Since Net0 offers 140+ carbon offset projects that are verified, you can choose a diverse range of projects that change lives in different aspects so we can have a better quality of life on a healthier planet. We also host certificates and badges you can place on premises, websites, social media, and projects, to communicate that you are carbon neutral certified and you can back it up with valuable data and honest reporting. Implementing a carbon-neutral strategy will be easier with Net0's predictive analytical simulation tool that provides reduction insights about your future goals.

The impact of sustainability

Besides the environmental benefits, your company will gain a sustainable rapport, you will have reduced business costs, and your strategies will have shifted in a more innovative direction. This will attract vendors and talent to you that have the same goals. You will also have reduced the amount of energy and waste in the process of making your products. 

Examples of corporate sustainability

• Vestas Wind Systems A/S was named the most sustainable company in the world in 2022 in the Global Knights Corporate 100 ranking, an assessment of 6914 companies with more than 1 billion US revenue. They are the most socially responsible company in wind energy, they aim for carbon neutrality by 2030 without offsets, and they have a goal to produce waste-free wind turbines by 2040.

• GM - GM is investing in all-electric, zero-emissions vehicles by 2050. They have committed to all renewable energy by 2050 as well. In 2020 their reports stated a 23% decrease in energy use, 35% reduction in absolute emissions, 31% reduction in waste intensity, and 87% increase in wild habitat acreage. 

• Microsoft - Microsoft is carbon negative, water positive, zero waste, and empowers customers in the scope 3 value chain to report their emissions.

To conclude

Corporate sustainability is going beyond your normal business functions to improve the environmental, social, and economic ecosystem in the community, highlighting science-based principles. Using technology, it is easier to scale your carbon neutrality measures to analyze and create plans to achieve net zero.

After reviewing some of the ways your corporation can become sustainable, you can start planning your own strategy. Book a demo with Net0 so you can experience how to calculate and manage your carbon emissions all in one place. We make it easy for you to become carbon neutral.

Cover photo by Loïc Manegarium from Pexels