Every business owner strives to operate sustainably. With ideas like sustainability becoming the status quo for businesses, developing sustainability strategies is taking on a new level of importance. However, what exactly does that mean and how is sustainability within a company identified?
In business, sustainability is defined as the emphasis on meeting the needs of a company without reducing the ability of future generations to meet their own needs. It’s often tied to environmental impact reduction, responsible financial practices, and a commitment to the wellbeing of the community in which the business operates.
To adequately gain a sense of whether a company is truly sustainable, it’s necessary to look at all three of these elements. Read on to learn about the three types of sustainability, the types of sustainable competitive advantages, and what companies can do to determine their level of sustainability.
The Three Types of Sustainability
A business can pursue sustainability in many different ways. In general, business analysts recognize three types of sustainability, and a company may reflect one or all of them. They are:
1. Corporate
Corporate sustainability has gained traction in most industries over the past decade. In this type of sustainability, companies create value for stakeholders (such as customers, investors, the community, or others) by developing strategies for long-term equity. Such strategies may encompass ethical, cultural, environmental, or social initiatives, but they generally emphasize thinking ahead and an emphasis on the needs or demands of stakeholders. More specifically, corporate sustainability is demonstrated through (but not limited to) commitments to:
- Transparency, and the accurate – and timely – disclosure of information
- Community involvement and the recognition that businesses are members of the community, not there solely to earn a profit
- Recognizing the long-term impacts of doing business and adjusting practices accordingly
- Authenticity in word and action
2. Environmental
Environmental sustainability emphasizes the reduction of the company’s carbon footprint. Most often, this occurs through office initiatives such as recycling programs or encouraging employees not to drive to work. However, it may also include other measures such as a commitment to ethical and sustainable resource sourcing or the use of resource-efficient devices. In general, companies which emphasize environmental sustainability often:
- Take aggressive actions to reduce printing and paper usage
- Use Energy-Star certified printers or devices
- Emphasize local business over global
- Introduce employee initiatives such as carpooling
- Use secondhand and recycled supplies such as remanufactured printer cartridges
3. Financial
Most companies – if they’ve been in business for a while – understand and practice economic sustainability. While a business must generate profits to be sustainable, true financial sustainability goes beyond simply being profitable at the expense of everything else. Financial sustainability also involves:
- Correct governance which oversees the responsible handling of financial matters
- Risk management and business continuity strategies to protect long-term investments
- Adherence to compliance regulations of the industry
- An emphasis on cost-effectiveness in everyday decision making
Measuring Sustainable Competitive Advantage
Sustainability is more than merely looking good to customers and shareholders. When a company has assets, qualities, or capabilities which support a favorable long-term position in the market, it’s considered to have a sustainable competitive advantage. This advantage delivers remarkable and profitable results for the company itself. When considering how to achieve sustainable competitive advantage, ask questions such as:
- What values does the company express which competitors do not that raise the company’s reputation in the eyes of stakeholders? Corporate sustainability often leads to a positive reputation in communities and amongst customers, which is challenging to replicate but earns a loyal following.
- How is the company differentiating itself through a specific market niche or products tailored to a particular market segment? By focusing on a more specialized offering, a business makes it harder for competitors to reproduce their product or service.
- What is the company doing to maximize margins and minimize overhead without compromising its sustainability in other areas? Businesses have an obligation to their employees, customers, community, and shareholders, to remain profitable.
AISink Helps Companies Remain Competitive
Sustainability and the sustainable competitive advantage are two interlinked concepts – well-considered sustainability strategies take into account both. Sustainability emphasizes policies and decisions which support the long-term trajectory of a company. The sustainable competitive advantage is the favorable position which a company enjoys in a market due to relatively unique assets, product, and services, or qualities which competitors cannot reproduce. Together, these features help propel a business to success.
AISink helps companies achieve sustainability and sustainable competitive advantages through the introduction of the best office technology for their needs. Contact us today to learn more.
