Sustainability means measuring the overall performance of a company against prevailing and forthcoming Risks. It includes financial and non-financial risks. Corporate sustainability is an approach aiming to create long-term stakeholder value through the implementation of a business strategy that focuses on the ethical, social, environmental, cultural, and economic dimensions of doing business. Environmental and Social Governance (ESG) are non-financial performance indicators that deal with issues of sustainability, ethical and corporate governance. This includes managing an organization’s carbon footprint, waste emission, pollution, resource depletion, deforestation, climate change and not overlooking steps that ensure accountability.
Although internal factors can be controlled, external risks like natural disasters, political risks, etc. are unpredictable and uncontrollable. The cost of not mitigating such risks is high.
Long-term sustainability means measuring full-system of an organization’s corporate governance accurately, after obtaining verified, adequate, and reliable information.
Some of the measures to bring long-term sustainability in an organization are as follows:
- Reduce, Reuse and Recycle Approach
The 3-R approach when adopted by the company reduces the use of non-renewable resources, resulting in reduced waste generation and decreased pollution. The board should promote the use and promote the use of renewable resources and take steps to reduce carbon footprint. This will help bring a change in the mindset of the whole industry and result in long-term sustainability.
- True Purpose of the Organization
Every board needs to determine organizational policies and practices to achieve their goals. These practices and rules will guide all their operations viz. recruitment, employee supervision, product development, manufacturing, sales, and customer satisfaction. A board must frequently reassess their sense of purpose because reassessment of purpose helps in measuring the performance and allows long-term sustainability.
- Appealing to the right clients
Attracting the right clients for business means finding people who have the same values as your organization regarding sustainability and development. Ones who essentially do something to help preserve the environment. Customers having a similar mindset will promote use of greener and renewable resources. Having customers with a different mindset might be profitable in short-term, but that will not bring long-term organizational sustainability.
A leader’s role is to solve problems, be a visionary and grab opportunities that others aren’t yet able to foresee. Most of the successful leaders depend on their instincts as much on statistics before taking a risk. They are the pillars of any organization. Leaders are motivators. They are introspective, futuristic, and passionate. Optimism is an inevitable leadership trait. To assure that the organization not only grows and flourishes, but the leaders should also carry out a strategic organizational evaluation from verified data. This is the key to organizational success.
Accountability means evaluating if the goals were achieved, tracking the progress, communicating the same to stakeholders and shareholders. Accountability helps in setting future goals, making decisions on the basis of previously generated results to gain higher returns and predict future sustainability.
When the board members of an organization want to achieve long-term sustainability, they will opt for greener and renewable options. This will reduce the chances of unexpected and ESG risks, and will help gain a competitive advantage in the market. It will also attract new investors, and help in boosting the organizational goodwill. It will also prove to be a strategic opportunity for any business to grow.