Why is sustainability important?

Sustainability is the corporate buzzword that doesn’t quit. You’ll hear it on every level, from legislation to investors to individual consumers. 

The job of corporate leaders is to handle the word correctly and recognise its importance. It’s not a fad; it’s not “woke”; it’s the lens through which we visualise a new level of corporate efficiency. 

Sustainable development goals (or SDGs) are there for a reason.

The thing about “sustainability” is that it has a lot of contexts. Your mind might jump to combatting climate change, which makes sense, but it’s not the only one. 

Businesses also need to worry about sustainability in their communities, the workforces they oversee, and the boards and executive teams that lead them. 

So, when it comes to the question “Why is sustainability important?” the answer has a lot of contexts too. Your challenge is to appreciate each one and how it fits into corporate strategy.

You’ve seen the summits and heard the debates; maybe you’ve even been in the middle of an increasingly common weather disaster somewhere in the world. 

Beneath the fiery arguments, there is growing recognition that the climate is changing. Given their role in resource depletion and pollution, businesses are being held accountable in the fight to stop that change. Society wants them to be eco-friendly. 

This means more pressure to adopt sustainable practices such as reducing carbon emissions, conserving water, and minimising waste, in other words – creating sustainable products for sustainable living.

Financial sustainability is everything in a world facing skyrocketing costs. 

Not only that, but stakeholders are growing more concerned about how a company uses its money. It’s not an era of frivolous spending; it’s one of checking and double-checking for maximum efficiency. 

The onus is on corporate leaders to ensure that operating costs are reasonably low, returns are healthily high, and funds are always available to deal with sudden shocks or market shifts.

There are all kinds of risks. Many require intense planning and outside-the-box thinking. The last four years are a testament to that. 

Today’s Corporate leaders worry about risks they wouldn’t have even considered in 2019. 

Managing these fluctuating risks is a major key to sustainable business, and stakeholders know it. They want to see safeguards built into all levels of corporate strategy. They want a clear, thorough defence in place so that one unchecked risk won’t jeopardise the entire company.

Consumers and politicans are more conscious of stakeholder welfare than ever before. A company can’t remain sustainable unless it appreciates this fact. 

Realistically, this means fair labour, diversity, equity and inclusion (DEI), and community care will help build a company’s long-term success – if they are done right, of course.

A company might have gotten away with falling short in the above areas in the past. Now, though, lawmakers worldwide are rallying behind sustainability in all its meanings. 

But it’s not just encouragement anymore. Companies must comply with good governance rules, emissions targets, diversity quotes, and community appreciation – all while maintaining a healthy company for shareholders. If they get this wrong, governments will hit them with penalties. 

What’s more, they need to have the data and communication to back their work up. If you’re familiar with the world of ESG (environment, social and governance), you’ll know that ESG reporting is getting more complex every year. 

It’s a tricky balance, but it’s essential to get right. The last thing a company wants is regulators on their case seeking fines, court appearances, and even jail time when wrongdoing occurs.

Sustainability is important because money, laws, and public opinion are spiralling around it. It’s a vast concept and a challenge to unpack, but that’s the modern responsibility of an executive or board member.