Corporate sustainability: why is it important?

Corporate sustainability is certainly not only one of the most important trends that companies must navigate in a decisive and credible way, it is also an element that is increasingly required by consumers to choose which brand to buy and which company to trust and support. 

Obviously, however, corporate sustainability is also something more profound: it is a new type of approach to business that requires companies to rethink their organization across the board in order to make their activities less impactful on the surrounding environment. 

For this reason, corporate sustainability is a very serious and delicate issue to be addressed with due care and with all the commitment that is necessary to implement a radical transformation of this kind.


New call-to-action


An increasingly green society requires increasingly green companies 

It’s no mystery that the need for an eco-sustainable turnaround is becoming increasingly pressing at all levels. 

Events such as Fridays For Future, which mobilized young people in many cities, or COP26 in Glasgow, which engaged (almost) all of the world’s major countries and their leaders in a joint effort to address the environmental emergency, are all examples of how sustainability is now a constant element in public debate and in everyday life at all levels. 

This attention, as we said,also  has a clear and direct reflection on the behavior of consumers, who, according to the most recent observations, have become “eco-active.” In other words, they feel responsible for the environment and modify their behavior accordingly.

Suffice it to say, according to the #WhoCaresWhoDoes research carried out by Gfk, one person in five at the international level has stopped buying certain products or services precisely because of their negative impact on the environment or society in general.

Other results that are consistent with this are also collected when we turn to the national level: during 2020, eco-active consumers have increased everywhere, even in Italy where the segment is about 23%. 

But the trend is absolutely on the rise and shows no sign of stopping. It is predicted that within a few years, environmentally aware and committed consumers will become 40% of all consumers worldwide. 

This is a large segment of the population that companies cannot ignore if they want to remain competitive in the long term. But that’s not all. 


New call-to-action


Between saying and doing, the company is in the middle 

There’s another curious trend that should push companies to pay attention to corporate sustainability, which is that of the gap between intention and action. 

In other words, a good number of consumers express an absolute will to commit themselves to protecting the environment, yet they often struggle to put these intentions into practice. Conversely, these same intentions are also projected towards others and transformed into duties that must be fulfilled by the government (for 28% of Italians) and by companies (37%).

This means that now, more than ever, companies are invested with a role and a responsibility that they did not have before, and for which they must now account to the same consumers for every single choice. 

But what can a company actually do to achieve corporate sustainability? 


New call-to-action


Corporate sustainability requires a cross-disciplinary transformation 

In reality, there are many things that a company can do to become more sustainable and they can affect different aspects of its business. 

For example, a concrete action can concern the energy resources used, making sure that some sectors or some production phases use “clean” energy, choosing alternative sources or energy autonomy. 

Increasing energy efficiency is a possibility, which translates into creating plants that make it possible to save energy or minimize its waste, with benefits that are not only environmental, but also economic. 

Speaking of economic benefits, another intervention can be linked to dematerialization

How many tons of paper are used per year by various companies to carry out even the most mundane operations? The purpose of dematerialization is to replace the paper support with the digital one, so as to reduce the use of inks and paper.

Obviously, the whole process is much broader, as it requires a digital transformation of the entire company, so that solutions that modify workflows can be effectively integrated, avoiding a funnel effect that a superficial elimination of paper would cause. 

From this, you can also understand that digitization itself is one of the possible alternatives that a company has to make itself sustainable, since digital transformation provides tools that allow you to better monitor, control, and improve each work phase. 

In this sense, the digital resources available to companies can also be used to improve waste management, another key aspect of corporate sustainability, which is closely linked to a new way of designing products so as to make the entire process more efficient, reducing waste, and ensuring a longer life for the products themselves. 


Five areas to work on and five characteristics to have 

In essence, there are many areas where a company can take action to achieve corporate sustainability. 

In addition the different examples seen above, we can identify five areas where companies can engage to implement a eco-sustainability strategy: 

  1. the production of energy through alternative sources 
  2. waste management and recovery of waste and products  
  3. the optimization of logistics and internal company procedures 
  4. product design innovation 
  5. efficiency of production processes and staff structures

Therefore, it’s clear that the intervention required for a truly green turnaround of the company is no small affair. Indeed, it requires a considerable and constant effort over time, because corporate sustainability is typically not limited to the environmental component, but often involves other ethical principles that intersect with the environment. 

This considerable complexity translates into certain characteristics that all sustainable and economically competitive companies must develop in order to maintain a position of predominance. 

These characteristics were described by Sole24Ore in an article that is based on the observations of MBS Consulting and which can be summarized as follows. 

The first essential characteristic of a successful sustainable company is a long-term vision: environmental transformations take time, and shortcuts or easy solutions cannot be adopted, since this, as we shall see, can have very negative effects on the company itself. 

The second characteristic is the knowledge of its stakeholders, which requires precise, reliable, and constant monitoring so that there is a balance between the business and other needs that coexist within a company. 

Also, a business that is sustainable must guarantee a high level of satisfaction to all stakeholders, which includes objectives that are consistent with the long-term vision of the company that must be shared not only with the management, but also with the entire workforce. 

Another essential feature to achieve corporate sustainability relies on spreading the idea and the awareness that the ultimate goal of the business is to create added value for the entire context where it operates, both for stakeholders and employees at all levels of the company. 

Understanding this and transmitting it to all levels ensures greater awareness on the part of all operators and allows the company to consolidate its competitive position over time. 


The concrete commitment of companies when it comes to corporate sustainability 

Once this theoretical part is understood, we can ask ourselves what activities companies are concretely putting in place to achieve corporate sustainability. 

The Energy & Strategy Group of the Politecnico di Milano university recently carried out a study, “Green Tech,” on this very subject, interviewing 80 companies to understand the importance of sustainability, their priorities and, above all, the areas where companies are actually working on sustainability issues. 

In particular, one of the aspects considered most relevant is efficiency in the use of production factors and energy and environmental optimization of facilities, at least according to 59% of the companies surveyed (34% efficiency, 25% recovery).  

Then comes the issue of recovery and recycling, which is generally seen by companies as a key factor to be implemented in order to decisively reduce production costs and not only, since, as mentioned above, the issue of waste and its management is one of the most delicate and complex aspects of any economic activity. 

The energy issue, on the other hand, is more delicate and presents some more difficulties. The use of renewable sources, for example, is a green practice that has still not broken through in a meaningful way among Italian companies, which often give up implementing certain energy technologies, also because of recent regulatory changes that make this transformation complex and costly. 

Among other things, another interesting (and comforting) finding emerges from the research, namely that corporate sustainability has also become a significant line item to which Italian companies are dedicating more and more of their budgets.

About 60 companies, therefore the clear majority, have declared that they have a budget that is  not generically dedicated to sustainability, but to specific projects whose control falls on the company management. 

However, only 22 companies said that they manage the related process of allocation, planning, and control of these internally financed activities. 


The missing leap 

This lack of organizational autonomy is often discounted from the point of view of the resources employed, given that there is a lack of certain professional skills and roles such as Environmental Manager, the Sustainability Manager, or the Energy Manager in many companies . 

Similarly, cases where there is a dedicated team are very rare, just as none of the companies surveyed recorded a dedicated organizational structure or measurement systems to assess environmental performance

This means that there is still a long way to go. It’s no coincidence that over 40% of those interviewed consider themselves to be stuck in the middle, i.e., they have managed to begin a process of sustainability, but are unable to complete the process completely, either on a technical or organizational level or in terms of competencies. 

In other words, this is a good place to start, but corporate sustainability doesn’t allow half-measures. 


A choice that requires an integral transformation 

As mentioned above, corporate sustainability is a topic that is particularly dear to all consumers, which has two very relevant consequences for companies. 

A positive consequence is that corporate sustainability represents a formidable competitive lever that can be used in the market, since it helps positioning and is attractive to customers. 

On the other hand, once a company embarks upon the path to sustainability, the transformation must be fully accomplished and cannot simply be hinted at or, worse, only announced and then not respected. 

In other words, greenwashing must be avoided by limiting empty statements of principle or hasty operations that have little impact in terms of benefits for the environment and for the context where the company operates.

Behavior of this kind never goes unnoticed, especially now that the internet and social media not only make consumers more attentive and able to unmask these dishonest strategies, but also provide a formidable megaphone with which to raise collective indignation. 

For this reason, it’s important that every company completes its journey and makes itself increasingly sustainable: the organization’s very ability to be competitive and credible in the marketplace depends on it.