Sustainability Issue
The reflective journal is a discussion on the issues, challenges, concepts and approaches of sustainability and their intersection with the business world. There is also further discussion on the six forms of capital used by business and the six phases of business approach to sustainability. Here I have also given examples of companies involved in sustainable business.
The present scenario views sustainability as a far wider concept than the environmental issues. This is because sustainability defines the concept of behaving in a responsible manner that is the core aspect of operations and strategy (Bachoo, Tan, & Wilson, 2013).
According to my understanding, the concept of sustainability has migrated to the mainstream from the sidelines. Thus, with various restrictions imposed companies around the world faces a future uncertainty in terms of natural resource availability like water, raw materials access and energy cost(Schaltegger, Lüdeke-Freund, & Hansen, 2012). Therefore, increasing number of businesses is considering environmental sustainability as a key concept. On the other hand, some business comes under scrutiny for the role they are playing in their society. The emergence of social networking, NGOs, media have also put various companies under scrutiny and forces them to hold an accountability about the treatment towards the workers, their corporate culture and the means by which they source and maintain the quality of the products.
From the perspective of corporate sustainability, balancing three things is of utmost importance. These include profit, planet and people and known as the triple bottom line concept. The concept is however responsible for shaping the environmental efforts of many corporations around the world. However, the three big sustainability challenges that business faces mentioned below (Carroll & Buchholtz, 2014).
It is often a common belief that sustainability practices increases the cost of the business that in turn becomes a consumer burden. However, in reality the reverse is true. The increased efficiency whether it is in the form of operational resources or usage in energy can result in decreased cost and the betterment of the organization’s environmental responsibility.
For instance, here if we draw in the example of Sprint that introduced the concept of buyback program where they bought old phones from customers for recycling one can really see how organizational cost reduced. Here I can show you a statistics that states that consumers made $100 dollars since the year 2001 in exchange of 53 million devices. However, the company in return made huge money by saving around $1 billion dollars.
The metrics for ensuring sustainability is not clear. However, a number of companies have recognized that shortage of water and change of climate can result in significant cost and thus taking necessary precautions needed. Many companies have used indices like valuing natural capital initiative that ensures better understanding of the concept of sustainability.
There has been survey that showed that around 700 businesses have failed to make change through policies that support sustainability due to lack of willingness from the colleagues and senior management. Achieving sustainability is only possible when everyone cooperates and is engaged in the same mission.
How is it affecting the Business World?
Big businesses have a substantial impact on the society and planet when they make a change in their policies. There are however ways that the business can follow and take their business to a better level (Crane & Matten, 2016)
The Business dependency on raw materials reduced through leasing, sharing and renting. Companies like Philips therefore sell lighting as a service where it not only takes the responsibility of installation of lights but also ensures re-cycling of end-use equipments. Through the process, ecological footprint reduced because of energy efficient lighting solutions and closed material loops.
The concept of open loop refers to where the company is considering recycling its waste. For instance, in this case if we consider the case of Belgium based mining company Umicore we can see that the company has created 20 different metals from not only production scrap but also materials that have an end of life.
Most companies now involve in innovative ways for funding through low carbon energy investments and thereby emphasize collaboration. For instance, the example of a Danish company Novo that went into partnership with Dong energy have resulted in the bill reduction of by about 21% and at the same time took initiative to fund Dong’s portfolio of renewables.
Here we can discuss the example of Pepsico for taking initiative of being restorative. Thus, reports say that the company uses 5.8 billion liters of recycled water for its manufacturing facilities.
There are six forms of capital that business use. These include 🙁 Rosemann & vom Brocke, 2015)
Natural Capital: This includes the natural resources that the company mainly relies on which includes the ecosystem as well the regulation of the climate.
Human Capital: The capital based on the health, skill, experience, attributes and motivation that the business gets from its employees.
Internal economic capital: Financial capital including equity finance and debt and non-financial capital that includes the value of the brand comprises of the internal economic capital.
Relationship and Social Capital: The shared capital of intellectuality of the team, group of individuals and networks comprises of this capital.
Constructed Capital: The capital constructed or cultivated by humans like the ecosystems, buildings, material objects and other systems are included as this form of capital.
External Economic Capital: The impact of the financial and non-financial capital entities that affects an organization comprises of this capital.
The complexity has been so overwhelming that it has led to disruption and loss of sustainability of the business. Business can therefore follow the mentioned the approaches to sustainability (Dai & Blackhurst, 2012).
When there is so much of uncertainty around it is the primary responsibility of the business entities to indentify and detect the hidden and underlying patterns responsible for chaos. Thus, companies need to recognize the patterns to build further opportunities (Kraus et al., 2012).
We must not forget to upgrade ourselves on a constant basis and the ways in which we work. This is however, based on a continuous process that results in creation, collaboration, communication and critical review. To enable this there are not only various tools available but also other organizational process designed for adaption.
The concept of openness enhances the capacity of the organization at the social and commercial level (Mooi & Frambach, 2012). The organization must play a key role in ensuring that participatory culture function in a proper manner. Moreover, the concept also promotes redistribution and sharing of knowledge, data resources, wealth and information.
The organization in order to maintain sustainability must ensure diversification of cultural expression, opportunities ensuring peer learning and skill valuation of an individual that leads to their empowerment.
Organization as an approach towards sustainability must ensure a fine tune and value based approach for encouraging the craft of innovation.
There should be change of systems that will enable the organization to face more real and significant challenges that comes in the way of the paradigm of existence.
Conclusion:
The reflective journal ends with the discussion about the six phases of business towards sustainability. There is also discussion about the various types of capital that the company or business cannot do without or the business cannot do without. The article further discusses about the concepts of sustainability in the business world and the challenges of the business world
References:
Bachoo, K., Tan, R., & Wilson, M. (2013). Firm value and the quality of sustainability reporting in Australia. Australian Accounting Review, 23(1), 67-87.
Carroll, A., & Buchholtz, A. (2014). Business and society: Ethics, sustainability, and stakeholder management. Nelson Education.
Crane, A., & Matten, D. (2016). Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press.
Dai, J., & Blackhurst, J. (2012). A four-phase AHP–QFD approach for supplier assessment: a sustainability perspective. International Journal of Production Research, 50(19), 5474-5490.
Kraus, S., Rigtering, J. C., Hughes, M., & Hosman, V. (2012). Entrepreneurial orientation and the business performance of SMEs: a quantitative study from the Netherlands. Review of Managerial Science, 6(2), 161-182.
Mooi, E. A., & Frambach, R. T. (2012). Encouraging innovation in business relationships—A research note. Journal of Business Research, 65(7), 1025-1030.
Rosemann, M., & vom Brocke, J. (2015). The six core elements of business process management. In Handbook on business process management 1 (pp. 105-122). Springer Berlin Heidelberg.
Schaltegger, S., Lüdeke-Freund, F., & Hansen, E. G. (2012). Business cases for sustainability: the role of business model innovation for corporate sustainability. International Journal of Innovation and Sustainable Development, 6(2), 95-119.
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