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The Holistic Nature of Corporate Sustainability and Practical Benefits

Submitted by: Nikos Avlonas

Posted: Aug 01, 2016 – 06:00 AM EST

Tags: corporate sustainability, finance, economy


With the financial crisis forcing organizations to look beyond their bottom line and prove themselves as responsible and trustable, the issue of Corporate Sustainability rises as highly important. It is an issue that involves all of its main functions, such as HR, Marketing, Supply, and therefore brings value to the whole organization.

This is also claimed by a recent McKinsey survey, saying that many companies are actively integrating sustainability principles into all their businesses. And they are not only doing so for reputation management, but because this leads to major growth through energy saving, developing green products and retaining and motivating employees.

According to the same survey, more and more professionals and organizations show a sounder understanding of sustainability and the cross-functional benefits it presents, in terms of reducing costs, improving operational efficiency, optimizing processes and identifying and pursuing new business opportunities. Not surprisingly at all, employing such practices increases profits and gives organizations a clear competitive advantage in their market and industry. Furthermore, an added advantage for public companies is that they gain a possible listing in the FTSE4Good or Dow Jones Sustainability Indexes, or other similar indices. This may enhance the company’s stock price and make shareholders happier. Of course, the value offered through sustainability differs across industries and especially between B2B and B2C companies.

A common mistake in organizations that often prevents them from effectively capitalizing on corporate responsibility initiatives is a too top-down approach. Decisions are taken in the boardroom and are passed on to the corresponding department to implement them. What would be needed is a more bottom-up approach, with the engagement of internal and external stakeholders. The Marketing department, in particular, could offer much expertise in this area, in order to explore needs and demands of important stakeholders and leverage their valuable feedback, resulting to richer, improved and more targeted sustainability actions.

This is why we need more than a long-term strategic view of corporate sustainability; In order to create sustainable value for an organization, all of its functions must actively take part in the process and specific metrics should be applied to quantify results and benefits . This is the optimal way to differentiate the organization and its products from the competition and allow corporate sustainability to create added   value to companies and other organizations.


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