This is a guest post by sustainability expert Stephen Last on how to create a sustainable startup.
I’m going to show you four easy steps to make your startup more sustainable.
During my time working in some of the world’s most fast-paced companies, and specifically as the person responsible for driving sustainability at Deliveroo, I realised there’s a lot of confusion around what sustainability is and what it means to be a sustainable business.
Some within the organisation believed it to be us “doing our bit” for the environment, others thought it was about making our operation more efficient and cost-effective, and there were also those who believed it was “non-essential” and shouldn’t be deemed a priority for the business.
Due to this, I spent a lot of time educating people across the organisation on what sustainability really means and also the benefits that come with incorporating it into the operation. Benefits such as increasing compliance, productivity and efficiency, while lowering costs and reducing the environmental impact of our business. It’s a win for profit, for people and for the planet.
More and more companies are integrating sustainability into their strategy, as they realise they can do well while also having a positive impact. A McKinsey survey found 70 percent of companies have in place formal governance of sustainability. Their incentives for doing so include reputation management, saving energy, developing green products, and retaining and motivating employees – all of which helps companies capture value through growth and return on capital.
What does it mean to be sustainable in business?
Sustainability in business usually falls into one of two categories:
- The effect business has on the environment.
- The effect business has on society.
The goal of a sustainable business is to make a positive impact on either one of those areas. If a company fails to assume responsibility then the opposite could happen, which leads to issues like environmental degradation, inequality and social injustice.
Why is sustainability important for business?
Other than helping curb those global challenges, sustainability can drive business success. Several investors today use Environmental, Social and Governance (ESG) metrics to analyse an organisation’s ethical impact and sustainability practices. Investors look at factors such as a company’s carbon footprint, water usage, community development efforts and board diversity.
Research from McKinsey shows that companies with high ESG ratings have a lower cost of debt and equity, and that sustainability initiatives can improve financial performance while fostering public support. Nearly 3,000 employees said the strongest motivations for adopting a sustainable mindset are to:
- Align with a company’s goals, missions or values;
- Build, maintain, or improve reputation (meet or exceed customer expectations);
- Develop new growth opportunities.
Incorporating sustainability can have a direct impact on a company’s ability to do well.
Follow these 4 steps, by Harvard Business School, to align your business strategy with your sustainable mission and create a sustainable startup
1) Assess the problem and define your sustainability objectives
The first step to driving change is assessing what sustainability means to your team, company, industry and customers. Consider the big problems each of these groups thinks is a priority. Consider asking questions such as:
- How much waste is the organisation creating?
- Is our company culture struggling?
- Are our hiring practices attracting diverse job candidates?
- Is our product targeted to help a certain audience?
- What impact does our company have on the local community?
Answering questions like these will help you establish your company’s sustainability objectives.
2) Establish your mission
Once you’ve agreed on concrete objectives, you’re ready to define your company’s mission. A distinct mission statement is an important part of becoming a more sustainable business.
An effective mission statement outlines your company’s focus on doing. It should effectively capture your organisation’s values and purpose, and serve as a guiding light for why you do what you do.
3) Develop your sustainable startup strategy
With a strong mission, you’re ready to re-align your organisation with a sustainable business strategy.
In crafting a sustainable business strategy, it’s important to ensure your company remains profitable. This is your number one priority. You can’t help your cause if you can’t stay in business. And as proven, your sustainability efforts may help you become more profitable.
You’ll probably find there are some quick wins. For example, does your company typically leave the electricity and heating on overnight, even while there are no employees on site? Imagine what savings could be realised – in terms of both cost and emissions – if the last person to leave the office simply shut them off? By putting a little thought into building a robust sustainability strategy, you can help both your company and the environment in the long term.
4) Measure your results
It’s one thing to talk about a newfound motivation to do well and do good. It’s quite another to take a public stance, pledge quantifiable results and actually achieve them. With your mission and strategy solidified, you’re ready to make strides toward reaching your objectives.
As you implement your strategy, remember to revisit this process periodically to ensure your objectives, mission and progress remain aligned.
By following these four steps you can implement a strategy to take you from purpose to performance, and create a more sustainable business.
About the author
Stephen Last is a sustainable living advocate and IEMA certified sustainability advisor.