Sustainability is not a fad. The recent UN Climate Change Conference (COP26) in Glasgow broke attendance records as nearly 40,000 delegates made this the largest climate summit to date.
Such strong participation reflects the increasing concerns of both the public and corporate interests over our collective impact on the environment. Sustainable business operations are on the rise as global efforts to establish a more environmentally-friendly society increase.
It’s clear that more of us are ready to tackle the climate crisis in better ways. Read on to learn more about sustainable business practices and the top sustainability trends to look out for in 2022.
The Four Pillars of Sustainability
A well-rounded approach to corporate sustainability should account for the four pillars of sustainability—Social, Human, Economic, and Environmental. Each of these pillars represents an area where businesses should strive for sustainable operations.
Social
The Social Pillar refers to the broader impact a business has on society at the local, national, or global level. Transparent governance, community consulting, and a culture that promotes beneficial social practices are all ways to remain socially sustainable.
For example, your business can foster social sustainability by providing jobs for diverse individuals and groups, making ethical supply chain choices, and setting a positive example as an entity. Fair pay, safe working environments, and an emphasis on enriching employee experience contribute to responsible resource use—a critical element of environmentalism.
Human
The Human Pillar focuses on creating positive change in the production, provision, or consumption of business products or services. Investing in healthcare, education, or training services are ways to foster human sustainability.
For example, your business can practice the values of the Human Pillar by providing health benefits to employees and their family members or by supporting educational services in local communities. A focus on your employees’ health, learning, and skill development can encourage sustainable awareness at the individual and community levels.
Economic
The Economic Pillar balances the need for economic growth with the needs of the other sustainability pillars. Businesses achieve that balance by prioritizing monetary expansion that does not deplete natural, human, or social capital.
For example, your business could make environmentally-positive economic choices such as investing with other companies committed to resource preservation. You could also create business relationships with entities that offer mutually-beneficial social and sustainable initiatives. Business growth should support the broader health of the economy while still improving the standard of living for all.
Take note that you do not need to select green causes over profits. Instead, choose initiatives that offer growth yet still contribute to the environment in a meaningful way.
Environmental
The Environmental Pillar focuses on the impact a business has on the environment, natural ecosystems, and social health systems. An environmentally sustainable business can meet the needs of the current population without compromising the needs of future generations.
In practice, this could mean that your business does not produce pollutants, deplete resources, or damage neighborhood environments. For example, you could plant trees to offset your paper consumption or develop a paperless process that results in no deforestation at all.
What Drives Sustainability Trends?
While many factors drive the current sustainability trends in business, the following examples showcase three of the main contributors that are likely to play a critical role throughout 2022.
Regulation
There are no current standardized global agreements to regulate corporate sustainability, but specific countries or regions have instituted unique environment laws. The European Union applied the Sustainable Finance Disclosure regulation in March 2021, setting the rules for environmental practices for financial market participants. The UK’s Competition and Markets Authority (CMA) recently released a series of guidelines to help businesses navigate sustainability agreements. Regulations will help spur corporate and individual action.
These examples all predict a future in which sustainability is more state-regulated, and compliance laws hint at the possibility of global accords that set out minimum acceptable levels of business sustainability. Even China, the world’s largest source of greenhouse gas emissions, actively enforces an evolving collection of comprehensive environmental regulations.
Industry Standards
There are over 400 sustainability standards relating to environmental issues that your business could voluntarily adopt. Industry standards allow consumers to make informed decisions and select sustainable products or services. Associations such as Fairtrade and Rainforest Alliance can assure your customers that your organization follows green business ethics and certified sustainability initiatives. As the popularity of sustainable options continues to grow, more businesses and industries will opt for more standardized programs.
Social Pressure
Advocacy for sustainable practices continues to gain traction with the public, with 85% of global consumers making more sustainable purchasing decisions over the last five years. One-third of Millenials stated that they are willing to pay more for sustainable products or services. Younger generations are driving change by demanding more sustainable options, and your business can meet that demand.
Notable Sustainability Trends
Looking to the future, several corporate sustainability trends are likely to continue into 2022 based on the current adoption rates. Let’s examine a few of these continuing sustainable practices.
Sustainable Finance
Businesses are increasingly making sustainable financial decisions or holding themselves accountable when failing to meet green standards. In 2020, Visa introduced its green bond worth $500 million to foster environmental sustainability and a sustainable payments ecosystem. Tesla recently cited ecological concerns as the reason they backed out of accepting Bitcoin payments.
EU regulations also require financial advisors and financial market participants to disclose sustainability information to potential investors, a huge step forward for investment transparency in the EU.
If you and your business already implement sustainable financial options, you will remain ahead of expected legislation, all while creating sustainable economic growth.
Renewable Energy
The price of power from renewable sources has plummeted over the last decade. As it’s now one of the cheapest options for power today, we are sure the widespread adoption of renewable energy will continue.
Apple, Intel, Google, and Microsoft are all heavily reliant on renewable energy, citing price and price predictability as reasons for the switch. Your business can also leverage the cost savings included with clean energy for better business efficiency and a greener future.
Give-Back Programs
Organizations like Nordgreen have introduced Give-Back programs, where businesses donate portions of their profits to charities, relief efforts, and other good causes. The popularity of this approach continues to grow, and if you implement a similar program, your business could attract new consumers who are looking to give back through their purchases.
Sustainable Food Products
Food production, packaging, shipping, and waste are all undergoing a sustainability revolution. For example, seaweed, cornstarch, or mushroom-derived products are all replacing plastic packaging. In a bid to reduce food waste, manufacturers are innovating around surplus or leftover ingredients to create or supply new products such as Cascara Coffee and insect protein.
If your business deals with quantities of food or extensive shipping and packaging operations, you can select sustainable options that help your bottom line and also help preserve our natural resources.
Innovative Partnerships
When sustainability goals intersect, businesses can form partnerships that multiply for effectiveness and efficiency. For example, the 10x20x30 initiative saw leading food retailers engage with over 200 of their suppliers across 80 countries to cut food waste in half by 2030.
Frameworks such as the Partnership Assurance Model (PAM) are also coming to the fore, which assists regions in creating cross-sector partnerships to increase sustainability as a whole rather than as individual businesses. Your business can use environmental initiatives to share resources, reduce waste, and encourage cooperation that will lead to economic growth.
Net-Zero Emissions
Setting a net-zero emissions goal is increasingly common for corporations. Businesses now track, reduce, eliminate, or otherwise offset all carbon emissions they are responsible for creating.
Hundreds of businesses have made net-zero emission pledges, such as Dell, BP, Walmart, and General Motors. If your business can implement the infrastructure that allows you to reach net-zero emissions, not only will you contribute to a reduction in harmful C02, but it will attract environmentally-conscious investors and customers who want to shop with like-minded companies.
Find a Partner to Innovate On Sustainability Trends
A business with no sustainable development goals is at a severe disadvantage in today’s marketplace. Environmental practices open the door to new opportunities and offer immense benefits to our society and the planet. With the right approach, a sustainable business can meet and exceed the profitability of less environmentally aware competitors.
If you need help connecting with sustainable partners, MassChallenge can help, as we bring startups, partners, and experts together to develop new approaches to environmental business practices. Our accelerators foster innovation in all areas, including sustainability, which provides unique opportunities to amplify the impact of your business through collaboration.
Get in touch with MassChallenge to find out how you can embrace sustainability trends to scale your startup.
