The Importance of Sustainable Practices in Corporate Accountability

Corporations are increasingly in the sustainability spotlight due to the shift in perspectives worldwide. As climate changes continue to affect our lives, business leaders must seek ways to incorporate eco-friendly practices. 

However, sustainability starts with being aware of the issues at hand and knowing what needs to be changed.

The Importance of Sustainability in Business Practices 

Sustainability is becoming more prevalent in all industries. However, many companies seem to have a knowledge gap on what to do when incorporating green practices. Studies show that 90% of executives find sustainability necessary, but only 60% of businesses implement appropriate strategies. 

Although sustainability is vital for driving social and environmental change, it can also contribute to a company’s overall success. According to McKinsey, companies with substantial ESG (environmental, social and governance) propositions can give them a competitive advantage long term. 

It can also increase the bottom line since more customers are willing to spend on sustainable products. In addition, it saves money by reducing energy consumption by 25%-80%  and limits single-use purchases. 

Why Sustainability Matters to Corporate Accountability

Corporate accountability makes organizations maintain sustainable practices and showcases good publicity of a publicly traded company. The SEC requires companies to share reports to satisfy the demands of shareholders and the public. 

These reports must include:

  • Employee treatment
  • Efforts on the production of sustainable goods and provided services
  • Internal management
  • Company culture
  • Quantitative estimates of good and bad business practices

Why Businesses Need to Go Green

Sustainability benefits Earth and offers a way for corporations to drive change. Governments are struggling to address the issues of public goods. While this struggle continues, many companies are coming together to address these matters at hand.

A great example of this issue is palm oil. It’s cheap, versatile and you can find it in many packaged goods such as beauty products and food. In India and Malaysia, 4.5 million people rely on the palm oil industry for a way of living. Additionally, farmers produce 70 million tons of palm oil annually.

However, palm oil production has contributed to soaring greenhouse gas emissions and climate change, a problem the Environmental Protection Agency (EPA) is working to reverse through partnership programs like the Responsible Appliance Disposal Program (RAD).

Fortunately, Unilever, a consumer goods company, dedicated its efforts to only using palm oil from certified sustainable sources. The organization coordinated with its competitors, governments, NGOs and indigenous peoples’ organizations.

As a result, palm oil sustainability efforts have been adopted industrywide. Furthermore, organizations like Unilever continue to sustain these practices as the world reaps the environmental benefits.

Environmental Sustainability and Corporate Social Responsibility

Corporate social responsibility (CSR) and sustainability are critical in many aspects. The idea of these two together in practice can influence social power, company image, economics and conformity. In other facets, CSR provides value where it motivates stakeholders to create a program. 

For some organizations, CSR is an opportunity to gain social power. For example, the green movement is a widespread environmental and social cause attracting consumers to support brands with ethical practices. Companies also focus on being green because it sets an excellent public image for their brand. 

Employees are the primary stakeholders since they undertake sustainable efforts. Change can only happen when workers spread awareness, reduce waste and design product solutions.

As a result, a CSR program can make organizations more effective and become powerful influences in their communities. 

Uniting Creates Change

Corporate environmental sustainability practices are a step-by-step, collective effort. Action is required from stakeholders, surrounding communities and employees.

Corporate sustainability has its challenges, but it’s necessary for building a brighter future.

About the Author

Ginger Abbot is an education and career writer with a special interest in sustainability. Read more of her work on the online education publication Classrooms.