Understanding sustainable business strategies

As companies navigate the complexities of the 21st century, embedding sustainable business strategies not only sets an expectation for ethical operations but also presents opportunities for innovation and competitive advantages. The pursuit of sustainability reflects a deeper understanding of business impact on the environment and society, fostering a culture of responsibility and foresight. In this blog we'll explore some of the most common sustainable business practices and their significance in and benefits for businesses committed to making a difference.

It's good for the environment, but is sustainability good for business? The National Institute of Standards and Technology (NIST) is a government agency that promote U.S. innovation and industrial competitiveness by advancing measurement science, standards, and technology in ways that enhance economic security.¹ The NIST notes several long-term benefits for organizations embracing sustainability as a part of their business strategy:²

• Brand reputation and increased sales: Sustainable practices can be a powerful marketing tool for some companies and attract customers who look for brands aligned with their core values. Tactics like a commitment to environmental issues, strategies for reducing pollution and pivoting to clean energy consumption may deeply resonate with these customers who feel that they're making a positive impact just by shopping at a certain store.
• Operational efficiencies: By adopting energy-efficient processes and reducing waste, businesses can realize significant cost savings. Consider a manufacturing plant that adjusts lighting levels depending on work schedules or a company that changes packaging materials to reduce waste. Sustainability strategies can even be good for employee retention by inspiring loyalty among workers who are personally committed to instituting environmental practices and like to see that reflected in their workplace.
• Tax incentives and investment opportunities: The U.S. government provides a variety of tax credits and rebates for businesses and manufacturers who take on environmentally sustainable tactics. Investors are also becoming increasingly interested in the environmental impacts of their money. A 2024 report by Morgan Stanley found that 77% of individual investors globally are interested in investing in companies or funds that aim to achieve market-rate financial returns while also considering positive environmental and social impact.³
• Social and environmental impact: The most straightforward reason to adopt sustainable business practices is because it's good for the world at-large. Creating a business model that can balance economic growth with conservation of natural resources or efforts to support ethical labor practices can inspire others to follow suit.

A sustainable business strategy is an investment in the future viability of the world and the success of a company, ensuring it remains relevant and resilient in an evolving global economy. Next we'll dive into the specific ways businesses can work toward environmental sustainability and corporate social responsibility.

There are a spectrum of opportunities for organizations to not just minimize their ecological footprint but to also carve out a path of innovation and efficiency. These are some of the practical ways businesses can weave environmental stewardship into the fabric of their operations.

Energy efficiency: According to the Department of Energy Efficiency and Renewable Energy, energy efficiency is one of the easiest and most cost-effective ways to combat climate change. It also raises the potential for significant cost savings through reduced energy consumption. Energy efficiency in business operations might look like:⁴

• Automated lights in office buildings and warehouses
• Installing LED lighting in office spaces
• Installing solar panels or wind turbines on business properties
• Allowing employees to work remotely to avoid the associated costs of an office building

Waste reduction: While waste reduction might seem like a sustainability tactic that purely benefits the environment, it's actually a worthwhile business strategy that can be used to save money. Does your office still buy a lot of paper goods? Are your employees actually using legal pads and notebooks? Most likely, your organization primarily uses laptops and mobile devices to perform their work duties. Save money by cutting back on the paper goods you supply for the office and redistribute it to other resources or a recycling program. Less waste also can potentially mean less money spent on waste management.

In the journey towards sustainability, ethical sourcing, transparency, accountability, and robust corporate governance are imperative.

At the heart of sustainable business practices lies ethical sourcing. It’s a commitment to ensuring that every product and service used in your business meets economic benchmarks and upholds the highest standards of social and environmental responsibility. Ethical sourcing underlines the importance of fair trade practices, signaling a respect for the dignity of labor and an unwavering commitment to ensuring workers are treated fairly and work in safe conditions. It also means being mindful of the use and environmental impact of business operations on natural resources.

In a world where stakeholders are increasingly holding businesses to account, transparency and accountability stand as pillars of trust. They go beyond simple compliance; they are about fostering honest and open communication with stakeholders, from customers and employees to investors and the wider community. This openness is not just about sharing successes but also about being upfront about challenges and staying committed to ethical standards even when the going gets tough.

Corporate governance plays a pivotal role in embedding sustainability into the DNA of modern businesses. In a company, corporate governance creates frameworks that ensure decisions are made not just for short-term gains but for long-term sustainability. Good governance is characterized by ethical leadership, rigorous oversight, and a clear alignment of business practices with sustainability goals.

A key place that sustainable business strategy and ethical business practices overlap is in supply chain management. The United Nations Global Compact initiative says that a company’s entire supply chain can make a significant impact on a variety of corporate social responsibility concerns including: human rights, fair labor practices, environmental concerns and anti-corruption policies. However, these are also some of the most challenging practices to alter for a company.⁵ Some things that businesses should do to align with a sustainable supply chain model include:⁶

• Ensuring that suppliers respect the rights of freedom of association and the right to collective bargaining, abolishing forced and child labour and eliminating discrimination
• Ensure that they do not cause or contribute to the infringement on the rights of workers and that such infringements are not directly linked to their operations, products or services through their business relationships, including with respect to the right to freedom of movement, freedom from inhumane treatment, the right to equal pay for equal work and the right to rest and leisure
• Engage with suppliers to address environmental impacts (including: toxic waste, water pollution, loss of biodiversity, deforestation, long term damage to ecosystems, water scarcity, hazardous air emissions as well as high greenhouse gas emissions and energy use) by applying the precautionary approach, promoting greater environmental responsibility and the usage of clean technologies
• Engage in meaningful anti-corruption programs can improve product quality, reduce fraud and related costs, enhance their reputations for honest business, improve the environment for business and create a more sustainable platform for future growth

As future leaders navigating the complexities of global business landscapes, graduates from the online MBA at Marquette University are equipped with not only the knowledge but the moral compass to steer organizations toward a more fair, transparent, and sustainable future. Throughout the online MBA curriculum, students will gain an understanding of ethical business and corporate governance, learning how to craft policies and lead organizations that not only thrive financially but also contribute positively to society and the environment.

Become the leader you want to be. To learn more about the program, the admissions requirements, and how ethics play a center role in the Jesuit educational experience, schedule a call with an admissions outreach advisor.