Corporate sustainability refers to a company’s ability to remain productive and profitable in the future, either in terms of customer loyalty, industry adaptation, or ecological impact. It is important for both altruistic and financial reasons, as sustainable businesses are likely to have lower operating costs and remain relevant in the future.
Corporate sustainability can often refer to one of two different concepts that can be linked or used as stand-alone terms. In one sense, it often refers to a company’s sustainability in terms of growth and development of new and repeat customers. This often involves customer retention, the future of whatever industry or business a company operates in, and how a company is run by its officers. Corporate sustainability can also refer to how a company can be sustained in an ecological and global sense, with regards to the company’s environmental impact.
In both senses of using the term, corporate sustainability generally refers to the company’s likelihood and ability to remain productive and profitable in the future. The economic sense of the term typically refers to how a business is run, how well customer loyalty is maintained, and the future of the industry. Customer retention is a vital aspect of business sustainability as it can not only create repeat business but also new business as customer satisfaction leads to word of mouth growth. Many companies use various programs and initiatives to increase customer satisfaction and loyalty in order to ensure continued business sustainability.
Corporate governance and the future of the industry are both aspects of corporate sustainability that can be just as important, if not more, than customer loyalty. A business may make profits but not be sustainable if those funds are not managed properly and channeled back into the business to promote sustained productivity and growth. Similarly, if the direction of an industry is changing, a company will typically need to adapt to these changes in order to survive and remain relevant within the industry.
In ecological terms, corporate sustainability often involves the impact a business has on the environment and its use of resources. Greater sustainability can come from programs that reduce company-generated waste, promote recycling and the use of recycled raw materials whenever possible, and avoid unnecessary strain on the environment. Many retail businesses, for example, will use dim lighting during hours when fewer customers are likely to be in the store. Not only does this save the business money on electrical costs, but it also reduces the amount of resources that store uses.
Corporate sustainability in this sense is vital to business for two quite different reasons. On a purely altruistic level, this kind of sustainability matters because of the environmental impact of businesses on the well-being of other living beings. From a financial perspective, a sustainable business is not only likely to have lower operating costs, but is also more likely to remain a relevant business in the future. Businesses that produce excessive waste and require large quantities of raw materials are often targeted by government regulations to reduce waste and may simply not be able to continue operating as resources dwindle.
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