What Are The Challenges Of Sustainability In Business?

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by Eric Burdon
Image of white sustainability jigsaw puzzle pieces being juggled by wooden figure
Image by Freepik

Going down the sustainability route for a business is both difficult and expensive. And the path is all the more challenging when our current system makes it easier to drain resources, treat workers poorly, and bribe government officials out of ever doing anything. But while that is the case, people are realising that those tactics are neither sustainable nor beneficial for humanity.

There are companies that take pride in being B-listed businesses. And there’s a sense of branding behind solving particular issues in the categories of environmental, social, and governance. That doesn’t take away from the challenge, but these can be enough incentives to take the leap and work towards being a sustainable business.

The least that we can do is outline some of the challenges that your business might face along the way.

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Costs and Investments

This one is a given but still worth iterating in that sustainable initiatives require upfront investments, and you might see a rise in operational costs in the short-term. It’s akin to installing a solar panel on your own home. The initial cost and instalment are going to be expensive no matter what. But over the years, you’re going to become more energy efficient. 

Sustainable businesses work in the same way, where you’ll see more growth and improvements on a long-term basis. It’s more of a matter of getting over that initial cost.

Supply Chain Challenges

Whether you’re running a current business or setting one up, supply chain management can be difficult, and for many, they can’t always trace where the raw materials are coming from. It’s particularly hard for small or medium-sized businesses to develop a robust supply chain model if larger suppliers might not pay attention to your demands or requests.

All in all, the biggest challenge is transparency and finding suppliers who are willing to be transparent about their practices, their manufacturing processes, raw materials, if they reduce waste, improve efficiency, and seek to develop end products that don't just lower costs, but take ESG factors into account.

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Consumer Preferences

While on a consumer level, demand for sustainable products is rising, the other aspect is making products that are competitively priced. Unless someone has an absolute disdain for Colgate-Palmolive, they might not be willing to pay the additional cost for a more sustainable toothpaste. A credible business model for companies involved in catering to the public at large should seek to avoid creating marketing strategy that is only relevant for niche sectors of society. 

To truly build both consumer credibility in the next few years, investors will be looking to financial performance, yes, but also to how effectively companies build logistics and services that lead to end user products, for the wider global market, that are examples of corporate social responsibility as well as price-based access. Sustainability should be the future 'norm', not a limited privilege for wealthier consumers. 

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Regulatory Environment

While sweeping regulations from around the world are making companies think more sustainable, actually being sustainable has more scrutiny attached to it. Like B-certified companies, the standard for that certification is high, and compliance standards are always a work in progress. Companies looking to be sustainable not only have to work on being sustainable but also know what sustainability looks like on a day-to-day basis.

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Short-Term Focus vs. Long-Term Sustainability

True sustainability is a tricky thing, and we’re seeing in recent years that companies are working more on the short term. A lot of the pledges and goals that are being made are within this decade or by 2030. And while those are good, companies do need to be thinking about the bigger picture and being able to keep up with the sustainability practices they are implementing right now.

For sure, when looking to be sustainable, it’s better to focus on the small victories and changes that can be made to current business practices. But a business needs to know how that can feed into the bigger picture and really make an impact on making sustainable practices stick.

Lack of Awareness and Education

Employees and the general public aren’t all that familiar with ESG as a concept. This is especially true if you’re operating in America or Canada at this point. It’s not that people don’t care; rather, not everyone understands how important all of this is. Asking people to understand this while also integrating it into jobs effectively can create a lot of confusion too.

It’s why there are a lot of sustainability jobs, but not enough people to bridge professional and sustainability skills together to fill those roles.

To find in-person and online ESG educational opportunities that fit your needs, check out our ESG Courses.

Measuring And Reporting Impact

On a broad level, we understand what sustainability is and what it can look like. But getting down to specific numbers and reporting on them is a whole other challenge. Companies are going to struggle to measure or find appropriate metrics and standards that not only meet government regulations but also provide information to the public and shareholders.

Tech Limitations

Depending on how ambitious your sustainability goals are, you might not be able to hit the targets with existing technology. Technology is continuously growing and evolving, but with each iteration, there is a limitation to what companies can access and even use to complete certain initiatives. For example, green ammonia is a viable energy source, yet most businesses will have zero understanding of how this, or even more conventional and readily available renewable energy sources can impact their operations, supply chains, or finished products. 

Competing Priorities

The problem with having many business goals is that they compete with one another and can get in the way. For firms, they inherently have many goals and objectives they wish to accomplish. Generating profit, being able to pay dividends, expanding the company, and remaining competitive in the market. Adding sustainability into the mix, which has so many other objectives a business has to prioritise, may cause a company to spread itself too thin to meet every single goal in every quarter or year.

So if larger corporations are struggling as well, it’s going to be a more significant problem for a much smaller business, which will have limited resources to focus its efforts on.

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Collaboration And Stakeholder Engagement

While collaboration is a good thing, drumming up interest in the first place is more of the challenge here. Not only that, but any time a sustainable business is collaborating on something, they may need to involve people from all different kinds of backgrounds.

From government partners to NGOs, suppliers, customer groups, local communities, and more, collaboration requires alignment on what’s being done. And that gets much harder the more people are involved, each with their own different goals and opinions.

Many Challenges But High Rewards

But despite all the challenges that a business will face, many companies recognise how important all of this is. Sustainability for business means that the short-term struggles outweigh the long-term success and survivability of the company. Through sustainability as a core value, a business is able to make a positive impact on the environment and social well-being while significantly enhancing their brand in the process. 

Beyond that, the bottom line is a significant competitive edge that comes with it when a business does sustainability right. It will understand when this is achieved if it listens to the voices of not just those with shareholder rights, but of all stakeholders. 

For more ESG opinion, follow our Featured Articles. To see how companies are really doing via ESG ratings and reports, search and compare at our extensive Company ESG Profile listing.


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