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Why corporations must focus on sustainability

Posted on December 20, 2016 by Teresa Mackin

By: Reggie Horne, IU Kelley School of Business Indianapolis associate faculty in management, Frito Lay Traffic Network Manager

Corporate sustainability is a long term strategy to protect the natural environment while accounting for every dimension of business operations including social, cultural and economic factors. Some consumers might view corporate sustainability efforts as “nice.” But I would argue the vision for corporate sustainability is a global strategic imperative.

During the past half-century, our planet has changed at an astonishing rate. Global population has more than doubled. The need for food, water and fuel has increased significantly. Humanity has been challenged with changing climate patterns, diminishing freshwater resources and deteriorating air quality.

These problems will certainly worsen unless global sustainability initiatives are strategically implemented.

In the midst of this crisis is innovation.

I believe that globally-responsible companies will gain a competitive advantage by becoming part of the solution. Governments around the world are partnering with businesses to change environmental regulations. These governments will levy heavy fines on non-compliant organizations. In addition, leaders will also establish environmental gate keepers to help award government business contracts.

Several sustainability initiatives in the United States are realized through NetZero efforts. NetZero is a commitment to minimize the manufacturing environmental footprint, focusing on energy, water and waste. Corporations try to reduce, re-purpose, recycle, recover then dispose.

The US Army is addressing energy security and sustainability as an operational necessity.

According to the US Army’s website, the goal is to manage our installations on a basis of net zero energy, water and waste. We are creating a culture that recognizes the value of sustainability measured not just in terms of financial benefits, but benefits to maintaining mission capability, quality of life, relationships with local communities and the preservation of options for the Army’s future.

In 2014, PepsiCo’s CEO, Indra Nooyi, invited stakeholders to see how the company was achieving progress through sustainable agricultural practices, innovative methods of water conservation, more nutritious product offerings and more diverse workplaces.

She told them, “These efforts don’t come at the expense of profit. Rather, they are examples of just some of the work underway that we are confident will help fuel our profits for generations to come.”

Corporate sustainability can reduce energy and waste expenses as well as reduce materials and water expenses. Furthermore, innovation focused in this area will enable businesses to achieve a global competitive advantage as humanity continues to grapple with meeting the basic needs of a growing population.

Filed under: FacultyTagged Reggie Horne, sustainability

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