Sustainability, the Only Success Strategy for the Business of the Future

Sustainability is not a current trend; it is a reality that influences the business model of any responsible company by allocating financial resources. Environmental Social and Governance – ESG is no longer the prerogative of public relation, of the legal department or of the governance department, but a top priority of management, including the CFO, and an important part of the business strategy. Companies that adopt and implement the ESG concept have a lower financing cost and therefore register a higher competitiveness in their line of business.

Investors (especially younger generations) have shown, over the past few years, their interest in putting their money where their values are. According to the latest report of US SIF Foundation, investors held USD 17.1 trillion in assets chosen according to ESG criteria at the beginning of 2020, on the rise compared to USD 12 trillion only two years earlier.

To gain economic sustainability it takes a green economy. This type of economy must create renewable resources, if necessary, use non-renewable resources when the renewables are dwindling and supervise the level of emissions with a negative impact on the environment. Economic sustainability is fully related to the results on environmental protection and in the social field, which the company obtains. Ultimately, economic sustainability depends on the capacity of natural ecosystems to obtain and store sufficient amounts of energy to support human life on Earth. In the case of the company, sustainability means organization management so that it is able to provide the future generations with firm social and environmental programs. Practically, in this way, the company is encouraged to use resources responsibly. This involves not only that the company makes sure it gets profit, but also that the operation does not create environmental concerns that could be detrimental to the environmental balance. In conditions of concern to the impact of operations on the community, the company can choose raw materials that are more environmentally friendly and design a strategy to eliminate waste that does not harm it. From a financial point of view, the three parts of sustainability can be considered as environmental, social, and economic capital.

Sustainability is achieved only if the company manages to obtain economic efficiency, social equity, and environmental preservation.

The contribution of companies to a promising future must be the result of their increased favourable impact on society, and this goal can only be achieved if the companies become sustainable. To assume such challenge, increasingly more companies must integrate sustainability in their strategies and operations, but it cannot be obtained easy. With the increased pressure to enhance sustainability, more and more companies make progress to solve the problems they face.

Company’s capacity to obtain real sustainability depends on its environmental and social sensitivity. This aspect requires the involvement of senior management that goes beyond compliance and efficiency, to avoid risks and minimize costs.

The contribution of companies to building a promising future with the help of sustainability turns into reality only if it is considered a progressive future, which begins with continuous compliance, with the creation of a value chain and ends with the development of new models and platforms for future practices. To successfully complete each stage of the process of gaining sustainability, the company needs a well-developed general strategy. Therefore, sustainability must continue to be an integrated and integral goal of the whole company and a factor of strategic success, a gap in the development process and the ultimate goal of the innovation process.

Companies that choose sustainable strategies and practices will be in the position to obtain value as a result of increased revenues with the help of new goods and services, reducing costs with the help of eco-efficiency, managing operational risks and those deriving from more efficient regulations. They will also be able to transform intangible assets such as brand and reputation and develop networks for collaboration with customers, competitors, and suppliers, all these while boosting the sustainability improvement process.

Sustainability is the greatest challenge in the last century for all companies, be them state-owned or private.

Companies that will fail to adapt to this reality will lose competitiveness or disappear!