Sustainable business management as a forward-looking market advantage

Sustainable leadership and corporate responsibility

Nachhaltige Unternehmensführung
Glacier Teamfotos Wien Studio Matphoto34of118

Julia Widmann

Content Marketing Manager

Sustainable business management refers to the inclusion of social and ecological aspects in every area of a company's activities. In addition to the management level, sustainability- and green team members, so-called sustainability officers, often act as so-called "leaders" here. These are responsible for the introduction as well as for the maintenance of sustainable trade, which initially sounds like an additional effort, but has numerous advantages for the company.

What is sustainable business management?

Sustainable business management describes the integration of social and environmental concerns into corporate activities, both internally and in interaction with stakeholders.

Often, the concept of sustainable business management is equated with Corporate Social Responsibility (CSR), the social responsibility that companies bear. The implementation of social, economic and environmental sustainability strategies is carried out by all departments, as every economic activity of companies must be taken into account. However, the implementation usually rests on "leaders" in this area, such as corporate sustainability officers.

In order to achieve the UN Climate Goals for sustainable development, the cooperation of companies is essential. Goal eight, for example, calls for "Sustainable economic growth and decent work for all," but sustainable business must also exist beyond the countries'- and EU's borders if the scale of the climate crisis is to be contained.

Processes that fall under sustainable business management include:

  • Switching to energy-saving technologies
  • Reduction of water consumption
  • Recycling of waste materials
  • Critical evaluation of suppliers with regard to environmental and social criteria
  • Avoidance of the use of environmentally harmful chemicals
  • Ecological product design
  • etc.

Overall, the focus of sustainable business management is to work as resource-efficiently as possible despite economic interests, to identify and minimize sources of emissions, and to guarantee fair labor both internally and in the value chain.

However, sustainable business management is not a concept that is exclusively associated with altruistic environmental concerns, companies also benefit acutely from environmentally friendly measures. There are great opportunities for competitiveness, positive reputation and employee motivation.

Implementation of sustainable business management through sustainability leaders

"Leadership" plays a major role in sustainable business management. Here, however, the responsibility does not lie solely on the management level, but also on members of sustainability- and green teams, sustainability officers and all other persons who assume a pioneering position in the area of sustainability in the company. These individuals bear responsibility in the process of implementation and compliance and, above all, need the necessary expertise in the area of sustainability in order to be able to identify sources of error, potential and relevant measures and to successfully manage the sometimes complex corporate tradition.

In order to successfully master the implementation of sustainable processes in the company, six steps must be worked out in advance:

  1. materiality analysis (comparison of stakeholder demands and their impact on the economic success of the company)
  2. influence of the own company on the material issues
  3. analysis of previous measures and sources of error
  4. identification of potential further measures
  5. clear target setting
  6. implementation of target-oriented measures

Once the measures have been implemented, the onus is on the entire workforce, but potential for improvement and compliance must still be regularly monitored by sustainability officers or leaders in the field. This happens, for example, through sustainability reporting (ESG reporting).

Benefits of sustainable business management

For Glacier Co-Founder Rainhard Fuchs, sustainable business management is a matter of course that should be integrated into every company in this day and age.

"After all, we now realize that climate protection is not something that will concern us tomorrow, but today. I am convinced that leadership can only go hand in hand with sustainability.", says Rainhard. The CCO not only points out the absolute necessity of sustainable corporate leadership for the environment, but also speaks of the benefits that sustainable corporate leadership has for the companies themselves: "Studies show that sustainable companies do better business and are more successful."

The so-called sustainability image of companies plays a major role in their reputation by customers* (But beware of the greenwashing trap: sustainable appearance does not equal sustainable action). Already in 2017, the German Consumption and Media Analysis showed that only about 17% of the surveyed customers do not pay attention to sustainability at all, and the tendency towards a sustainable lifestyle is steadily increasing. Studies also show that the sustainability performance of companies has a positive direct correlation with the financial performance of their stock market returns.

And employee engagement is also increasing due to sustainable awareness in the company. Study results show that 70% of employees see sustainability as a factor for motivation and well-being in their daily work, and 15% would change their job to work for a company with a sustainability focus. 45% say they would like to work in a management position in the area of sustainability in order to get the sustainable business transformation rolling in the company or to expand it further, and thus to work as a "leader" in this area.

Climate education in the area of sustainable business management

In order to anchor sustainable business management in the DNA of a company and/or to further develop it, the persons in charge of the sustainability area must fulfill various competencies. Climate education offers these very competencies, from the introduction of sustainability strategies to constant monitoring and further development.