Climate change. Air pollution. Sea level rise. Increasing human activities is gradually encroaching our planet. Business activities are considered to be one of the most major and influential activities that affect our daily lives and the environment we lived in. From the automobile industry to the high fashion industry, the world has become a mess.
With this regard, it’s extremely crucial to regulate, supervise, and collaborate with businesses for a more sustainable future. Moreover, it is important for the businesses to step out of old habits and start securing the future too.
In this section, we will help businesses find light in improving their business models. Below are three different kinds of tools and third-party research institutions and stakeholders involved in promoting more sustainability and supervising the business activities
1. Global Reporting Initiative (GRI)
Global Reporting Initiative (GRI) is a standard organization headquartered in Amsterdam that established to help businesses and governments in the world to understand and communicate their impact on the critical sustainability issues from three perspectives: environment, governance, and social well-being. GRI Sustainability Reporting Standards (GRI Standards) are the first widely adopted international order nowadays by most of the top companies in the world. Currently, 93% of the top 250 companies are reporting their sustainability performance on GRI standards according to a survey from KPMG in 2017.
2. MSCI ESG Rating
MSCI Inc. is a global provider and investment research institution in New York for multi-asset portfolio analysis tools including different indexes like MSCI BRIC and MSCI World to evaluate the risks and financial performance for investors. One of the indexes MSCI developed is known as MSCI ESG Ratings. It’s a new methodology that could help investors and stakeholders to find information about companies’ resilience to relevant Environmental, Societal, and Governance (ESG) Risks. MSCI will distinguish companies from AAA to CCC based on their methodologies compared to the other peers in the industry. 37 ESG issues MSCI focused on in evaluation including pollution & waste, climate change, product liability, labor rights, and corporate behavior.
3. LEED-certified buildings
Leadership in Energy and Environmental Design (LEED) is one of the most popular green building certification programs used worldwide as well as a sustainability scorecard for green building. The program was initiated by a non-profit organization in the United States to help design, operate, construct and maintain a green neighborhood. Under the rating systems of LEED, the program really aims to create a more environmentally responsible and energy-efficient buildings in the world.
How does businesses in the world took the lead in this shift?
Numerous companies in the world are practicing sustainability in their ways. It’s hard to conclude all different kinds of examples in one short article, consequently, we select three companies at different scales and in a different industry to review what they have achieved so far in sustainability.
Eileen Fisher is a women fashion company started in the last century. Throughout the years, Eileen Fisher has harvested a group of loyalists for not only the design but also the culture to become sustainable in this industry.
Firstly, Eileen Fisher works on a clothing recycling program to reduce waste as well as increase the reuse of clothes. There are measures taken followed by every step in the business, for instance, it took actions to ensure the energy is being used efficiently during the operations of the company. Most importantly, the company emphasized the selection and use of garments and materials. In accordance with the “One Design Culture”, the fibers used for Eileen Fisher are organic, mainly organic linen and organic cotton. The idea of this is to provide health benefits and comfortable clothes for consumers to avoid exposure to potential pesticides.
In the next phase of the business, fibers like polyester or cotton are encouraged to be recycled and manufactured into new clothing. On the other hand, the recycling program is associated with the “Green Eileen” initiative to promote the empowerment of women business and disenfranchised female in society.
Starbucks published the “Global Social Impact Report” every year starting in 2001. In reviewing the recent two years’ report, Starbucks focused on following environmental issues: reduce plastic usage in packaging and cups, support renewable energy usage in stores, and provide sustainable agriculture products.
Specifically, Starbucks listed out the number of stores that achieved using green power, the data for reduced plastic straws and descriptions of other programs that invested in sustainability. Moreover, the goal for each sector by 2020 is also presented in the report. Second, Starbucks revealed its environmental impacts on its website for climate change.
For its strategy, Starbucks not only worked on building more LEED-certified stores but also collaborated with international organizations and companies like Conservation International to comply with climate-smart agricultural practices in buying coffee globally.
Additionally, Starbucks conducts an annual inventory of GHG emissions under the WBCSD Greenhouse Gas Protocol. It also contributes to the UN sustainable development goals in providing data and brochures of what programs initiated by Starbucks aligned with SDG. The partnership between Starbucks and the UN could be found on both of the websites with detailed descriptions and data for each program.
TNT (now acquired by FedEx)
TNT is an international delivery services company that flourished in the 20th century in Europe. In 2015, FedEx acquired TNT as a subsidiary of the company.
Moving the World and Planet Me are two corporate social responsibility programs initiated and led by TNT CEO Peter Bakker in 2001 and 2007. The former is aimed at reducing child hunger by partnering with the World Food Programme (WFP). The latter is focused on reducing CO2 emissions.
For Moving the World, TNT assisted WFP in various fields including knowledge transfer, Hands-On Support, and Fundraising regarding its transportation system, logistics training, and emergency response.
For Planet Me, three core components of the program emphasized transparent reports on CO2 emissions, reducing CO2 emissions at every level of business activities, optimizing supply chain and green investment.
For the current status, Moving the World is a mature and well-known program that exerts influences in the hunger relief and industry expertise, while Planet Me may still at a mid-career stage, needing additional adaptations.
It’s not difficult to tell that the three companies are still working very hard to achieve a balance in practicing sustainability and earning money just like other companies in the world.
An old saying once told us “With great power comes great responsibility”, which best summarizes the importance of propelling top companies to realize the urgency of doing business sustainably.
However, it’s a collective work that needs every stakeholder in the society to engage in from international organizations, government to local communities. After all, we want to avoid accidents like the BP Oil Spill in the Gulf of Mexico or the 2013 Dhaka garment factory collapse in Bangladesh or the destruction of the world altogether.
One thing that we can be sure of is that making money will not become the only goal for a socially responsible company starting now. Learning how to practice sustainability and to create value for the whole society should be a top priority.