We often associate the word “sustainability” only with the environment. But in the business world, sustainability is firmly rooted in three axes: environmental, social, and economic. This means that business sustainability only exists when companies are profitable and contribute to the sustainable development of our society and our planet.
Obviously, all companies need to make a profit. (Even if you have an idea that can improve the lives of millions of people, it is no good if you have to go bankrupt). Without economic growth, it is impossible to go forward. The idea reinforced by business sustainability is that this growth cannot come at the expense of exploiting of people and the environment.
In the long run, disharmony is unsustainable. But that is not the only benefit of promoting sustainability in business, as it has been proven to have a multitude of advantages:
- reduces carbon footprint
- avoids material waste
- optimises costs and service expenditure
- creates a positive company image
- attracts and retains talent
- develops a more resilient business
What are the ESG criteria?
“I believe that the companies that will mark our future are those that can understand customer needs and act in an ethical and committed manner, as well as extract the best from internal teams with flexibility and innovation. ESG should guide the ethical commitment of companies in all decisions.”
— Irimar Palombo, CEO of the Brazilian Facility Management Association
ESG stands for “Environmental, Social, and Governance.”
Nowadays, ESG criteria are decisive to get funding for businesses. The aim is to promote “socially responsible investments”, in companies that have a positive impact on the community, fight inequality, and have a low ecological footprint.
These three criteria are directly related to the three pillars of business sustainability: environmental protection, social equity, and economic viability. So, let’s follow this line of thought to understand how to promote business sustainability.
Perhaps this is where Maintenance and Facility Management can have the most positive impact. Start by assessing:
- how are you using energy in buildings?
- how are you managing waste?
- what kind of products do you use for maintenance?
If you’re doing things the “old-fashioned way”, I’m sure there’s plenty of room to reduce the environmental impact of your operations. One way to reduce your company’s environmental footprint is to develop low-energy or nearly zero energy buildings that produce the energy they use.
Buildings consume 40% of energy in the European Union and are responsible for 36% of carbon emissions. Even if a complete building renovation is not possible, you can apply smart technologies to reduce energy waste and promote sustainability.
💡 Learn more about how to increase sustainability in retail and how to increase sustainability in hospitality.
Another concern, because Facility Management also deals with waste management, is to achieve “zero waste” (not producing waste) and “zero landfill” (not sending anything to landfill). This means that you need to devise strategies to reduce the amount of waste and also to continuously reuse resources.
As well as making sure there are enough recycling bins, look at your shopping list in detail. Are cleaning products eco-friendly? Are single-use materials biodegradable? Are you composting food waste? Even a simple coat hanger can be made of recycled plastic and more environmentally friendly.
Finally, don’t forget to take the circular economy into consideration when planning your asset management. When you are considering the purchase of new assets and comparing suppliers, consider the maintainability of the equipment and how you will dispose of it at the end of its life.
Favour reusable equipment, machines that are easy to repair (rather than having to be completely replaced), and raw materials that can be reused and “recirculated”. In the EU, the circular economy could contribute to a 2-4% reduction in gas emissions and save €600bn by 2030.
⚙️ See here the example of Sundeala, which has a 100% circular business model.
Another essential element for sustainability in business is the impact on the community in which you operate:
- do you have a positive impact on the local economy?
- are you involved in local projects?
- are you undermining the local ecosystem?
Social impact is measured first by the direct impact you have on the lives of your employees. Are you offering good working conditions on a day-to-day basis? Are your payments fair and equal for everyone in similar jobs? Are the hours flexible? Are there benefits for families?
It also makes sense to ask whether you are offering opportunities for learning and training. If employees don’t keep up to date, you’re unlikely to have a sustainable business that can adapt to new technology and retain employees.
Speaking of learning, it may be pertinent to offer scholarships or internships at your company to students from nearby schools. These kinds of initiatives are a win-win: on the one hand, you provide opportunities to the community; on the other, you are able to attract new talent.
But not all initiatives need to be win-win. Many companies sponsor initiatives simply because they fit with the company’s values. Lush, for example, is invested in reforestation in Peru: 40% of the plantation is not used for products, only to promote biodiversity.
Finally, remember to promote transparency. If you are transparent with your customers, it is easier to show that your business is positive for the community, especially if you have an activity with a high environmental impact, such as farming or paper production.
It is important to clear up any doubts about waste discharged into rivers or air pollution. Otherwise, your business may be seen as harmful, reducing the quality of life of those living in the area.
When we talk about ESG criteria, “Governance” assesses whether the company is managed in accordance with the interests of shareholders, including minority shareholders. Factors such as board structure, company conduct, crisis management, risk exposure, tax strategy, and, of course, supply chain management are analysed.
As Maintenance and Facility Management are often outsourced, this is the only factor where they can have a direct impact:
- do suppliers respect ESG criteria?
- how can the service level of suppliers be guaranteed?
- is supplier contracting transparent?
An ethical business, concerned with sustainability, needs to ensure that these principles apply to the entire supply chain. All suppliers should offer safe working conditions, avoid waste, and be environmentally conscious, for example. A “fair trade” for services.
When you outsource services, you also end up outsourcing your responsibilities, commitments, and reputation. Therefore, it is important to establish a Service Level Agreement (SLA) or contract that covers all the essential criteria for you.
Finally, the choice of suppliers must be absolutely transparent. Not only to avoid conflicts of interest, but also to allow executives to make the right choice: the one that combines financial performance with the remaining criteria.
There is no plan or step-by-step guide we can give you to implement sustainability. Promoting sustainability and committing to ESG criteria is something your company needs to take on and embrace as a mission. Once you have made that commitment, it becomes a process of continuous improvement.