As Thailand cautiously reopens for business, companies that seek ways to re-emerge from the turbulence caused by the coronavirus and face future challenges may embrace sustainability as a path to resilience, growth and innovation.
At the heart of business sustainability is a recognition of the impact and interdependence of social and environmental systems (and the interactions of elements within those systems) on business operations, products and services.
Business sustainability looks at the impact of businesses on the environment and society. It is also about how natural resources and societal dynamics can affect business resilience, performance and profitability.
Sustainability experts are well-placed to understand how social or environmental factors are interconnected and can be risk multipliers to a business, even if seemingly remote in terms of industry, sector or geography. Accordingly, there are overlaps between enterprise risk management (ERM) processes and sustainability strategies.
Sustainability approaches involve identifying, monitoring, mitigating and managing risks from aspects such as geopolitical issues, demographic changes, social or political volatility, natural resource scarcity and degradation (including climate change).
In examining these social and environmental interactions and patterns, there are also business opportunities to be captured by reframing challenges into innovative or modified products or services.
Sustainability approaches today have moved beyond sporadic corporate philanthropy to become the core of operating models and business strategies. Corporate sustainability approaches have been shown to generate revenue, boost brand recognition and loyalty, develop more resilient supply chains, foster employee engagement and improve investment opportunities.
TIME TO TRANSFORM
The pandemic has underscored weaknesses in supply chains, production processes and delivery systems. However, it has also accelerated the opportunity for the transformation of products, services, processes and business models -- reshaped by the holistic perspective of sustainability.
Because many companies are now strapped for cash, they may be tempted to see sustainability as a luxury. Businesses that already have sustainability approaches embedded in their models consider this view myopic and ultimately self-defeating. For many, the "new normal" should not mean going to back to "business as usual".
The Covid-19 crisis has highlighted how consumers give preference to brands that confer specific benefits to the community. Companies have made visible gains in revenue, brand recognition and employee engagement by demonstrating they put people first, whether it is their employees, suppliers or customers.
The pandemic has also presented opportunities for governments and businesses to work closer together, both in terms of mitigating detrimental economic impacts, and in finding solutions to the crisis and its far-reaching consequences.
Some governments are putting sustainability at the centre of their recovery agendas. For example, Canada is looking to tie Covid-19 relief funding to companies that disclose their sustainability and climate impacts. The EU recently proposed the Next Generation EU recovery plan to finance a European vision for sustainable growth.
Locally, the Stock Exchange of Thailand (SET) Sustainability Investment List showcases the performance of listed companies based on environmental, social and governance (ESG) parameters.
Local businesses can benefit from a range of government and international initiatives that help them become more sustainable, in addition to legislative incentives.
The recent strides made by companies in Thailand towards business sustainability have resulted from both push and pull factors. Push factors include consumer preferences and the need for many local partners to comply with sustainability principles required by multinational companies.
Large brands have been at the forefront of sustainability, notably in the tourism sector. Intrinsic motivations to embrace sustainability include the significant reductions in costs of switching to resource- and energy-saving technologies, and the economic benefits of effective waste management.
Finally, there is also a broad spectrum of small social enterprises that have distinct social benefits as their primary purpose, which broadly serve local communities or promote conservation of natural resources.
STEPS TO FOLLOW
Businesses seeking to embed sustainability in their operations can take a range of progressively incremental steps as follows:
Sustainability as part of the mission: Making the commitment as a company, and having a vision of what sustainability means for the brand, is the first step.
Assessment: An analysis of key needs, gaps, weaknesses and risks, strengths and opportunities, key stakeholders and other factors relating to sustainability, focuses on operations and processes, and ultimately the services or products the business offers.
Embedded strategy or action plan: A cohesive, integrated and robust plan should anticipate sustainability-driven opportunities, and also address weaknesses. This is not a stand-alone strategy, but is embedded in the business plan and model.
Implementation: The action plan will outline the phasing of steps to be taken, required financial and other resources, actions and reporting mechanisms, to be integrated into the company's systems and processes. Engagement of employees and collaborators (such as suppliers) is critical.
Diverse types and scales of partnerships to deliver shared value may be considered. Communication initiatives can strengthen relationships with consumers, provide education and information on products, and improve transparency and corporate governance.
The financial and commercial benefits of sustainability come alongside demonstrable benefits to society and local communities, as well as the protection of the natural environment on which we (and future generations) depend.
Ambra Gobena is the Business Sustainability Lead with Mahanakorn Partners Group (MPG), a Bangkok-based legal, accounting and consulting company.