Sustainability has become the fast strategic issue for business almost in every sector now. In the last few years, Companies are likely to change their business strategies and redefining it in the line with the principles of sustainability. Fineman (2002) explains that this sustainability involves balancing the requirements for the environmental quality, economic development and social justice. Various multinational organizations like Nike, Wyoming Energy Company, Wal-mart and Interface are few of them who are very active in the global business sustainability. To Schaper (2005), the key components of strategic redefinition observed which relate to strong leadership, willingness to accept social values and need of stakeholders both internal and external. Today, the concept of sustainability at organization's higher level is more than only natural resources sector. According to Matthew (2010), National but phenomenal organizations such as Collins and Aikman, DuPont and Dow, The Body Shop and Aveda, REI and Timberland are few examples of those who have led the business sustainability idea beyond the level of CEO. To Rennie (2008), at international level there are many names which are considering applying the idea of business sustainability not only at the level of CEO such as Honda, Marks&Spencer and TESCO. Many of other has initiated to incorporate sustainability into core competencies of their organizations and adopting more radical approaches by taking important steps towards adapting their business and production.
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According to Swallow (2009), Sustainable Business Practice also known as Green Business and refers to such organization that does not have any negative effect on the international or regional environment, community, society, and economy. Bartels & Nelissen, (2002) explains that
Sustainable Business endeavors to gain the triple bottom line. Sustainable Businesses Practice usually requires progressive environmental and human rights policies. To Hall et al (2005) commonly, business is explained as green if it matches the four principles: it includes standards of sustainability into each of its business strategy and decisions, the products or services it supplies are environmentally friendly that replaces the requirements for non-green products or services, it is greener than conventional competition, it has employed a lasting assurance to environmental principles in its business functions and operations (Cooney, 2009). In addition, Bruch (2002) states that a Sustainable Business is an organization that has an active participation in environmentally friendly or green activities to make certain that all processes, products, and manufacturing activities sufficiently deal with contemporary environmental concerns at the same time as maintaining a profit. Moreover, O'Neill (2010) states that it is such a business that achieves the demands of the current world with no compromise in the potential of the next generations to facilitate their own needs (Anderson, 2006). To Estes (2009), Sustainable Business Practice is a process of analyzing to design such products that will make the most of the current environmental situation and the opportunities for company's products to perform with renewable resources.
According to Galvao (2008), the Brundtland Report sustainability is the name of stool stand on three legs people, planet, and profit. The practices of Sustainable business strive to put all three of them balance through the triple bottom line idea. This practice has support from the sustainable development and sustainable distribution to affect the business, environment and society (Galvao, 2008). Every person has impact on the sustainability of the market and the planet. A sustainable business practice within organization creates value for customers, investors, shareholders and the environment (Rennie, 208). There are six basic and essential characteristics defined for Sustainable Business Practice. These Sustainable Business Practice principles are very motivating:
Triple Top-Line Value Production: According to Rennie (2008), the Triple Top Line has three concurrent needs of everlasting business operations, financial benefits for the organization, natural world improvement, and social advantages for employees and members of the society; with each of these three factors identified as equal in status. Even though this is occasionally called the Triple Bottom Line and triple top line emphasizes the significance of first value rather than following the fact effects.
Nature-based Knowledge and Technology: To Rennie (2008), this principal is based on biomimicry refers the watchful emulation of natural-world mastermind in the context of increasing the food, connecting the energy, building things, doing business healing, processing information and designing our communities.
Products of Service to Products of Consumption: Rennie (2008) states that products or service are sturdy goods periodically chartered by the customer that are made of materials and can be returned to the manufacturer to re-processed into a next generation of brands when they are old and exhaustible. This kind of product is usually non-toxic to human and for environmental point of view healthy but toxic materials used are kept within a closed sphere type system and not to flee into the environment. Consumption Products are shorter lived materials made only of eco-friendly materials. They are packed up by the accumulation organisms after the product is no more useful. They are also harmless to human or environmental health. This principal demands that manufacturing is done only of these two types of products and oblige the gradual and continual decrease of products of service and their substitute along with brands of use as technological development allow.
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Solar, Wind, Geothermal and Ocean Energy: To Mathew (2010), this principal supports using sustainable energy technology such as solar, wind, ocean and geothermal. They can meet the energy needs for an indefinite period without negative impact for life on earth.
Local-based Organizations and Economies: To Rennie (2008), this ingredient is durable, good looking and healthy communities operated by local businesses and managed local non-profit organizations, together with regional corporations and shareholders serving together in a network of collaborations.
Continuous Improvement Process: Operational processes within successful organizations have provisions for stable advancements and improve as the company operates its business. The constant process of supervising, assessing, redesigning and executing is employed to recognize Triple Top Line value production with the changing conditions and emergence of new opportunities (Matthew, 2010).
Significance of Sustainability of Business Practice
Companies that strategize and execute higher levels of sustainable business practice by fulfilling environmental responsibility, and community wellbeing, the corporate governance assists to have stronger economies, and long term sustainable business prospects (Estes, 2009). As a result of extraordinary benefits of sustainability in business, the practice of sustainability is highly signified apparent across all business sectors and scales of activity from Small and Medium Enterprises to large enterprises (Bruch, 2002). Companies have experienced better performance within the company, upgraded brand value, image and competitiveness; they receive a better approach to finance and lower rate of capital, have better labor relation and improved productivity, savings cost by more useful resource employment, experiencing growth in the revenue and increased market access, succeeded to have better risk management and improved license to operate, and supporting sustainable export income and improving the country's competitive advantage (Rainey, 2006).
According to Schaper (2005), businesses are able to show the practice sustainability by gaining any of a number of globally recognized credentials. On the other hand, companies that are not able to access and afford such certification can still collect real benefits by adopting sustainable business practices. To Fineman (2000) companies that involve in sustainable business practices gain benefits that has cost savings, increased revenues, a good reputation, lower staff earnings, improved productivity and access to finance and new markets. Moreover, consumers, investors, and entrepreneurs around the world are now more aware of and concerned about the effects of globalization on workers' occupational rights, the environment, welfare of community and corporate liability to shareholders, and will require that manufacturers around the world adopt a more responsible manner. Local businesses that do not have Sustainable Business Practices can find it difficult to struggle in the global market. Some developing countries are having the benefits of sustainable business practices for themselves and for the natural environment and local communities.
Reduce Costs and Increase Productivity
To Matthew (2010), businesses are able to save money by admitting to cleaner production. In Poland, a large paper manufacturer saved up around $12 million USD over five years by fixing new devices which decreased water use by 7%, reduced water and air pollutants by 70% and 87% respectively. To Bruch (2002), effective human resource management could also cut costs and increases productivity considerably. Reasonable wages, a healthy and safe work environment, learning opportunities, and health and education benefits could all assist make a company more profitable by boosting productivity, decreasing absences and lowering costs of hiring and training of new personnel.
Hall et al (2005) states that financial support that helps local economy can lead to a good environment for labor, reliable and cheaper suppliers that ultimately increase the company's revenue. Hindustan Lever, which is a subsidiary of Unilever in India, was operating at only 50% capacity and acquiring major losses due to inappropriate supplies of milk. To compensate this, the company built an integrated program to assist farmers improves milk production. This integrated training farmers in animal husbandry, civilizing basic infrastructure and building up committees to organize local dealers. According to Cooney (2009), as a result of all these efforts, milk-supplying local communities improved from six to more than 400. With the total production equal capacity, Hindustan Lever is now Unilever's most profitable enterprise in India. For various organizations gaining a credential that shows social responsibility can produce higher revenues. To Anderson (2006), different company such as Aserradero San Martin, a Bolivian logging and wood producer, could have access to the North American market where rates are 10-15% higher, later on the company gained Forestry Stewardship Council certification.
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Estes (2009) states that there are vitally important advantages to product value and image for companies that is environmentally and socially responsible. To Matthew (2010) an improved product reputation can be helpful to have better sales; can have attractive capital and business partners, and better opportunity for recruitment and retaining employees. Different multinationals such as the Body Shop which is a UK-based skin and hair care products producer and the Swedish Furniture retailer IKEA, are famous not only as affordable and quality product suppliers but also as good corporate members who show concerned about the environment health and social welfare.
Attract and Retain Quality Labor
A competent and quality workforce is important and crucial for a business that dreams of to gain high productivity and brand quality. Mark O'Neill (2010) states that the new markets, where there is usually large space for workers but there are very few quality workers, who can attract and retain or well-qualified and committed workers; in addition, it is an important challenge. Organizations offering fair wages, benefits, healthcare and training to their workers, are now more likely to attract and recruit competent staff. To Swallow (2009), a large textile manufacturer, Grupo M, offers extra benefits for its workers like subsidized transport, day care centers, medical services for employees and their families including dental services, and training and salaries that are two times more than the country's minimum wage. The owner of the company is rather concerned about the facilities offer to workers than worried about the costs of these investments because this investment comes back to them in terms of competent and content workers and quality and loyalty of workers.
Moreover, global economy and growth in any context affect the whole world. Changes that are made in business operations and functions in the form of strategies influence the societies and environment. This impact of global economy and global growth on societies and environment signifies how important the sustainable Business Practice is in the contemporary environment.
The Impact of Global Economy on the Society
To Matthew (2010), there is immense importance of sustainable business practice because there is impact of global economy on societies around the world. It is worldwide acknowledged that international economics development is one of the key of diverse globalization. To Rainey (2006), even though it is a dynamic process, through many decisions making by business leaders are leading the global economic integration. With the growth in the population and scarcity of resources has made the business a global business for employers and employee, investors and customers. The scale of this trend is great and it is largely affecting the societies. This global change and its effects on the societies and the people is the indicator that changes that happen at international level affect the common people.
According to Schaper (2005), in the coming years, it is forecasted that as the economic in new markets pushes ahead the threshold level of $ 5,000 annual household income, there would be a hundred thousands of new consumers. Consumers consuming power in new economics will improve from $ 4 trillion to more than $9 trillion, recent the consumption of power in Western Europe. This level of economic growth will surely change the social structure, with repercussions that are both positive in terms of higher living standards and environmental pressures.
To Fineman (2000), with the population struggle to higher standard of living and government is determined to have economic growth to meet these demands, there is a growing sense that exports and trade are too much at the expense of society. Moreover, globalization has increased the social impact of business and made the economic actors at center stage. Businesses are in need to ensure that their business and social impacts are perfectly compatible and considered transparent.
The Impact of Global Growth on the Environment
Bruch (2002) explains that the environmental and eco-friendly needs a similar depth and persistently of attention that can impact the corporate growth strategies. The economic growth of the international market has envisaged the stress upon environment and access to natural resources. Thus business will be required to use raw materials and handle their manufacturing sustainably. However Swallow (2009) explains the current use of agriculture is 5% of the world's land barren by 2005. Water shortage currently affects the 20% of world's population and anticipated to be risen to 30% of the world's population in 50 countries around the world.
Organizations struggle very hard to make their existence everlasting, and the theory of sustainability in business practice incorporates ecological theory and three different approaches to it. These approaches are eco-efficiency, eco-equity, and eco-effectiveness.
According to Rainey (2006), Eco-efficiency is the combination of conventional efficiency objectives with ecological considerations, and this is illustrated as, 'the provision of competitively-priced products and services that are meant to gratify the human needs and give them quality of life, whereas gradually decreases ecological effects and resource complexity all the way through the life-cycle to a standard at least in proportion to the earth's enduring level. In simple way, it refers to consuming non-renewable products more productively.
Under eco-efficiency, financial objective still remain the most in the minds of the management, but it must be remembered that the need to follow a sustainable practices where they not interrupt the financial considerations. Hall et al (2005) stated that the waste product is a burden and a cost for a company, unless it is able to externalize them and make the society pay. For instance, a carpet manufacture that uses chemicals usually leaves over after production is legally needed to waste of these in a way that not damages the environment. However, this could be an expensive process, and the carpet manufacturer could be more profitable if he not had to waste these chemicals. To Bruch (2002), the eco-friendly approach means to form such chemicals that not harm the environment and thus ignore high waste costs, and even better, if the organization finds a way that needs no chemicals and thus ignore the costs of purchasing the chemicals.
According to Matthew (2010), Eco-equity has aim for the equal distribution of natural resources between present and future generations. In a society, single group should not consume all natural resources and deprived other from it. Similarly, one generation must not over consume a resource to the highest level point that it is unavailable for a future generation. There is limited awareness of the total stock of Earth's limited resources such as oil and water. Before implementing eco-equity as a societal objective, first it needs to know the resources available and how rapidly they are being consumed. It needs to be done in a data base for the full variety of global resources with details of existing stocks and depletion costs. Bruch (2002) explained that later after this, it needs to form methods for setting equitable distributions between and across generations. Eco-equity cannot be achieved if there is insufficient data to decide what is reasonable.
To Schaper (2005), Eco-effectiveness is the end of current practices that causes eco-friendly degradation. Nature needs to be mimicked and to be created ongoing healthy systems where the disposal products of a process are inputs to other processes. For instance, if a dead leaves of tree becomes food for insects and nutrients for the soil. Natural resources systems have had thousands of years to evolve. Fineman (2000) explains that in the beginning, disposal products may probably have remained unexploited for eons until a species evolved that is not able to use the disposal as its food. An eco-effective conversion cycle forms little waste.
There has been a growing awareness about the business requirements to handle its relationship with the large and wide society. Business leaders are largely responsible for their businesses' effects on society and the natural environment; in addition, it is beyond the legal responsibility and the liability of persons. To the business person, this practice is supposed to be something with which he is familiar with and responsibly offers the environment which is worth living along with responsible people of society. The extensive practice of the field can provide more experience to the leaders who can achieve new perspectives on how to build in their approach to sustainability and how to form creative business models according to the triple bottom line.