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All businesses can be sustainable businesses. You don’t have to be a cleantech or greentech company to be considered a sustainable company. 

Teck, one of Canada’s leading mining companies, uses sustainability as a guiding principle. Teck reports sourcing 94% of its electricity from renewable energy, spending $345 million on transactions with Indigenous suppliers, and investing $24.9 million into local communities. 

The Canadian National Railway has also stood out with its rapid progress towards their 2030 sustainability targets. The company has reached 40% progress in reducing Scope 3 GHG emissions intensity for fuel-and-energy-related activities, diverting approximately 94% of its waste from landfills, and planting 114,000 trees – a 77% progress towards its 2030 target.

We are living in a time where the benefits of sustainability outweigh the costs, and businesses can indeed be both sustainable and profitable.

In this article, we delve deep into:

What Does Sustainability in Business Mean

In business, sustainability means operating without harming the environment, community, or society as a whole. 

A business without a sustainable business strategy can directly be responsible for inequality, social injustice, or degradation of the environment to an extent that compromises the ability of future generations to meet their own needs. 

Today, subsets like Environmental, social and governance (ESG) are becoming more popular in business, because sustainability can often be a very broad principle. ESG is an accepted set of guidelines that directs companies to operate responsibly, deliver sustainable outcomes, and provide meaningful benefits to a broad range of stakeholders.

Source: PwC

Why Sustainability Should be a Priority for Startups

It goes without saying that startups who follow sustainable business strategies can help reduce some of the world’s most dire problems including climate change, income inequality, depletion of natural resources, human rights issues, fair working conditions, pollution, racial injustice, and gender inequality. 

It has also been observed that businesses which prioritize sustainability are witnessing better overall growth and improved bottom lines.

Source: McKinsey

Consumer preferences are one of the primary drivers of brand improvement, as a recent study by NielsenIQ found that 78% of consumers say that a sustainable lifestyle is important to them. 

Research by Deutsche Bank, analyzing 56 academic studies, also revealed that companies with high ratings for ESG factors face lower costs for debt and equity. 

About 89% of the reviewed studies show high ESG-rated companies exceeding market performance in the medium (3-5 years) and long term (5-10 years). Similarly, the Carbon Disclosure Project reports companies selected for their greenhouse gas (GHG) emissions disclosure and performance, also showed superior stock-market returns

However, this raises a question: if the advantages of sustainability are so substantive, why aren’t more organizations prominently highlighting their impact?

How to Go From Strategy to Execution With Sustainability

Although sustainability is a hot topic in conferences and boardrooms, there exists a significant discrepancy between talk and implementation.

A study by IBM states that:

These discrepancies have also not been favourably received by investors.

In PwC’s Global Investor Survey 2022, investors expressed that even though ESG outcomes like effective corporate governance, and reducing greenhouse gas emissions, have a solid place in the top 5 investor priorities in a business, they are well aware of the laggard implementation. 

They specifically mention how the use of ‘sustainability’ versus actual indicators or descriptors, or fluff in corporate ESG dialogue has led to a massive trust deficit. Almost 87% of surveyed investors believed  that companies’ reports on sustainability performance contained unsupported claims and greenwashing.

So, what can you do differently as an incumbent creating a sustainability strategy?

Here are Some Guidelines to Help Establish a Strong Foundation for Your Sustainability Business Strategy:

1. Define your sustainability goals and KPIs:

Clearly articulate your purpose for pursuing sustainability goals before you get started on your journey. Ensure your goals, best expressed in the form of a mission, vision and values, are rooted in clarity. Spend time deeply understanding which sustainability goals best suit your business and sector, and what it would take to get there. 

For instance, if you’re a mining business, you may want to pursue net zero, however, if you’re a software company you may want to prioritize energy consumption and DEI goals, and if you’re a manufacturing company zero waste might be most beneficial. Streamline your goal or combination of goals based on what is most relevant to your context.
As a startup founder, you may or may not be the right person to outline these goals. Reach out to professionals or agencies that can help. Companies like Junxion help make the triple bottom line a reality for brands, or you can even choose to go industry-specific like Audette which is helping real estate companies turn net zero. You can take it a step further and carry out materiality assessments with larger consultants like KPMG, Deloitte, and BCG.

2. Set up your sustainability framework:

After your goals are aligned, it’s time to establish a sustainability framework. This framework decides the sustainability standard you are choosing to follow and defines your record-keeping system. There are many globally accepted sustainability frameworks, you can choose based on what suits your business best:

Although GRI is the most commonly used framework globally, in Canada, the SASB standard is the leading reporting standard with 72% of N100 companies using it. 

Developing a baseline after selecting a reporting standard requires determining and collecting necessary data from assets, facilities, supply chains, and IT infrastructure.

The good news is there’s no need to devise an ESG tech system from the ground up. Many turnkey tech platforms exist that can effortlessly be integrated into your business operations. Canadian ESG software companies like Figbytes and GreenWorksESG are a great solution, and they are already aligned with the above standards.

Source: Figbytes

3. Operationalize your goals:

Now, to turn this into action, connect your ESG data with your operational systems to create automated feedback loops. 

For example:

This will give you clear directions on where to improve further, and when to celebrate. Hiring a sustainability officer, or team to spearhead the undertaking will help expedite the endeavour.

4. Report ESG progress to your investors, customers, and other stakeholders:

Once you’ve ensured organizational alignment to the unified ESG system and started to monitor progress, it’s time to communicate and report your progress. Investors, regulators, and many other stakeholders are increasingly expecting transparent reporting of ESG metrics. 

Although ESG software can offer ready-to-share formats based on the standard you may have selected above, The KPMG Survey of Sustainability Reporting states there is still room for improvement in the quality of reports. In an extensive review of numerous reports they found the following patterns:

If you’d like to emerge as a leader in adopting the new wave of best practices in sustainability reporting expected from investors and regulators, here are some tips:

Sustainability Certifications for Your Company / Products

In addition to adopting a corporate sustainability standard aligned with your business needs, you can also choose to have your company or product certified. 

Corporate sustainability frameworks like GRI, SASB, and the sustainability certifications listed below are complementary in nature, and not replacements for each other. Corporate sustainability frameworks are standards that you, as a company, are choosing to follow as your accountability parameters. Whereas certifications put companies under rigorous application and audit processes to prove their parameters and reward them with a certification logo or score they can display on products or service locations. 

Certifications act as a direct validation to your end customer, of your commitment to sustainable and responsible business practices. Some certifications are as follows:

B Corp: B Corp certification is an evaluation for small and large companies that confirm a business’s high standards in social and environmental performance, public transparency, and legal accountability, covering areas from employee benefits to ethical supply chains and charitable giving.

Fairtrade: Fairtrade is designed to support the sustainable development of small producer organizations and agricultural workers around the world. They certify your supply chain, give you permission to trade on Fairtrade terms and accept you as an official Fairtrade partner.

GreenSeal: Green Seal, a founding member of the Global Ecolabelling Network, is a trusted ecolabels certification for cleaning, sanitary and facilities for care products and services.

LEED: Leadership in Energy and Environmental Design (LEED) is a globally recognized symbol of excellence in green building, helping reduce carbon emissions, conserve resources, and cut costs.

TRUE: A Total Resource Use and Efficiency (TRUE) certification helps facilities define, pursue and achieve their zero waste goals, cutting their carbon footprint and supporting public health.

UL ECOLOGO®: Ecologo-certified products and services, evaluate various criteria including materials, energy, manufacturing, and health, confirming reduced environmental and health impacts based on a product’s life cycle.

Canadian Government Incentives for Sustainable Businesses

Canada is already a leader across many aspects of sustainability:

Among the top 20 global oil producers based on ESG metrics, Canada stands tall at:

With the Canadian government setting a robust example, Canada emerges as a fertile ground for startups aiming to champion sustainability. Some government incentives available for sustainable businesses in Canada include:

  1. National Adaptation Strategy & Hydrologic Prediction and Innovation: Funds projects in priority climate data, services, and assessments; flood hazard identification and mapping; hydrologic prediction; and innovation in hydrometry
  2. Output-Based Pricing System Proceeds Fund supports clean technology projects that reduce greenhouse gas emissions to help decarbonize Canada’s industrial sectors, while returning OBPS proceeds to jurisdictions of origin. 
  3. Low Carbon Economy Fund (LCEF) supports projects to reduce Canada’s greenhouse gas (GHG) emissions, generate clean growth, build resilient communities, and create good jobs for Canadians.
  4. The National Research Council of Canada Industrial Research Assistance Program (NRC IRAP) is Canada’s leading innovation assistance program for small and medium-sized businesses.
  5. Sustainable Canadian Agricultural Partnership (Sustainable CAP) is a new $3.5-billion, 5-year agreement, between the federal, provincial and territorial governments to strengthen the competitiveness, innovation, and resiliency of the agriculture, agri‐food and agri‐based products sector. 
  6. Green Infrastructure stream supports the completion of water and wastewater infrastructure, disaster mitigation and adaptation projects, building retrofits, solid waste treatment, and the installation of electric vehicle charging stations and other refuelling stations.
  7. Sustainable Development Technology Canada is a government-funded organization that further funds innovative startups which can be future sustainability market leaders.

Want to Start a Sustainable Business in Canada?

TBDC is the bridge you’re looking for! We are Canada’s premier startup incubator. Successful companies like Ibentos and Ayottaz have graduated from our programs and scaled through North America and the world. Are you ready to do the same and make your mark? To learn more, click here

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