If you want that your company lasts over time, you should take care first of all of its economic sustainability.
Whether you have a medium or a large enterprise, or you are a small business, even with just one employee, the parameters to be considered, in order to ensure prosperity to your company, are the same and some of them may be a novelty or a surprise for you.
According to “The Sustainability Manifesto for Projects”:
“Economic sustainability is long-term thinking in economic decisions to support the mission of the organization.
It is efficiently applying your available resources, and raising efficiency, and often effectiveness, over time, … It is increasing the economic well-being of the community and of society.
It is the transparent and optimal use of resources, able to generate growth without compromising the ability to produce in the future. It is about benefits in the long-term. It is about creating value through the supply chain and creating the conditions for a continuous stream of revenue without neglecting the other dimensions of sustainability”.
This may seem a paradox, but, to ensure economic sustainability to your company, you should also consider some aspects that are not exactly economic.
The usual parameters taken into account in a corporate economic balance concern for instance: physical assets, depreciation, earmarking, liabilities, revenues, expenses, personnel, office, communications, services, contractors, consultants, furniture and furnishings, tax and financial expenses, sponsorship, cost of travel and accommodation, training and retraining of personnel, equipment, software, maintenance, cleaning, utilities (electricity , telephone, and the like), publications, rentals, leases, supplies, subscriptions, insurance, entertainment expenses, advertising and marketing, intellectual property, patents, trademarks, and so on.
Global sustainability adds other parameters to the above economic parameters, such as:
- Efficient use of all resources that are used;
- Support to the local economy;
- Equitable distribution of revenues;
- Widespread economic well-being.
A company can boost the local economy, using local suppliers and personnel. It can contribute to a fairer distribution of the profits, improving the global, that is environmental, social and economic, conditions of all stakeholders, and not just of a few in particular. It can do so either directly, through its own activities, or indirectly, financing infrastructures or services for the community. It can contribute to the economic well-being of society through a positive impact on local, regional and global economic systems. It can avoid the strain of its resources, being them material, economic or human. It can safeguard its material, human and economic capital.
In this way, it is possible to follow and to address the economic activity of a company as a whole and in its sustainability aspects, including the social and the environmental ones. They come to light, for example, risks and opportunities related to climate change; think about in recent years how many entrepreneurs have seen their businesses seriously damaged by flooding, overflowing, and inundation. Economic impacts on society are highlighted, together with the contribution to the sustainability of the systems, in which the company operates. An enterprise can flourish and is in a lasting economic dynamic balance only if so are the contexts around it. An entrepreneur can act in an economically sustainable manner both inside and outside his or her company to his or her own advantage and benefit.
Revenues and good corporate reputation can be increased by investing in particular on the following factors:
- Active and proactive involvement of all stakeholders;
- Selection of suppliers weighted and based on multiple analysis criteria;
- Empowerment and nourishment of human resources.
Stakeholders, who are of little economic weight but who are influential in the environmental or social field, could contribute with ideas and suggestions supporting the business growth. A careful choice of suppliers, not only more cost effective but more aligned with the strategy and with the global objectives of the company, could enhance its reputation and create unexpected synergies. Harmonious, united and creative human resources can bring new blood, new ideas, new solutions and new projects to be developed.
Many people think to start the introduction of sustainability beginning from the environmental side. It is not entirely wrong, but it is also not entirely correct. It would be preferable to start from the economic aspect to assure durability to their own company and to ensure a continuous flow of revenues, without which the company would cease to exist. Social and environmental aspects would anyway be developed as a consequence and at the same time, being them interconnected.
Only a holistic, that is comprehensive and not just economic, approach allows an entrepreneur to turn his or her eyes towards the future.
If you compare your company to a plant, you could also grow it in a desert, if you water and fertilize it, but if you want it to lushly develop, you have to build a garden growing around it.
Paola Morgese, PMP
Civil Hydraulic Engineer
M.S. Sanitary and Environmental Engineering
Translation of the Italian blog post: Paola Morgese, La sostenibilità economica aziendale