The growing importance of sustainability for international business

The importance of sustainability in business

Our online part-time MSc in International Business and Management incorporates study of the impact of ethical and sustainable business practices on businesses and society.

Our latest blog therefore looks at the interdependency between sustainability and international business and why the future success of both relies on each other.

What is sustainable development?

Sustaining living conditions to meet essential needs, such as food and water, is a natural survival instinct. As such, the concept of sustainability dates back six million years or so, for as long as humans have existed.

The actual term itself is much younger: according to the World Energy Foundation, the German word ‘Nachhaltigkeit’, meaning ‘sustained yield’, first appeared in a handbook of forestry published 400 years ago, recommending forests should never be harvested more than they can regenerate.

In Great Britain, modern corporate responsibility took hold during the industrial revolution in the 19th century. In 1853, for example, Sir Titus Salt opened a new mill with a model village for his workers at Saltaire, now a World Heritage Site, while in the 1890s, William Hesketh Lever, founder of Lever Brothers, invented a revolutionary new product – Sunlight Soap – to make cleanliness and hygiene available to the masses.

The concept of sustainability as we know it evolved from the 1972 United Nations (UN) Conference on the Human Environment or ‘Stockholm Conference’, the UN’s first major conference dedicated to international environmental issues.

In 1987, the Brundtland Commission defined sustainable development as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs”.

Then, in 2015, every member state signed up to the United Nations (UN) 2030 Agenda for Sustainable Development to transform the world for the better.

Prosperity through partnership

A plan of action for people, planet and prosperity, the Agenda’s 17 Sustainable Development Goals (SDGs) seek to end poverty and other depravations, improve health and education, reduce inequality, tackle climate change, protect the environment and build a fairer, more resilient global economy.

Partnership and the cooperation – of all countries, stakeholders and people – lie at its heart.

Businesses, as major sources of employment, innovation, R&D, manufacturing, production and wealth generation, clearly have a critical role to play across all SDGs, especially the goal “to ensure that all human beings can enjoy prosperous and fulfilling lives and that economic, social and technological progress occurs in harmony with nature”.

This not only includes developing the new knowledge, technology, people, practices and processes required to tackle depravation, improve prosperity, reduce inequality and protect the external environment.

Businesses are also required to minimise their own environmental footprint and promote gender equality, good health and wellbeing within the workplace and business practices.

Expectations of corporate social responsibility are growing, not least from members of the public as customers, shareholder, suppliers and partners.

Capgemini research conducted in 2020 with 7,500 consumers and 750 large organisations found consumer preferences to be strongly impacted by sustainability:

• 64% of consumers say buying sustainable products makes them feel happy when shopping.

• 52% feel an emotional connection with a product or organisation which is sustainable.

• 79% are changing purchase preference based on the social or environmental impact of their purchase.

• 53% switched to lesser known brand(s)/organisation(s) whose products/services they perceive as sustainable.

There is also greater transparency and accountability though sources of governance, investment, funding and contracts, government in particular.

McKinsey suggests that the financial performance of companies directly corresponds to how well they contend with environmental, social, governance (ESG). Investors now question a company’s carbon footprint, water usage, community development efforts, and board diversity.

Most of today’s commercial contracts contain some form of sustainability provision. In the UK, Government Buying Standards (GBS) stipulate the need for sustainable procurement of goods and services.

The demand is worldwide, evidenced by the 2017 launch of ISO 20400, the world’s first International Standard for sustainable procurement, to help organisations develop and implement sustainable purchasing practices and policies.

We’re on board, why not join us?

Sustainability, business and enterprise is a research priority for us here at the University of Central Lancashire. We aim to drive business growth, champion enterprise and promote sustainability to support the needs of business, the economy and the wider society.

Collaborative research is underway on human wellbeing, gender equality, sustainable cities and communities, production and consumption, risk management and business development.

Our online MSc in International Business and Management offers you the opportunity to join us in support of these goals.

You’ll develop valuable skills and knowledge to navigate the international business landscape through the lens of sustainable business and management, giving you insight into the challenges and opportunities this presents: