4 misconceptions about sustainable management

Four Misconceptions aboutSustainable Management

Sustainability covers almost all areas, but due to the many conflicting messages and different policies that seek to integrate it into enterprise management strategies; Some misconceptions have been generated about the true meaning of sustainable development, what its goals are, and how to manage it.

No one denies the important role that companies play in creating a more sustainable world, and because of the growing awareness among segments of society – along with addressing sustainability issues on a daily basis on social platforms – there must be an accurate understanding and deep awareness, especially among decision makers in various institutions; In order to achieve the basic balance between listening to its customers and formulating its policies in a sustainable manner.

In light of the above, many entrepreneurs and leading companies in various fields are not surprised that sustainability has become an essential part of the management system. Hence, in this article, we will reveal to you four common misconceptions about what it means to integrate sustainability into the business sector. Our attempt to draw a realistic picture that helps institutions adopt sustainability in their policies and management in a comprehensive and effective manner.

The first concept – sustainability is specific to the environment only

Because some media outlets have a narrow perspective in their coverage that focuses only on global environmental phenomena – many people have come to link sustainability with the natural world and the phenomena it is witnessing, such as climate change, but in reality we find that sustainability is a more comprehensive concept, and environmental sustainability is only one aspect out of three other aspects of sustainability.

Environmental sustainability focuses on conserving biodiversity, meaning protecting water, saving energy, reducing waste, increasing recycling, reducing or eliminating plastic use, using sustainable transportation, protecting plants and animals, and other goals.

Another aspect of sustainability is social sustainability, which is the aspect concerned with improving the quality of living of groups and segments of society. For example, social sustainability focuses on improving health, security, education, and fair distribution of opportunities and wealth.

Then there is economic sustainability, which ensures that financial and development systems do not stand in the way of environmental and social sustainability, and this is by finding new business models that have fair and effective resources, such as the economic system based on renewable resources, or the concept of the circular economy.

All three previous aspects of sustainability are interconnected and influence each other, and the two aspects of sustainability – economic and social – are considered a huge driving force in the sustainable management of companies.

Concept 2 – Sustainability is expensive

Sustainability management may seem like a heavy burden and an additional cost to companies, but these costs are mainly short-term. Some businesses may need to invest in a sustainability management program, or appoint staff responsible for identifying sustainable business opportunities, and there may also be indirect costs associated with reformulating and adapting business strategies.

But what many people forget – when looking at the cost of sustainability – is that sustainability is an investment with a high return in the long term. The evidence for this is that many studies have found that companies that received high performance scores in corporate governance (ESG) and environmental and social practices – enjoyed an average operating margin 3.7 times higher, compared to companies with low performance (operating margin is a measure of operating efficiency and the amount of company income from sales revenues).

In addition, insights into the impact and reputation of a particular company committed to implementing the Sustainable Development Goals (SDGs) can provide new opportunities; To expand the business of this company, and give it a competitive advantage compared to others.

The third concept – sustainability is just a phase

When it comes to consumption and its effects on the environment, awareness among consumers is increasing day after day, which necessarily leads to some segments of society demanding that many companies make their products sustainable, and that their production process and supply chain can be traced.

This awareness has created a new type of market in which competitiveness is based – mainly – on the extent of the product’s environmental friendliness, which has necessarily resulted in the innovation of new products, or at the very least, more efficient industrial methods and less harmful packaging materials.

However, consumers are not the only ones who have become more aware; Recently, we have seen many new laws come into effect in different countries, as legislators have become increasingly aware of the importance of imposing sustainability on companies and other institutions. In Egypt, for example, a new law has been issued to regulate waste management, and this is an attempt to reduce the harmful impact of various institutions.

Concept 4 – Sustainability is part of everything

Given that “sustainability” has become a buzzword, many companies are citing it as something they are implementing, as part of their strategy. However, sustainability should not be just one aspect of the strategy, but rather a foundation and starting point.

If financial information is necessary to identify risks and business opportunities, and improve the overall health of the organization – so should sustainability data shape critical business owners’ decisions; Sustainability is not a static concept, but rather an approach to thinking that is constantly changing, evolving and adapting to the needs presented in the short and long term.

In conclusion, we can only emphasize that sustainability – and the data related to it – are no less important than the financial aspects in decision-making, policy formulation, and strategy development. Because sustainability – in reality – is nothing but financial information, but in a new form. Using the Sustainable Development Goals (SDGs) – as a framework for building an institutional strategy – not only takes the objectives of this institution into account, but also includes central objectives that work to advance society more comprehensively, meet the needs of the present and preserve the rights of the future.