Sustainable business is also known as green business is a company which carries out their production having minimum effect on its surrounding environment, society, community and the economy.
According to me a green business has a great scope in the future which is not only protecting the environment but also earning profits from their product they are manufacturing. According to me if a company includes the principles of sustainability in its business, manufactures the product which does not harm the environment like solar panels, solar lights, provides the services that will minimize the pollution in the environment like installing solar panels, solar lights. We can say that the company has pledged to abide by sustainability principle in its business operations
Triple Bottom Line
The business which follows sustainability principles does it by managing the Triple bottom line. The triple bottom line is defined a framework of accounting which includes the three sectors: financial, social and environmental which the companies’ mange according to their current environment concern. This framework differs from traditional frameworks of the business as it considers the social and environment measures. The Triple Bottom Line dimensions are also commonly called the three Ps: planet, people, profit.
According to my research there is not a fixed method which provide the calculation of triple bottom line and neither it’s a universally accepted standard which every business has to follow but it can useful to the government as the index can be used to check the pollution by a particular company. Therefore it can be concluded that Triple bottom line is best tool to measure the pollution and should be used by every company in keeping mind with the current environmental condition. I also deduced that TBL can be considered to bring less profit than the traditional way but in the long run it is advantageous, in order to control the pollution the government will encourage public to adopt the environmental friendly products and will turn to sustainable business products thus it will be profitable in long run for these businesses.
The Six Forms of Capital used by businesses
Capital is the investment in terms of the money in any business to carry out its operations such as manufacturing, processing and delivering beside capital the company also depends on the resources like land, water, labor force and energy .Following is the six forms of capital which is used by business:
- Natural capital: the natural capital includes forms of energy like renewable resources which include solar power, hydro power, non renewable resources which include coal, favorable climate. These form of capital required to start the initial production.
- Human Capital: This form of capital includes labors work force to carry out the work.
- Manufactured Capital: This form of capital include the raw goods, materials and the machines which will contribute to the production for the company.
- Financial capital: The most important capital above all is the financial capital. All other capital like manufacture, human, social are bought and used using this capital. The financial capital includes banknotes, shares, and bonds.
- Social and relationship capital: This capital consists of teams, networks and groups of individuals who are working as a unit and sharing their intellectual capital.
- Intellectual Capital: after the finance and manufacture capital the next step is the proper utilization of theses capital therefore intellectual capital is required for this purpose. Intellectual capital includes the skills and knowledge of the employees for the production
On my analysis the above mentioned six capitals are crucial for any business setup and according to me the most important among them can be the financial capital which includes the ways of developing the finance. On the other hand, I also concluded that the financial intellectual capital is the important requirement for the company as it’s the skills and hard works of the companies’ employee which is responsible for the company success.
The six phases of business approaches to sustainability
According to my analysis the Sustainable enterprise will be the goal of every country in order to protect the environment. Therefore following are the phases through which the company can approach to sustainability:
Pre-Compliance: The pre-Compliance stage is the first stage to approach to the sustainability therefore many companies find it difficult to convert to sustainability as the result they violates laws and ignore many rules of the Sustainable enterprise resulting in degradation of environmental health. It is the risky stage as there is the high risk of being penalized by government therefore most company takes less time in this stage and quickly moves to the second stage.
Compliance: Initially the company found that it becomes difficult to abide by the rules of sustainability but as they cross the first stage it is implied that they are accustomed to the rules, the business performs the operations by obeying environmental safety regulations .It performs what it is legally bounded, and it applies the described laws well. Though the company follows the rules it is still unsustainable as they uses linear take-make-waste model which means that they don’t have a proper dumping model and dump their waste in nature.
Beyond compliance: At this stage company uses the eco-efficient tools in their business to save money and the resources like water and coal. However steps to sustainability is still compromised in some departments.
Integrated strategy: After that, the organization will be able to transform their business into sustainability principles and rebrand itself the company committed to sustainability. Instead of seeing the sustainability as the risk it sees the investment opportunities in sustainability.
The purpose and passion of the company : following by passion and promise to improve the well-being of the ecosystem and society, at Stage 5 company are committed to build a healthy world because it is the correct step according to them.
Businesses successfully engaging in sustainable business
According to my research on the net the Triple bottom line is not considered important by various companies as they think it can reduce their profits and production but there are companies who have proved that triple bottom line is possible to implement and also make profits from them. These are:
Seventh Generation: A company who has produced environmental friendly cleaning product.
DHL: A courier service who uses bicycles to deliver the products
EnviroPure systems: A company who has created a revolutionary solution which will effectively dispose the organic foods without resorting to landfills.
Bocken, N., Short, S., Rana, P., & Evans, S. (2013). A value mapping tool for sustainable business modelling. Corporate Governance, 13(5), 482-497.
Boons, F., & Lüdeke-Freund, F. (2013). Business models for sustainable innovation: state-of-the-art and steps towards a research agenda. Journal of Cleaner Production, 45, 9-19.
Boons, F., Montalvo, C., Quist, J., & Wagner, M. (2013). Sustainable innovation, business models and economic performance: an overview. Journal of Cleaner Production, 45, 1-8.
Crane, A., & Matten, D. (2016). Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press.
Robb, A. M., & Robinson, D. T. (2014). The capital structure decisions of new firms. The Review of Financial Studies, 27(1), 153-179.
Savitz, A. (2013). The triple bottom line: how today's best-run companies are achieving economic, social and environmental success-and how you can too. John Wiley & Sons.
Schaltegger, S., Lüdeke-Freund, F., & Hansen, E. G. (2012). Business cases for sustainability: the role of business model innovation for corporate sustainability. International Journal of Innovation and Sustainable Development, 6(2), 95-119.
Willard, B. (2012). The new sustainability advantage: seven business case benefits of a triple bottom line. New Society Publishers.