In the recent past, there is a particular trend that has been identified, concerning environmental and social management and how it influences or can be integrated better with economic business goals. It is noted that the relationship that currently exists between economic performance and environmental performance has grown to be more prominent than it was in the last decade. However, scholars are keen to note that only partial aspects of the relationship between these two aspects have been explored both from an empirical and theoretical perspective. Regardless, there is enough information floating around to ascertain whether environmental sustainability is, indeed, a viable business strategy for improving economic performance or not.
To determine whether there is a direct relationship between environmental sustainability and its impact on the improvement of economic performance, scholars have laid down some basic facts and assumptions, some of which are backed by previous studies and some which are not. The first fact points out the dwindling natural resources that are prompting corporations to embrace sustainability in their practices. They have pointed out the dwindling supply of raw materials, and even other more trivial resources such as land. It is evident that natural resources are dwindling in supply and the future of corporations would be greatly dependent on how environmentally sustainable they are going forward. Another assumption made is that close to all corporations regardless of the industry in which they are, are dependent on the environment in one way or the other to improve their economic performance. It is also assumed that any given corporation’s activities, regardless of the industry, have an adverse impact on the environment. All these are assumptions and facts that push organizations to embrace environmental sustainability in order to improve their economic performance and achieve their economic objectives as time progresses.
Charles Jr, Schmidheiny and Watts (2017) floated the argument that most enterprises speak of environmental sustainability but hardly get to practice it. In their publication Walk the Talk: The Business Case for Sustainable Development, these three scholars argued that it is the application of sustainable environmental practices that would guarantee the growth and improved performance of organizations. The simple act of mentioning sustainability while failing to implement the different aspects that are associated with that brings forth no positive outcomes for corporations. The goal, they reiterated, is to improve economic performance, and given where and how the world is progressing, it would be imperative that organizations center their activities along environmental sustainability to not only ensure that they remain relevant as time progresses, but also competitive among their peers.
Charles Jr, Schmidheiny and Watts’ (2017) arguments were seconded by Schaltegger and Wagner (2017), both of whom emphasized on the implementation of sustainability practices and not just mentioning them in passing. It is the act of pushing for the implementation of environmental sustainability practices that yields impressive economic results as opposed to just the mention of it. Schaltegger and Wagner (2017) would then lay down the various benefits of implementing environmental sustainability for the goal of realizing improved social, environmental and economic performance. For one, they cited the reduced compliance costs that organizations would be faced with through the use and implementation of sustainableeconomicpractices. To back this they pointed out that in Kansas City, Philadelphia and other areas in the United States, the use of green infrastructure combined with sanitary and storm-sewer overflows have saved the cities hundreds of millions of dollars, both in running costs and in compliance costs.
Laying down this infrastructure and embracing sustainable environmental practices would allow businesses to realize reduced overheads going forward, meaning that they will make more margins from the sales of their products and services, allowing for overall economic growth as time progresses. Other benefits that Schaltegger and Wagner (2017) pointed out included greater environmental and public health benefits, the availability of room for innovation as time progresses, the provision to adopt new social impact models, having an improved brand image, increased productivity and the overall reduction of waste.
The benefits of adopting sustainability practices are echoed by Clinton and Whisnant (2019) who also offer business model innovations that organizations can utilize to realize suitable environmental sustainability that would have a subsequent positive impact on their economic performance as well. Their study was mainly focused on business model innovations that could shape business operations in the future. It is noted that these innovations took into consideration the fact that environmental sustainability practices for enterprises would be essential in the coming years, something that would render current business models obsolete and ineffective. In their publication, they argued that for any business to be competitive in the future, regardless of the industry in which it is part of, it would need to adopt innovative, more efficient and effective business models. It is only by doing so that future challenges would be addressed properly while ensuring that these businesses not only maintain the levels of sustainability that are required but also achieve the level of economic performance that they desire.
Laszlo and Zhexembayeva (2017) brought forth the concept of embedded sustainability. They defined this as the incorporation of health, environmental and social value into the core of an enterprise without making any trade-offs in price or quality. Their focus Laszlo and Zhexembayeva’s (2017) focus was on the significance of this incorporation, along with the impact that it would have on the company’s overall performance. They took a unique approach of evaluating as many businesses in as many different industries as possible, and this allowed them to come to the conclusion that although taking on sustainability measures from the get-go would be a bit costly for these enterprises, in the long run, it would play an integral role in the improvement of their economic performance and competitiveness in the industry.
Noe et al. (2017) took a slightly different approach- focusing on human resources, its management and its influence on environmental sustainability. These scholars argued that there is a direct link between human resources, how they are utilized and their impact on environmental sustainability. While Noe et al. (2017) also touched on how human resource management can allow an organization to gain a competitive advantage over its peers, they also discussed how it can influence the environmental sustainability of an organization. Some of the aspects touched on included the carbon footprint of the organization’s human resources, the different approaches that it embraced in the delivery of products and services, along with the avenues that can be explored to ensure that an organization is not only environmentally sustainable but also one that performs well economically.
Upward and Jones (2016) reiterated Noe et al. (2017) findings, while also focusing on the various enterprise framework models that are guaranteed to make organizations environmentally sustainable and excellent performers economically. Once again, they Upward and Jones (2016) touched on the role that business models play in environmental sustainability and its impact on the improvement of economic performance, pointing out their significance when it comes to how a business would function sustainably while also maintaining its competitiveness. Charter (2017) introduced this same concept in the form of a green business approach- an environmentally responsible approach towards doing business. What all these scholars so far were stressing on was the dwindling supply of natural resources which is prompting businesses and entrepreneurs to embrace more sustainable methods of doing business as time progresses.
The main aspect that was focused on by scholars whose work was utilized in this research included how enterprises can reduce their energy costs, something that would allow them to avoid or reduce the growing energy expenses, the reduction of their carbon footprint in terms of energy consumption and manufacturing practices, along with the benefits that come with such approaches. Welford (2016) discussed the various tax rebates that organizations would enjoy should they choose to go with environmentally sustainable business practices. Epstein (2018), on the other hand, talked of the social impact that these practices would have, in addition to improving the organization’s brand image, which could play a tremendous role in its growth as time progresses. Epstein (2018) argued that the adoption of environmentally sustainable practices would not just have a positive economic impact on the organization, but would have a social impact as well, which is integral to the company’s growth.
The benefits associated with the adoption of environmental sustainability within an organization are long-term according to Ortiz‐de‐Mandojana and Bansal (2016). These two scholars point out that while it might be difficult to transition to more sustainable practices that do not drain the environment that much, the benefits that organizations are bound to reap from this investment are massive. Doppelt (2017) echoed these remarks, pointing out that organizations or enterprises that are bound to be market leaders in the future are those that would have led the change towards sustainability. Corporate environmental management can be daunting according to Schaltegger, Burrit, and Petersen (2017), but it is an essential aspect in the 21st century, especially factoring in the push towards environmental sustainability.
Oritz-de-Mandojana and Bansal (2016) offered some insights into the resilience that is demanded from organizations as they make a move towards sustainable business practices. These two scholars affirmed the notion that it is never easy to make the transition, especially for large corporations that have already established their structures and altering them has the potential to adversely affect their overall service delivery. Oritz-de-Mandojana and Bansal (2016), however, note that although there are challenges associated with the move, the benefits associated with it are long-term. They also reiterate that the future market leaders will be organizations that embraced sustainable environmental practices. These are enterprises that will realize the economic benefits that are associated with these sustainable practices. Oritz-de-Mandojana and Bansal (2016) pointed out that there is a direct link between environmental sustainability and the viability of a business strategy in improving economic performance. Enterprises that perfect environmental sustainability are bound to achieve economic growth, which is almost guaranteed.
All the scholars utilized in this study affirm that there is, indeed, a relationship between environmental sustainability and the improvement of an organization’s economic performance. The future belongs to enterprises that embrace and implement the various approaches associated with environmental sustainability. Those that are setting up the necessary systems and infrastructure are setting themselves up for success. The scholars point out that it may not be easy for established corporations to make the transition, but they argue that it is mandatory if at all these organizations intend to stay relevant and competitive in the industry. Currently and going forward, environmentally sustainable practices play a big role in the improvement of economic performance within organizations. Entrepreneurs and organizations that master this will have mastered the key to growth.