Sustainability and Business Profitability

This assignment explores the relationship between sustainability and profitability in businesses. It examines case studies of companies like Sekem, Zhangzidao Fishery Group, and Manila Water Company, demonstrating how implementing sustainable practices can reduce costs, increase returns, and enhance overall business performance. The text also discusses strategies for extending sustainability efforts to customer processes and the importance of focusing on return on resources.

RUNNING HEAD: Profitability in Sustainability
Profitability in Sustainability

Profitability in Sustainability 1
 Egypt’s first organic farm – ‘Sekem’ was founded by Ibrahim Abouleish in Cairo in
1977. In 1990, Sekem started to produce organic cotton. Such agricultural techniques
assisted to recover arable land from Sahara along with soil absorbing carbon dioxide and
decrease in greenhouse gases.
 Such techniques helped in reducing costs with increase in return upto 30% with the
production of more elastic cotton.
 More than 1,000 companies ranging in size from $25 million to $5 billion from different
markets and industries were reviewed in 2010. From such companies, more than a dozen
“champions” located in America, Africa, Asia, etc. were recognized as their sustainable
practices were innovative and effective with above average profit margins.
 Some companies like Sekem made environmental efforts profitable by using costly
sustainable processes for lowering costs while increasing returns. Some introduced small
changes for cost saving for financing innovative technologies while some extended their
efforts to the operations of their clients and dealers.
 It was proved that sustainability provides a way for those business which face limitations
due to lack of resources and consumer’s buying power.
 Zhangzidao Fishery Group uses integrated multitrophic aquaculture for maximizing
returns through economies of scale. Zhangzidao focuses on reducing waste by utilizing
fish by-products into harvestable crops and also adopted bottom sowing which absorbs
greenhouse gases and reduces disease.
 Some companies start with making minimal alterations to their processes for the purpose
of safeguarding their utmost reserved resource which can be later on extended to other
processes.
 Manila Water Company focused on water leakage and illegal taps of its pipes and was
able to recover water equivalent to a medium sized dam.
 Shree Cement made modification in its production processes to reduce the requirement of
electricity which led to cost saving such that advanced technologies could be afforded.
Efficient generation of electricity enabled Shree Cement to sell the surplus electricity in
the open market.
 Extension of sustainability efforts to processes of customers has led to the development
of firms and increase in consumer’s purchasing power.

Profitability in Sustainability 2
 Jain Irrigation Systems, in India, outperformed other irrigation system suppliers with the
increase in returns by 40%. It trained customers regarding use of system and also helped
poor farmers in applying for government subsidies. Natura, a natural cosmetics company
creates relationship with its suppliers by working with rural communities, NGOs, etc. and
then providing education to the suppliers regarding methods to be used thereby
improving their capabilities and creating jobs.
 New Britain Palm Oil used natural substitutes to chemicals in order to increase harvest. It
also rented the fields to small farmers to lessen poverty and conflict in palm-oil-
producing countries.
 Florida Ice and Farm became water-neutral and reduced the utilization of water through
advanced technology. It has developed a scorecard for employees which also include
nonfinancial metrics. The performance of CEO and other officials is decided on the basis
of financial, social and environmental efforts.
 Nutura trains its managers to convert such socio-environmental challenges into
opportunities and provide bonus on the basis of such performance.
 As the resources are scarce, the organizations need to focus on return on resources. In
order to be competitive in the market, companies must monitor consumption of natural
resources and the return from them.

Profitability in Sustainability 3
References
Dylan Winbourn. (2017). Making Sustainability Profitable. Retrieved on October 18,
2017, from https://dylanwinbourn.com/blog/business/making-sustainability-
profitable/.
Haanaes, K., Michael, D., Jurgens, J. & Rangan, S. (2013). Making Sustainability
Profitable. Retrieved on October 18, 2017, from https://hbr.org/2013/03/making-
sustainability-profitable.
Puri, R. (2013). Why Making Your Business More Sustainable Doesn't Have To Be
Expensive Or Hard. Retrieved on October 18, 2017, from
http://www.businessinsider.in/Why-Making-Your-Business-More-Sustainable-
Doesnt-Have-To-Be-Expensive-Or-Hard/articleshow/25664365.cms.
White, D. & White, P. (2014). Sustainability Can Be Profitable, Too. Retrieved on
October 18, 2017, from https://www.entrepreneur.com/article/236067.