Why a short-term approach to business sustainability could prove fatal

Our brains are not programmed to think far ahead. Psychologists have long documented our innate short-termism and struggle to consider the long-term consequences of our actions. It’s why so many people put off saving for retirement. It’s also why it’s taken business decades to acknowledge its responsibility to the environment and society.

It’s hard to believe it’s almost ten years since Unilever launched its Sustainable Living Plan. Shortly after being appointed CEO of Unilever, Paul Polman made the bold decision to prioritise environmental and social impact, even if that meant sacrificing business growth. The perfect example of flying in the face of short-termism.

But despite the trailblazers, many business leaders are on autopilot when it comes to sustainability. So how do we override it? For me, there are three ways to course-correct.

It’s high time for business to modernise its definition of sustainability. For many it’s still synonymous with a vague intention to be ‘green’ through low effort, low impact corporate tick box initiatives. This has to change.

True sustainability is about delivering a long-term, dedicated approach to business – where social, environmental and economic value meet to create shared benefits. This means taking real accountability and appreciating that building a sustainable company (in all senses of the word) is the blueprint for success. Confining your business to an outdated definition of sustainability is not only shortsighted, it’s potentially fatal.

While external sustainability credentials might satisfy consumers on a surface-level, it’s critical to back-up claims with actions. A recent survey revealed that 81% of people feel strongly that companies should help improve the environment. It’s never been more important for businesses to truly live the values they promote.

So we agree it’s time to change behaviour and not just talk about it. But what does that look like? Leaders must hold suppliers and customers to their own sustainability standards. They should also focus on redesigning products and rewiring processes to reduce lifecycle emissions, not just waste. Ultimately though, it’s about embedding an environmental sustainability mindset.

I’m proud that Ricoh has long been at the forefront of this type of action-led sustainability. Take the Comet Circle – our circular economy model. For over 25 years, we’ve been reusing parts and recycling materials within the business and across our supplier network. More businesses need to match their internal processes to their external promises.

The United Nations set the economic agenda for the next ten years, making the Sustainable Development Goals (SDGs) strategically essential to all businesses, governments and NGOs. But of course setting targets isn’t about putting numbers down on paper, it’s about defining ambitious goals that mark an intended direction of travel. Yet business is split on the topic, quite literally. Only half of businesses have identified priority SDGs.

As our global CEO Jake Yamashita candidly declared during Climate Week last year: “Any company that doesn’t contribute to the achievement of the SDGs will be ignored by the market and will go out of business.”

So why do leaders continue to succumb to the demand for short-term results and quick-win profits? Because battling against short-term thinking isn’t easy. It might mean sacrificing profits, relinquishing shareholder trust, and voyaging into the unknown. It’s the messy middle – and, let’s face it, uncertainty businesses could do without.

But if businesses don’t take urgent action now their success might be very short-lived. Environmental sustainability is no longer a competitive differentiator, it’s essential to survival.