Sustainability issues are becoming increasingly significant to companies’ long-term business strategies. From increasing demand for resources to social inequalities to climate risk, businesses are facing more complex risks and trade-offs across their value chains.
Global economic growth, increases in population, a rising middle class and rapid urbanisation are all driving increased demand for resources including food, water, energy and land, leading to a volatile and uncertain future. Volatility of prices in energy and water, among other resources, causes uncertainty for the private sector, creating risks.
The increasing scarcity and prices of resources and consistent reliance on fossil fuels is simply not sustainable for economic and environmental bottom lines. This is an issue that industries, including aged care, must focus on.
In Australia, 902 organisations provided over 201,000 aged care places in 2017. The aged care sector will continue to grow as our population ages and by 2051, it is estimated that people aged 65 years and over will represent one quarter of the Australian population (6.8 million people). Aged care organisations must cater to this growing demographic by building more facilities ensuring adequate and appropriate residential care. Equally important, they must build and operate facilities that have minimal impact on our environment by reducing energy and water consumption and waste, and increasing the use of renewables as the main source of their power.
To incorporate and embed sustainability in their business strategies, aged care organisations must take a long-term view of managing their environmental and social risks and impacts. Strategically integrating sustainability allows them to better anticipate and understand long-term trends, the effect of resource use, and to address stakeholder expectations.
The business case for sustainability in aged care centres on two areas: operational efficiencies and enhanced brand reputation. Having a robust sustainability vision, policy, strategy and action plan can significantly reduce operating costs, eliminate waste, create energy efficiency, further engage employees, strengthen a company’s brand value and potentially open-up new opportunities.
Regardless of the size of the aged care facility, material and energy savings are typically easy to quantify and monetise. An aged care company’s reduced reliance on coal and other fossil fuels and increased reliance on renewable energy can have a positive economic impact while improving the health of our environment. Similarly, anything that eliminateswaste and uses materials more efficiently can create cost savings both in terms of purchased materials and reduced waste disposal costs.
Numerous case studies show the positive impacts of engaging employees using sustainability programs. While the reputational aspects are harder to measure and track in financial terms, metrics such as staff turnover or results from employee satisfaction surveys can help track the internal effects of a comprehensive sustainability strategy.
Putting sustainability into practice requires an engaged workforce doing the work. Synchronizing employee engagement with sustainability strategy is key to building an innovative, environmentally responsible, and socially conscious organisation. Within the aged care facility, staff including facilities, clinical and operational employees, are best placed to identify opportunities and issues. They can develop solutions and work with the other parts of the supply chain including residents, contractors, and suppliers to change behaviours to facilitate change.
There are many efforts in sustainability across aged care. However, a number of these initiatives are being rolled out in an ad-hoc manner. This includes an investment in solar, isolated efforts to reduce energy consumption and having ‘sustainability committees’ in only some parts of the business. Ad-hoc or disintegrated efforts in driving sustainability can lead to confusion, lack of engagement, lack of senior management buy-in and ultimately a lack of will to advance and embed sustainability across and within the business. Having the policy, strategy and action plans in place provides the organisation with an integrated approach to demonstrating the long-term value proposition of sustainability to all stakeholder groups.
The more the organisation proves to stakeholders that its business strategy is driven by strong sustainability strategies and policies, the lower the risks associated with that organisation. In contrast, weak environmental, social, and governance (ESG) performance can negatively impact the organisation’s reputation, which can be costly.
Whether managing risk, developing sustainable technologies or solutions, or identifying ways to finance sustainability, the private sector can drive competitive solutions for sustainability and potentially help finance and address sustainability challenges in the years ahead. An investment in sustainability—people, planet and prosperity – is core to how an organisation can succeed and prosper as a business.
Dr. Kaushik Sridhar is the National Sustainability Manager at Regis Healthcare, Advisory Board Member at the Lord Mayor’s Charitable Foundation, Business Coach at Latrobe University’s Accelerator Program and Adjunct Lecturer at the University of Melbourne and RMIT. He has spent his career consulting and studying sustainability strategy, governance, ethical procurement, data management, energy efficiency, behavioural change, social impact assessment and stakeholder engagement.