[caption id="attachment_1880" align="alignleft" width="538"] 5 ways to a sustainable business[/caption]

Sustainability in the private sector is trending away from “green washing” and moving towards the mainstream. A recent McKinsey survey showed the number one reason private companies pursued a sustainability strategy was to better align themselves with corporate business goals. Creating a sustainable business can be good for bottom lines while achieving significant environmental and social benefits. Here are five ways businesses in Latin America and the Caribbean are becoming more sustainable.

1. Measure impacts

Results measurement allows companies to set and communicate goals and targets and then report on the most meaningful results. To do so, firms seek to calculate environmental and social value and connect that to financial performance. Measurement includes indexes, like the Higg Index for environmental and social performance of apparel, and certifications, like B-Labs’ B Corporation. B-Corp Onda Organica produces organic cotton clothing while embracing responsible working conditions. Standards like ISO 14000 facilitate environmental compliance by calculating operational impact. Life cycle assessments are also gaining traction, measuring environmental impact from raw material extraction to manufacturing, distribution, maintenance and recycling.

2. Diversify gender

Women are both employees and customers. When evaluating long-term sustainability, considering women’s dual roles can add financial and societal value. In 2013, a study published on women in Latin America revealed that 60 percent of executives believe companies generate higher financial returns with diverse leadership teams including numerous women.

Given that women globally control $20 trillion in spending and influence about 64% of purchasing decisions, banks are increasingly reaching out to this underserved population. Banco Nacional de Costa Rica launched Banca Mujer to provide financing and business support for women entrepreneurs. As part of the women entrepreneurshipBanking program, the IDB  now has eleven banks receiving a total of $110 million to grow their portfolios of women-led small and medium enterprises.

3. Foster social inclusion

The base of the pyramid (BOP) is another nexus where market expansion and economic inclusion intersect. Meeting the needs of the BOP market is an estimated $509 billion a year business opportunity. Especially high growth sectors include housing, energy and health.

Thanks in part to BOP businesses and policies, the region’s middle class increased by 82 million people from 2000 to 2012. While more needs to be done for the 56 million who have escaped poverty yet remain highly vulnerable, according to a 2014 UNDP report. Provive, a profitable, social impact company in Mexico, is one such solution. Provive renovates vandalized houses and revitalizes BOP communities, selling safe homes to working families at affordable prices.

4. Address climate change

Sustainablebrands.com reported that 53 of the Fortune 100 companies which addressed climate change saved a combined $1.1 billion in climate- and energy-related expenses, and decreased annual carbon emissions by 58 million metric tons. Unilever’s Jiutepec plant in Mexico, collects rainwater, uses natural light from skylights and boasts a renowned recycling program. Supported by the IDB, a Chilean agribusiness, Subsole, is using solar panels to power irrigation for grape and other agricultural production.

APS Soluçoes, a small energy service company in Brazil, was founded with the goal of renovating customers’ lighting and air conditioning systems and reducing impact. APS offers significant monthly energy savings. Lastly, the sharing economy replaces individual ownership of manufactured goods with sharing services. This can drastically cut consumers’ financial and carbon footprints. Profitable ventures in the region, like Bike Rio and AirBnB, are generating momentum.

5.       Mainstream

Consensus is nearly unanimous. Sustainability is not only about corporate social responsibility (CSR). To add value financially and socially, sustainability must be embedded throughout business operations. Limiting sustainability initiatives to CSR or human resource departments fragments the efforts and jeopardizes long-term viability. Based on research from University of California, Berkley, companies that prioritize sustainability perform better on financial and business metrics.  Experience has shown a truly sustainable business has environmental and social goals at its core mission.