Sustainable development: long-term value or when business looks beyond the day

Sustainable development in business can take many forms – from conserving resources and ensuring employee safety to investing in community development and transforming management practices. The underlying concept is simple: creating economic value while taking into account the company’s social and environmental impact.

This agenda is also gradually becoming part of Armenia’s business landscape, particularly in sectors where companies’ operations directly intersect with people, communities, and natural resources. Banks.am spoke with Armen Stepanyan, Director for Sustainable Development at the Zangezur Copper Molybdenum Combine (ZCMC), and Aram Araratyan, Corporate Affairs and Communication Manager at JTI Armenia, about how this approach is being implemented and whether sustainability can serve both as a principle of responsible business and as a component of a long-term economic strategy.

Resource conservation, safety, fair remuneration

Today, sustainability is no longer limited to the environmental agenda. Companies consider not only what they produce or sell, but also how they operate, the risks they manage, and the impact their activities have on the environment and the communities in which they operate.

According to Armen Stepanyan, the foundation of sustainable development lies in conserving resources and ensuring their availability for future generations:

“If we view it as a business model, the classic definition is as follows: conducting operations while preserving our resources so as not to create future problems, while also addressing existing issues and moving forward. Such an approach requires an appropriate management model rooted in environmental and social responsibility. The latter extends beyond merely working with communities; the health, safety, and well-being of employees are also vital components of social responsibility.” 

Aram Araratyan, Corporate Affairs and Communication Manager at JTI Armenia – a company engaged in the import and sale of tobacco products in Armenia – highlights three interconnected areas in the company’s approach to sustainable development: product innovation, empowering people, and protecting the planet: 

“The first area focuses on next-generation products, reducing operational waste, and minimizing environmental impact throughout the product lifecycle. The second area centers on caring for our employees and fostering an inclusive environment that enables them to realize their full potential. One example is our ARISE initiative, which aims to expand access to education for children and reduce child labor. This complements our other initiatives focused on employee inclusion, health and safety, respect for human rights, and community investment – including in Armenia. The third area is protecting the planet, underpinned by our firm commitment to achieving net-zero greenhouse gas emissions across our entire value chain by 2050.” 

Business interests and risks of neglect

For businesses, sustainable development is not merely a matter of responsibility; it is also closely linked to corporate resilience and long-term success. According to Aram Araratyan, the company’s operations are connected to natural resources, agricultural supply chains, and communities; therefore, sustainable development is directly linked to business resilience.

“Companies that incorporate sustainable development into their decision-making processes will be better able to manage risks, attract talent, strengthen stakeholder trust, innovate, and create long-term value,” he says. 

On the other hand, disregarding sustainability principles can expose businesses to environmental, safety, social, and financial risks.

Here, Armen Stepanyan draws particular attention to the public and community acceptance of business operations – the so-called “soft” license to operate.

“If the public does not accept you, they might not let you continue your operations, no matter how much money or necessary licensing you have. Such cases are not uncommon, both in Armenia and around the world,” he says. 

In his view, mitigating these risks requires that sustainable development not be regarded as an additional cost imposed on a business or as a separate initiative: “Businesses that have integrated sustainable development into their overall decision-making processes are in a more advantageous position in today’s world.”

The Sustainable Development Director of ZCMC cites the mining industry as an example to demonstrate that the same result can be achieved by organizing operations differently:

“We can operate in a way that leaves behind polluted rivers and environmental problems, or we can ensure the river remains unpolluted during operations – let alone afterwards. We could employ 13-year-olds during operations, or we could choose not to. Ultimately, in either case, we would produce the same metal and pay the same taxes; the question is simply how we organize the activity.” 

A genuine approach or a merely formal one?

To distinguish genuine sustainable development from a token initiative, it is important to understand the extent to which a company’s commitments and goals are reflected in measurable results and transparent reporting.

According to Armen Stepanyan, this can be assessed through the reports published by the company, which should present not only its achievements but also its problems and shortcomings:

“In this way, it is possible to track year-over-year whether the company is making progress – for instance, in areas such as waste management, biodiversity, electricity consumption, productivity, and taxes. The accuracy of the report’s data can also be verified by an independent third party. If, for example, ‘greenwashing’ is detected in any area, that too must be reflected in the report.” 

According to JTI’s Corporate Affairs and Communication Manager, the company evaluates its progress in sustainable development not only through the initiatives it implements but also through their measurable results – using clear targets, performance indicators, transparent reporting, and third-party verification.

“This approach allows us to see not only the initiatives that have been implemented but also their actual results and progress. We monitor indicators related to energy efficiency, water and resource use, emissions, and waste management, in particular, to ensure that sustainable development does not become merely a matter of fulfilling a formal requirement,” he says. 

It should be noted that while financial reporting is a mandatory legal requirement in Armenia, sustainability reporting has thus far been largely voluntary. However, the legal framework for sustainability reporting in Armenia is gradually evolving. Specifically, discussions have been held in Yerevan on introducing a mandatory sustainability reporting system and determining which organizations should be subject to this requirement. Consideration has been given to public-interest entities, large companies, and sectors with a significant environmental impact, including the mining industry. Issues related to report standardization, auditing, digitalization, and the introduction of oversight mechanisms have also been discussed.

In Armen Stepanyan’s view, the report is an important tool for communication between large businesses and their numerous stakeholders:

“It is possible to present various data regarding a company’s operations – such as the number and structure of employees, management, electricity consumption, taxes paid, and other indicators – in a single document, rather than informing each interested party separately.” 

International experience and the opportunities for Armenian business

For Armenian businesses, international experience can offer practical models for embedding ESG (Environmental, Social, and Governance) principles into management systems.

“Sustainable development should not be limited to statements or marketing communications; rather, it must be reflected in an organization’s structure and decision-making processes. International experience offers a valuable model – specifically, the culture of transparency and the publication of reports. While discussing sustainable development and ESG principles is currently a popular trend – which is certainly welcome – it is crucial that this trend also leads to tangible results,” says Armen Stepanyan. 

According to Aram Araratyan, the setting of specific, measurable environmental targets is another example of how international practices can be translated into concrete action:

“Between 2019 and 2025, JTI reduced greenhouse gas emissions from its own operations by 38% and increased the share of renewable electricity to 62%.” 

Ultimately, the next phase of sustainable development is the transition from declarations to measurable results. The more transparent companies are about their goals, results, and shortcomings, the more sustainable development can move from a series of isolated initiatives to becoming an integral part of everyday business management.

Arpi Jilavyan