August 03, 2022
Once upon a time – corporate sustainability was considered a ‘nice to have’. Something optional that followed a consumer trend and gave businesses some new PR opportunities to shout about. But now that has all changed. Today, sustainability has become an essential part of any business strategy creating a value-driven approach that is better for business as well as creating social and environmental benefits.
First, what is it?
Let’s start by defining business sustainability. In essence, it’s the positive change a company has on both society and the environment. A sustainable business strategy is therefore a means of addressing both areas and in doing so help to solve what many consider to be our planet’s biggest problems such as global warming, pollution, overuse of natural resources, inequalities, racial injustice and human rights issues.
No business can simply ‘switch-on’ their sustainability overnight. It needs to be carefully integrated into the very fabric of the business through strategies and forward thinking.
But, for businesses that do embrace what’s possible, the benefits come in the form of long-term success.
As Harvard Business School Professor Rebecca Henderson stated, you can’t use business to do good in the world if you’re not doing well financially. So, success and altruism are strongly interconnected.
What are the benefits?
For starters, it’s been shown in studies that the most sustainable companies are the most profitable. As found by Accenture’s research into responsible leadership which highlighted that companies with high performance ratings in environmental, social and governance (ESG) issues enjoyed operating margins on average 3.7 times higher than businesses which were lower ESG performer.
Why is this? Well, one of the benefits of championing sustainability is that it improves your brand credibility, develops trust with partners and makes you more desirable to customers.
What’s more, there is an ever-growing market for sustainable goods and services. As shown in a 2019 study which concluded that 73% of global consumers will change their consumption habits in order to lessen their impact on the environment. A similar survey in consumption trends backed this up by stating that the majority of consumers are prepared to spend a 10% more on food packaging and environmentally-friendly material. This means that by taking a sustainable approach you increase sales by attracting like-minded customers.
Even though businesses know the importance of having a sustainability strategy in place, few are still actually incorporating one. A study by BCG/MIT discovered that only 60% of companies in their study had a sustainability strategy in place and just 25% had sustainability as part of their business model.
This lacklustre approach means that by driving forward your sustainability strategy you can gain the competitive advantage. And not just with customers, but also employees. A strong approach to sustainability can motivate staff which in turn drives revenue. Also, staff satisfaction is raised, and they are far more likely to recommend your company to others.
Of course, one of the main benefits is that when business gets behind sustainability it can drive change. And when companies come together in overcoming problem that are simply too big for individuals to solve, they can be solved. A great example is when Unilever committed to only sourcing sustainable palm oil in 2008, as its production was causing record greenhouse gas emissions. By cooperating with its competitors and governments, as well as relevant organisations, there was an industry-wide change to just using sustainable palm oil. A change that has benefited the world since. All while Unilever has remained an industry-leading company.
Ready to begin your sustainability journey?
No matter what sector you’re in, or the size of your business, you can start integrating a sustainability strategy into your company. And in doing so take your first step towards a value-driven programme that contributes towards long-term success.
Which is exactly what we’re doing! If you’d like to know more, get in touch today. We’ll happily share what we’ve learnt so far.