At this point, we are all familiar with the ubiquitous concept of “sustainability” to some extent.
It can take many shapes:
- Governments talking about climate change adaptation plans
- Investors diverting their allocations from the fossil fuel industry
- Food producers moving away from certain chemical fertilizers
With these three examples, we can see how wide the definition of sustainability can be. Each of them tackles environmental concerns from a very different area and with varying scopes.
Additionally, each of them has considerations that go beyond the environmental. Climate change mitigation plans will affect where and how millions of communities live, moving from investments in fossil fuels will promote growth in green industries, and using regenerative agriculture can create a positive shift in the global food system, potentially mitigating global hunger.
Do you see common themes here? When we talk about sustainability, we’re talking about the sweet spot between environmental protection, social well-being and economic progress. For the sake of alliteration, we would refer to these categories as planet, people and profit. Isn’t it fun?
Sustainability in the business world
When we want to find the balance between planet, people and profit in business, things get really interesting. Because as a business owner, you may want to do good for the planet and for all the people involved in your supply chain, but you cannot forget about your corporate goals while you do it.
But we have good news for you: sustainable businesses are viable and more profitable than ever. It’s no coincidence that now some of the biggest players across industries are not only jumping on the bandwagon, but also making sustainability a selling point.
A variety of factors influence how each organisation utilises sustainability concepts. Some of them are objective and quantifiable, such as the industry in which a firm operates, its geographical location and scope, or its size. Others are entirely subjective, such as a company’s C-suite’s assessment of the value of sustainability, or how leaders may prioritise particular ethical concerns (labour rights, animal rights, etc.).
Companies of all sizes are increasingly working with external analysts and consultants to acquire insight into the current condition of their operations and learn about the potential that sustainability can provide them.
This analysis often materializes in the form of a sustainability report that describes these risks and opportunities, and an implementation process of the recommended sustainable practices, as well as regular monitoring. Additionally, as this shift must include all stakeholders within and outside the company, staff receive training regarding these new best practices and marketing efforts shift towards customer engagement and awareness raising.
That being said, if you’ve been in the corporate world for a while, you might be familiar with the acronyms ESG and CSR, frameworks that are often used by businesses in certain industries to plan and communicate their sustainability strategies and commitments.
ESG: Environmental, Social and Governance
CSR: Corporate Social Responsibility
Why corporate sustainability is a good idea
Let’s talk numbers: 82% of investors plan to increase their allocation to ESG investments in the next couple of years. For those 82%, investing in sustainable businesses means making sure their portfolios will be profitable in years to come. Introducing sustainable measures to your operations will make your business more attractive in the eyes of potential investors and give you a competitive edge.
Consumers now have more information about the consequences of their purchasing decisions than ever before. They would rather spend their money on products or services that are ethical or climate positive. Several surveys confirm this trend, as 78% of consumers are more likely to purchase a product clearly labelled as eco-friendly and more than 70% of consumers across multiple industries are willing to pay an additional 5% for sustainable products or services with the same performance as non-green alternatives.
Stay ahead of trends and regulations
Don’t wake up one day with an obsolete and non-compliant business! The environment in which you conduct your business is rapidly changing, and environmental and social regulations and trends will be among the primary forces pushing it to evolve. Legislators are already demanding start-ups and SMEs to publish non-financial disclosures where information on their environmental impact is just as important as financial data, and banks are requiring carbon footprint disclosures to grant loans.
Creating a business strategy around sustainability will allow you to cut operating costs for raw materials, electricity and other resources your business needs to thrive. Finding opportunities to manage your business sustainably while reducing your expenses will depend on several factors (industry, location,…), but research carried out by McKinsey found that the right plan and implementation can help you save as much as 60%.
Increase brand equity
It is important to consider how others see your firm, both inside and externally. By embracing sustainability, your brand will take on a new dimension, demonstrating that you care, and your company will become a catalyst for transformation, innovation, and industry leadership.
How to get started with sustainability
The first step to creating a positive impact with your company is having a profitable business – you can’t change the world if your business is going under. The next steps are:
- Assess where sustainable practices will fit within the business: are there any opportunities to be found in ethical and greener operations? Are we running any risks if we don’t implement them?
- Create a business strategy where sustainability is embedded into your corporate goals
- Implement your sustainable practices and avoid any business disruptions while doing so
- Train staff to support the new sustainable practices and make sure these changes aren’t causing any issues for the staff
- Monitor the effects of the new practices and reassess them if they’re not working
Our team here at Moiety can help you with:
Did we spike your interest?
Whether you know exactly what your business needs are, or you need us to guide you on your path to sustainability, contact us and learn more.