Nine top business reasons for sustainability
- 08 June 2016
- 758 views
Convincing the board to take a sustainable approach is about more than tugging on heartstrings – you’ll need to make a solid business case for sustainability. Here are some of the arguments you can deploy.
Reducing an organisation’s environmental impact is no longer a worthy sideshow in a business strategy – sustainability is a bottom line issue. Increasingly, sustainability and corporate responsibility are core components to any forward-looking organisation.
“The most compelling business case for adopting sustainability is also the simplest: no planet = no profit,” says Chris Gorell Barnes, founder of content agency Adjust Your Set, and co-founder of marine sustainability initiative Blue Marine Foundation.
“At its heart, sustainability isn’t about do-gooding or saving the planet; it’s about how we will go on making money in the years ahead,” explains Mike Tuffrey, co-founding director at Corporate Citizenship, a sustainability and corporate responsibility consultancy that works with a range of large multinationals, such as Unilever, to build the business case for sustainability and embed it in business strategy. “Businesses need to take action now, in order to survive for the long term.”
Pointing to the example of Unilever, which Corporate Citizenship has worked with for more than a decade, Tuffrey says: “The business case for them is clear – higher margins, millions off the cost base, and a share price 60% higher than five years ago, while markets as a whole have flat-lined.”
The case for this approach is becoming clearer all the time, agrees Gorell Barnes: “Thanks to Unilever – a business that says its brands with purpose are growing at twice the speed of others in its portfolios – we now have proof that ‘doing good’ equates to ‘doing well’. Also, sustainability has recently become a consumer demand, so without it your brand is more likely to fail. What’s more, sustainability is a smart way to build advocacy and so help build the brand.”
So what are the key business arguments for implementing a sustainability strategy?
1. Reduction of costs
Adopting a more sustainable business strategy that includes managing resources more effectively can have a significant impact on operating costs. From supply chain logistics to energy efficiency solutions – such as low energy lighting and the use of renewables – organisations that aim to reduce their environmental impact can also benefit from reduced operating costs.
Something as simple as video conferencing can have big returns. Unilever rolled out use of ‘telepresence’ in 30 counties in just two years – and eliminated the need for around 14,500 short-haul flights and more than 23,500 long haul flights. Estimated cost savings were almost €40m with a reduction of 113,500 tonnes in CO2 emissions.
2. Enhancing brand image and PR
Demonstrating a sustainable business strategy and CSR presents a stronger, more responsible brand image to consumers and can encourage brand loyalty. It can also help frame more positive public relations and brand advocacy.
“Sustainability is crucial for building brand loyalty,” says Gorell Barnes. “In an era of increasing digitally-enabled transparency, developing brand loyalty has become even more important to overall business success.”
3. Attracting new customers
Organisations that have already adopted corporate social responsibility policies – including many large enterprises – are likely to use sustainability criteria to assess suppliers and contractors. A demonstrable commitment to sustainability can therefore open the door to new business opportunities. In addition, it will be more attractive to environmentally conscious consumers.
4. Attracting talent
Do you want to be an organisation that the best people want to work for? A progressive corporate approach to sustainability and social responsibility appeals to employees and can engender a positive, dynamic attitude that feeds into the rest of the business. “Sustainability helps attract talent, especially millennials,” says Gorell Barnes. “Youth State research shows that this generation – the future workforce, no less – is more likely to work for a business that has a positive social purpose at its heart.”
5. Mitigating risk
Sustainability isn’t just about what your company does – it’s also about your supply chain. It’s vital to ensure your strategy covers the supply chain, from ethically sourced materials and manufacturing to raw materials and procurement. As well as mitigating brand reputation risk, a sustainable enterprise procurement policy can also mitigate potential supply chain disruption and the risk of legal action against your organisation. It can also benefit long-term supply planning.
6. Encouraging innovation/innovative thinking
Opening up an organisation’s culture to focus on finding sustainable solutions can encourage innovative ways of thinking, problem-solving and doing business that will feed into many elements across the operation. With the whole workforce onboard, sustainability initiatives can deliver great ideas from across the business – from cost-savings to identifying new business opportunities.
7. Demonstrating corporate leadership
Organisations that operate a sustainable business strategy and promote CSR are likely to be more attractive to potential investors, business partners and clients. It demonstrates a progressive and innovative approach to business and reflects a longer-term planning strategy.
Ensuring sustainability is embedded in the organisation’s culture enables an effective, flexible response to new regulation or legislation, minimising the cost of meeting new requirements. This may also put an organisation in a stronger position to benefit from carbon-reduction or other green incentives and tax breaks.
If you don’t embrace sustainability as part of your business strategy, you can be sure that your competitors are – or soon will be – and your market position will ultimately suffer.Back to all
- 758 views