Some executives are reluctant to make sustainability part of their company’s business strategy. They mistakenly believe the costs will eclipse the benefits. In fact, just the opposite is true.
A growing number of companies are realizing that in the business world, sustainability has become requisite to long-term profitability. As a result, many organizations, including those which have failed in the past to prioritize sustainability, are making a concerted effort to reduce their carbon footprint, adopt sustainable practices, and mitigate the environmental impact of their business operations.
More than being good business, sustainability is profitable. The idea that being environmentally-conscious is good for a company’s bottom line seems to clash with popular assumptions about the private sector and corporate profit interests. However, research confirms that making business operations sustainable is just another lens for creating a better company. Let’s take a closer look.
For businesses, the strategic value of sustainability is a result of communicating with and learning from key stakeholders.
A sustainable business confers significant competitive advantages, Tensie Whelan and Carly Fink explain in a recent article for Harvard Business Review. Companies that prioritize sustainability tend to engage in frequent and ongoing dialogue with stakeholders, so a business with “a sustainability agenda is better positioned to anticipate and react to economic, social, environmental, and regulatory changes as they arise,” Whelan and Fink say.
Consumers care (and so do employees)
Over the last decade, consumers have become more environmentally-conscious with regard to the businesses they choose to support. Consumer behavior trends confirm this twinning of corporate sustainability and customers’ brand loyalty. Nowadays, consumers expect more transparency from companies they patronize and can choose from a broad range of sustainable and eco-friendly products that are also competitively priced. More so than generations preceding them, millennials demand products and services that align with their own sustainable philosophies and values.
In that same vein, today’s employees care more about the impact and purpose of their work than their older counterparts did. Therefore, companies that invest in sustainability initiatives will be able to better recruit and retain the best workers.
Improving Financial Performance + Lowering Costs
Organizations can save money and cut costs by adopting sustainable practices. Reducing waste and conserving energy enables supply chains to become more efficient, allowing companies to maximize returns.
Managing Risk Effectively
In order to manage risk effectively and remain competitive in the 21st century, businesses will need to develop sustainable strategies that allow them to adapt to global climate change and extreme weather conditions.
Forward-thinking businesses that see sustainability as an opportunity for innovation will be in the best position to succeed in the future. We’ve reached a turning point in which implementing sustainable practices and reducing the carbon footprint of the private sector are as necessary, both for the Earth and from a financial standpoint, as they are good for PR. In other words, to make your company as efficient, productive, and credible as it can be is to make your company as profitable as it can be.