WHY SUSTAINABILITY IS GOOD FOR BUSINESS
There’s a lovely old Greek proverb that goes “A society grows great when old men plant trees in whose shade they shall never sit.” While this quote is less about the environment or planting trees than it is about altruistic long-term decisions, it still applies to sustainability.
It’s hard to wrap our minds around the effects of climate change because it happens so gradually. But make no mistake, it is a pressing issue - for our planet, humankind and even businesses. According to NASA, global warming is largely driven by carbon dioxide emissions in the atmosphere which are 95% likely to be the result of human activities. And, in recent years, we have only seen an increase in this temperature trend with 2016 and 2020 tied for the warmest years on record.
It’s no wonder that business owners are paying attention. In an extensive study conducted by McKinsey & Company, 72% of the 8,000 companies surveyed indicated that climate change presents risks that could significantly impact their operations, revenue, or expenditures. And climate change is just one of the many challenges we’re facing in this world; there are also social and economic issues that are just as serious.
Many businesses, especially small businesses, don’t know if they can help, or where to start. We’re going to show you that your business can make a difference. But not only that – there are also some amazing benefits to be gained by adopting sustainability practices. But let’s start at the beginning.
WHAT IS SUSTAINABILITY?
Although a lot of emphasis is placed on environmental aspects of sustainability - and that’s a big part of it - there’s more to it than that. One of the most common definitions of sustainability comes from the UN World Commission on Environment and Development: “Sustainability meets the needs of the present without compromising the ability of future generations to meet their own needs.” In short, sustainability is an approach to business focused on creating long-term value and mitigating risk by taking into consideration how organizations operate ecologically, socially and economically.
WHAT ARE THE MAIN BUSINESS BENEFITS OF SUSTAINABILITY?
- You’re making a positive impact in the world. From a moral standpoint, engaging in sustainability practices is simply ‘the right thing to do’. But beyond that, it’s also in your business’s best interest. Would you rather do business in a community that is socially, economically and ecologically declining or improving? In the long-term, sustainability practices can help lead to happier and healthier societies, more prosperous economies and cleaner environments that are better for both families and businesses.
- Sustainability leads to enhanced profitability. A common misconception is that sustainability policies are prohibitively expensive. While there may be some short-term upfront costs, you may be surprised to hear that sustainability can actually make businesses more profitable medium to long-term, according to a study by Oxford University. After surveying 200 businesses, they found that 88% reported that solid sustainability practices led to better operational performance, resulting in improved cash flows. 80% also indicated that prudent sustainability practices have had a positive influence on returns on investment.
- Improve your company’s image. Modern consumers care about sustainability and will make it known through their purchasing power. By adopting sustainability practices, you are showing the public that you and your business care about the environment, social well-being and economic equality. This will be recognized and, in turn, attract new customers and make your business even more marketable to consumers.
- Reduce energy consumption costs. Energy and water expenses can be a major cost of doing business, so it’s best to reduce their use, when and where possible. This can take many forms, from simply switching to energy efficient lighting and adjusting lighting based on your production schedule, to regular equipment inspections and the installation of solar panels to harness the power of clean energy.
- Boost workforce and investor morale. It just feels good to do the right thing. Your existing employees will likely be proud to work at a business that cares about the environment and social causes. And it will help you attract new employees and investors. According to a recent study into how climate change and Covid-19 are transforming workplaces, 65% of respondents were more likely to work for a company with a strong environmental policy.
This is just scratching the surface of the benefits of sustainability. If you investigate further, you’ll find many more. The important thing is to look at sustainability through the lens of your specific business, examine your operational processes and see if there are better ways to do things. Can you create a greener supply chain, reduce waste, use energy more efficiently, improve working conditions or optimize your use of resources? If you can, your business will be better off for it. And hopefully, one day, future generations will be able to sit in the shade of proverbial trees that you’ve planted as well.
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