Defining Sustainability in Business
As environmental degradation and climate change become more widespread, the desire to live a greener lifestyle has recently become less of a trend and more of a necessity.
The global shift toward green consumption has forced traditional business models to “adapt” to satisfy new market demands.
Sustainability does not just focus on climate change; sustainable business strategies help address things such as income inequality, depletion of natural resources, fair working conditions, human rights issues, pollution and racial and gender inequality.
However, sustainability in business is not completely altruistic, despite how it may sound.
You can’t use business to improve the world if you’re not doing well financially, Harvard Business School Professor Rebecca Henderson points out in the online course Sustainable Business Strategy.
Business strategies that are successful combine both doing well and doing good.
Why Is Sustainability Critical?
Initiatives focused on sustainability not only promote social and environmental change but also an organization’s overall performance.
Spending more money on sustainable business methods to increase a company’s profitability may seem contradictory, yet studies have shown that the most profitable businesses are also the most sustainable.
Metrics related to environmental, social, and governance (ESG) are frequently used to assess an organization’s ethical and sustainable practices.
Companies with strong ESG ratings consistently beat the market in the medium and long terms, according to McKinsey.
Sustainability initiatives may require a short-term investment, but they pay off in the long run.
Millennials and Gen Z make up largest consumer and employee groups
Being Sustainable is a Business Advantage
Sustainability doesn’t interfere with commercial objectives and giving your organisation a purpose can help you attract and retain a talented, motivated team that will help you succeed financially.
According to a Deloitte survey, 49% of Gen-Zs and 44% of millennials claimed that their personal ethics have guided their job decisions.
They also found that 51% of business students in the US would accept reduced income if the company practised environmental responsibility.
Due to the rising demand for talent, businesses that don’t prioritise sustainability risk losing out to those that do.
Making your business a place that does good in the world rather than merely a place that pays the bills will provide you with a competitive edge when trying to recruit top people.
Protect Your Brand and Reduce Risk
A CEO’s worst nightmare is becoming the subject of a scandal that makes the front page.
Improper actions not only harm a company’s reputation and drive away consumers but dealing with a PR crisis can take important human and financial resources away from the business.
No one wants their business to be known for creating an oil spill or making workers endure hazardous working conditions.
Implementing a sustainable plan that safeguards the environment and your employees also safeguards you from any negative situations.
Increase Business Productivity
Being sustainable will increase employee motivation to deliver better work.
According to McKinsey & Company, sustainability lowers expenses and can have an impact on operating profits of up to 60%.
Being sustainable also boosts output since, according to a Deloitte study, inclusive cultures are associated with 27% higher profitability and 22% higher output at businesses.
Meet Regulatory Demands
Governments must be more stringent, as the Paris Climate Agreement has made clear.
While the UK, Canada, Japan, and other nations have a 2050 net zero commitment, Sweden and Germany have legally binding net zero ambitions for 2045.
Non-EU companies who conduct business in the EU will also be impacted by the EU’s stronger rules, which regulate companies on how environmentally friendly they are.
Organizations should begin changing their operations to become more sustainable in light of the shift toward sustainability being made by many governments.
This will mean your business gets ahead of the game, will not be playing catch up and can form good relationships with regulatory bodies!
Sustainability Has Huge Value
Sustainability does not imply forgoing profit or slowing down success.
Instead, it has developed into a vital component of any organization’s effective strategy.
Businesses that ignore sustainability perform worse in terms of profitability, growth, and employee retention, among other metrics.
By having a sustainability strategy built into your business, your company will find success because of sustainability, rather than despite it!
Play It Green exists to help make your business more sustainable, through employee engagement, net zero support and great marketing content.
Join our community of change-making companies and create a sustainable culture in your business, while reaping the rewards and benefits this brings.