How Sustainability Can Drive Business Growth: This article explores the essentials of sustainable business growth, the importance of making the change, and 4 key strategies that can help begin the process.
By Annie Button
Creating sustainable company practices is becoming increasingly important for many business owners and leaders worldwide. Climate change continues to pose an imminent threat to life on the planet, not just pertaining to human beings but to all other species, with the human impact being the leading driver of global warming.
Sustainability has, somewhat bilaterally, grown in importance for businesses as much as it has for their consumers, partners and investors. For companies to grow and retain that competitive advantage, they need to overtly demonstrate how committed they are to preserving the planet’s resources, minimizing carbon emissions, and lessening the impact of climate change, while not compromising on their service delivery.
Investing in sustainability can help companies grow in a multitude of ways. They can save money on energy consumption, transportation and waste production, and foster new partnerships with like-minded businesses to spearhead them towards growth and prosperity. At the heart of a sustainability-focused approach, however, is improved customer loyalty and recognition, and businesses that refuse to adopt this mindset risk losing a huge share of the marketplace and their competitive edge.
Pillars of Sustainability in Business
Starting a sustainable business is a practice suited for entrepreneurs that are already aware of the impact and prevalence of climate change. This will help to make a positive impact on the environment and, as that business scales and grows, hopefully, inspire others to follow suit. But that does not mean existing and influential businesses shouldn’t change their methodologies and strategies to become more eco-friendly.
All business owners and leaders, new and experienced, should take the initiative to improve industry-wide and collective sustainability, as well as within their own organizations. Education, transparency, and leadership are crucial in helping employees learn about business sustainability, and take their individual responsibilities seriously.
To begin taking positive steps towards sustainable business practices, it’s important to understand the three main pillars, otherwise known as the Triple Bottom Line. They are:
- Economic – helping a business to make a lawful and ethical profit
- Social – helping a business to focus on positive interactions and relationships with employees, stakeholders, and the wider community
- Environmental – helping a business focus on reducing its carbon emissions, water usage and waste, as well as adopting new technologies and strategies to improve its preservation of resources
Every business is different and can measure its sustainability using the three pillars above.
By adopting the Triple Bottom Line approach, businesses are beginning to include sustainable practices in their long-term strategies. Ultimately, they can find increased profits while contributing positively to society, their communities, and the environment.
Why Your Business Should Embrace Sustainability
In the eye-opening Carbon Majors Report, only 100 fossil fuel producing companies were analyzed but were said to account for more than 70% of global carbon emissions. At the time, investors questioned the findings and asked what exactly they were financing. This, in turn, offered far wider implications for every company to address accountability and become part of a global solution. In contrast, according to the Paris Climate Agreement, today’s businesses make a far greater impact and, collectively, are predicted to reduce carbon emissions 45% by 2030, and reach net zero emissions by 2050.
Let’s break down some of the many reasons why every business needs to be more sustainable.
Companies that embrace sustainability from the outset may be met with some high upfront costs, such as installation fees for heat pumps, solar panels and batteries. However, considering the ongoing and fluctuating costs of energy consumed from, say, suppliers that distribute energy via the National Grid, it’s highly likely that the long-term operational and maintenance cost savings will be incredible. By spending less month to month on operating costs, companies will see improved cash flow to use to put back into the business.
By making smarter decisions regarding the company’s operational energy usage and costs, business owners will likely see a greater influx of revenue in the long run. Over time, fossil fuels are expected to become increasingly limited and, therefore, more expensive. However, developing new and sustainable ways of working by using alternative resources and renewable energy will ensure the scarcity of finite materials doesn’t worsen, and also allow companies to make profitable returns.
Sustainability is important for many consumers, with many proclaiming that they will actively buy from brands that follow an eco-friendly mindset. Businesses that embrace sustainability are more likely to be respected by consumers and the wider community, and thus, their reputation will only grow in positivity. The same can be said when prospecting new referral partners and stakeholders. Positive long-term relationships will continue to grow in number and your excellent reputation will also remain intact.
Attracts and Retains More Talent
Sustainable business practices don’t just attract consumers, they also appeal to the growing number of workers in various specialisms and industries. By sharing their sustainability goals, businesses will be able to hold onto their top talent for longer, reducing the need to spend precious money and time on recruitment. Many employees will be more drawn to environmentally conscious businesses, preferring to work with companies that take sustainability seriously.
Businesses always want to retain that competitive edge, whether it’s in their employee retention, sector segmentation, or greater marketing activity. Businesses that implement solid, positive environmental policies, programs and initiatives will help them stay a step ahead of competitors that do not.
As an example, by selling used photography and videography equipment instead of brand-new, out-of-the-box cameras, you will be adapting your business model to be more eco-friendly, and subsequently reducing e-waste by repurposing high-quality products.
Businesses that adopt high environmental, social and governance (ESG) strategies are typically seen as more attractive qualities in the eyes of investors. Investors typically favor socially- and ecologically-conscious businesses with high ESG ratings, largely because they are less likely to pay government fines, as well as being overtly more innovative and competitive.
Sustainability isn’t just a quality that businesses should exclusively use to attract talent and clients; high-quality investment can be a big difference-maker in a company’s growth and success, allowing it to tap into new markets, expand operations, and invest more in its marketing.
It’s Your Responsibility
The Paris Climate Agreement has stipulated that governments need to be more strict, with many countries setting national net zero targets and commitments. The EU’s taxonomy regulates businesses based on how sustainable they are, which can affect how any country worldwide does business within the EU.
Considering the widespread move towards sustainability, organizations (regardless of geographical location) should begin transforming their operations to become more sustainable, as it will lead to improved supply chain relationships. Failing to do so could result in your competitors beating you to the punch and entering into long-term agreements with importers, exporters or suppliers across supply chains.
4 Key Ways to Encourage Sustainable Business Growth
Sustainability is set to play a crucial role in the coming years, with growing investor demand, employee satisfaction and retention, and reputational pressure in the eyes of consumers. This is why we will likely see more companies adopting eco-friendly practices such as those outlined below.
1. Establish Sustainability as a Corporate Priority
Incorporating sustainability as part of the company’s new or revamped mission statement is a crucial first step, showing investors, consumers and talent that you are prioritizing green goals. One way to cement this effectively is to appoint a CSO (Chief Sustainability Officer), or, if this isn’t possible yet, establish green core values or obtain relevant business certifications based on your sustainability practices.
In turn, this will help foster a culture of sustainability around your organization, with employees holding themselves accountable to management. Establish clear goals and tangible actions that will help you achieve those goals within your vision, and regularly communicate this – and your progress – every month or quarter.
2. Work Towards Zero Waste
Every business will produce varying amounts of waste, regardless of company size or industry. What is most effective is how they go about reducing what they produce as much as possible. First and foremost, recycling everything you do not need, or donating old equipment and resources to charities are good, green options for businesses looking to give back.
Some solutions are simple, such as reducing the use of paper or finding eco-friendly alternatives that use less energy and water. However, in today’s digitally connected world, tech equipment is a high priority, and yet it still uses finite resources. While refurbished or used technology isn’t a new concept, they are still just as reliable as new products, despite what employers may think. By buying second-hand, you are saving money and lessening your impact on the environment.
3. Use Sustainable Materials and Suppliers
Businesses that trade globally are under increasing pressure to use sustainable packaging and materials for their products. Consumers are making conscious efforts to buy fewer products packaged in single-use plastic or non-renewable materials.
Businesses looking to improve packaging methods should consider recycled paper, cardboard, or biodegradable or organic fabrics, and use the smallest amount possible. If your packaging can be reduced in any way, it’s a good start to finding an alternative material that isn’t as harmful to the environment.
Many companies take this action a step further by reconsidering supplier agreements. One more eco-friendly alternative is to source goods or materials from local suppliers, reducing transportation time and distance, and this also accomplishes the goal of supporting local communities. Partnering with a trusted network of local suppliers can drastically improve your business’s reputation and brand image.
4. Go Renewable
Consumers are trying to conserve the amount of energy they are using, particularly with soaring gas and electricity prices. Businesses are no different and are looking at changes they can make.
This can range from assessing their buildings, including heating, lighting, and electrical appliances. In the short-term, using energy-efficient lights like LED units and more natural light will have a better impact, as will setting heating on timers so it is not on when premises are empty. Switching to renewable energy is also an effective way to reduce your business’s carbon footprint. Installing solar panels, geothermal systems or solar panels will also go a long way in helping businesses achieve renewable energy goals, significantly lessening the impact on the environment.
About the Author
Annie is a freelance writer based in the UK, who has written for a variety of prestigious online and print publications.
She specialises in lifestyle, business, branding, digital marketing and HR.