Due to growing concerns about environmental challenges such as climate change, businesses are expected to meet the expectations of various stakeholders: consumers and investors, the community, society, and the environment. Here are the advantages business sustainability can bring to businesses:
1. Better brand image
The Global Sustainability Study 2021, a study with more than 10,000 respondents from 17 countries, revealed an 85% shift in purchase behaviour towards sustainability in the past five years. By being sustainable, businesses can tap into a market of ethical and environmentally conscious consumers by aligning themselves with consumer values, connecting with them and thus enhancing brand perception.
However, authenticity is also important: besides ensuring ethical practices, businesses should take care in communicating their sustainability commitments to a discerning audience.
2. Employee engagement and retention
Sustainability is becoming more important to today’s employees. According to the HP Workforce Sustainability Survey, 56% of office workers believe sustainability to be as important as diversity and inclusion at the workplace, and 61% agree that sustainability to be essential to businesses instead of a “nice-to-have”. When done well, businesses can attract employees, and keep them engaged and motivated. Besides improving a business’s productivity, employees feel safer and are more likely to loyal advocates of the company.
On the other hand, a questionable track record in business sustainability hurts employee engagement and retention. 39% of office workers would leave a company for poor sustainability practices and leave negative reviews.
3. Increased productivity, reduced costs
Being sustainable increases resource efficiency and in turn, reduces operating costs. A McKinsey study has found that cutting resource costs can boost operating profits by up to 60%. For instance, 3M managed to save $2.2 billion since launching its “pollution prevention pays” (3P) programme in 1975. This was done by reformulating products,
improving manufacturing processes, redesigning equipment, and recycling and reusing waste from production.
4. Investment attractiveness
Adopting business sustainability makes companies attractive to investors, broadening their investor base. Investors are more likely to invest in companies that retain talent, reduce turnover, and demonstrate sustainable and long-term growth.