Why Businesses Need To Embrace Sustainability Now
With growing demand for climate action amongst consumers, it is now more important than ever for businesses to adopt Environmental, Social and Governance (ESG) measures.
Companies can be powerful agents of change, provided they have the necessary resources and policies. As the expectations from businesses increase, companies all over the world are adopting more sustainable ways of doing business.
In this article, we explore the 5 key reasons why it has never been more important for busiensses to embrace sustainability.
Sustainability helps attract and retain new talent
Sustainable principles have become essential for recruiting and keeping talent from younger generations. Simply said, "Boomers worked for corporations, Gen Xers worked for individuals, millennials and Gen Z worked for a cause".
As a result, businesses are under growing pressure to demonstrate an actual sense of purpose. To determine and convey an authentic purpose, companies must first establish their true principles, then contextualize those principles within the framework of bigger societal concerns, and finally declare their goal statement and purpose in connection to overcoming these challenges.
Establishing a comprehensive communication plan for these objectives is crucial to achieving talent in today's job market; for example, Brand values, mission, and purpose are rated among the top five reasons people are drawn to work for their company.
Following this method will assist companies in adapting to the contemporary business landscape and creating a strategy to connect with the younger generation of professionals. Adopting effective sustainability initiatives is essential not just for recruiting and keeping millennial employees, but also for developing connections with the growing number of youth decision-makers.
A rising number of young decision-makers care about sustainability
The workforce demography is changing dramatically, with a surge in millennial decision-makers reshaping how connections and values are built in the B2B arena. Surprisingly, by 2020, millennials will make up half of the worldwide workforce. That purpose-driven workforce now wields more decision-making influence, which has an impact on the expansion of B2B responsible marketing.
As this transformation occurs, flexible B2B businesses that embrace sustainability will benefit immensely, presenting the potential to deepen commercial ties with this millennial population. Research says that surprisingly, 79% of millennial employees are loyal to organizations that care about their social impact. Supporting sustainability efforts will be essential for developing long-term connections with millennial decision-makers; it will also demonstrate flexibility and forward-thinking corporate expertise.
Being sustainable will lower your costs and enhance profits over time
According to a Mc Kinsey analysis, adopting sustainable practices lowers costs and increases revenues by up to 60%. This is demonstrated by the fact that firms with high ESG ratings are the most lucrative. In general, there is an initial cost associated with embracing sustainability as a business; but, in the long run, sustainability will lead to cost savings. This is due to the fact that avoiding needless waste and reusing resources will help you to save money on stranded assets and waste materials utilized in the production process.
Furthermore, fossil fuels and water are predicted to become extremely scarce and hence pricier. Furthermore, energy costs, which have been the major contribution to cost increases for small and medium-sized firms, are expected to climb year after year. As a result, establishing sustainable methods of working and manufacturing via the use of alternative resources and renewable energy will not only ensure the conservation of finite resources but will also allow you to generate significant profits in the future.
Adaptation and innovation are indicators of sustainability
Consciously addressing sustainability challenges in your business offers a signal to clients that your organization is highly adaptable; moreover, effectively preparing to fulfill the strictest environmental regulations can free up more time for innovation.
Notably, "it is wiser to adhere to the strictest environmental regulations before they are enforced. This results in significant first-mover benefits in terms of stimulating innovation... Companies that focus on fulfilling evolving standards have more time to explore new materials, technology, and processes" as stated by Nidolumu in 2009.
Adopting sustainable strategies before they become popular or mandated offers a schedule that is more flexible for research, development, and deployment. This push for innovation also gives a strategic edge that distinguishes your firm from the market, integrating your brand with the evolving business landscape and ensuring your future success. Furthermore, the desire and ability to change will be the defining feature of the winners and losers in the next ten years.
As a result, it is in the best interests of every business to embrace the future with adaptability and to be effective in identifying industry sustainability challenges. As opposed to common misconception, implementing sustainable practices is not always an expensive undertaking; in contrast, many sustainable practices may potentially save the business money.
Investing for Social Purpose
The growing desire to support and engage in purpose-driven businesses has given rise to the concept of socially responsible investing, in which investors actively pursue and invest in firms that have a good influence globally.
This sort of investing, which is becoming progressively profitable, encourages firms that value sustainable operations. According to a current Bloomberg article, "money managers around the world said customers were increasingly demanding sustainable strategies this year, and climate change became a major worry for investors".
Furthermore, socially responsible investments increased by 34% to $30.7 trillion in the last two years. This expansion reflects the increasingly important role that sustainability plays in the commercial sector, emphasising the significance of adopting sustainability for ultimate prosperity.
The most apparent reason for embracing sustainability and caring about our environment is so that we may continue to flourish as a species on it. We all bear an ethical and moral obligation to our world and future generations. Failure to act appropriately today will exacerbate the problem for future generations. What we do today will have a direct influence not just on today, but also on tomorrow. Businesses have a higher burden than individuals since they have a greater influence on the utilization of resources. This is due to the fact that they are the ones that primarily employ them to package and produce items.
As a result, they can have the biggest influence. Consequently, an increasing number of customers demand firms be socially and ecologically responsible. At the end of the day, the present-day companies are not and should not be just about profit.
Businesses should concentrate on today's most pressing societal and environmental concerns and guarantee that sustainability is included in their business strategy. Being sustainable is not only your primary obligation as a business owner, but it is also required if you want your company to survive. Fewer firms survive over decades, according to research.
You must have a long-term sustainability strategy in place today if you want to help your firm thrive longer. You should start thinking about the raw materials you now use in your manufacturing, where they originate from, and where you will acquire them in a few years.
You must consider these factors while keeping in mind that some resources are growing scarcer and more expensive. If you start thinking about it now and make adjustments to your supply chain, you will be ready for the future ahead of other firms.