How Sustainability can help Business?

Source: activesustainability.com

You might have heard about Fortune Ranking of America's Biggest Companies.

It is published every year.

However, this year one thing was common between all the companies on the list.

All had corporate social responsibilities (CSR) in their core objectives.

This is the sign of transition from objective of "growth" to "sustainable growth".

Earlier, the companies were undertaking efforts for sustainability

• due to pressures from their consumers, media, shareholders and others, and

• for taking the benefit of government lobbying or incentives.

But now, the sustainability is deeply ingrained with the strategy of the organisation embracing the triple bottom line approach and circular economy.

And, this is the reason why average tenure of CEOs is on the decline and that of the CSO (Chief Sustainability Officer) has grown by over 300%.

Sustainability is constantly and heavily promoted by the largest product and service companies in the world, such as GE, Apple, Amazon, Tesla and Whole Foods.

So, 5 reasons why company can get benefitted due to sustainability:

1. Attracting And Retaining Employees

The Covid-19 era have been marked with what has been called the “Great Resignation”.

Many employees left their jobs for various reasons and one of the prominent reason was absence of CSR agenda in the company.

In fact, about a quarter of both Gen-Z and millennial employees have asserted that a company having a sustainability agenda has influenced them to stay.

2. Value Creation, Cost Reductions And Innovation

Successful companies look at sustainability from a point of considering how they can leverage it to have better returns on capital both operationally and commercially.

The application of the right methodologies against sustainability goals by the company can help them

• use their resources more efficiently,

• discover costs and supply chain savings,

• reduce packaging or service costs and

• find innovative opportunities to increase profits on their sustainable products.

3. Brand Reputation And Consumer Demand

These types of initiatives can have a positive impact on the expansion of the consumer base, a brand’s reputation in the marketplace and customer loyalty.

Products and services offered as “sustainable,” alongside very clear and precise marketing, have proven to increase sales and reach and capture a growing audience that cares for their health and the environment.

Such marketing also positions the company for positive publicity and potential partnerships with other sustainably focused brands.

4. New Opportunities And Emerging Markets

Entering new markets is a two-pronged approach, first in providing products and secondly by providing services at a lower margin in markets that provide share or entering markets that have not been touched but show demand.

Having a sustainable product or service in one market can also help lead to a referral to another market prime for expansion.

All of this equates to new sales for the organization.

5. Competitive Advantage

When conducting a traditional SWOT analysis, a company’s view toward sustainability should be classified as a strength and ideally a differentiator among its competitors.

In some instances, when consumers are evaluating their options, it may, in fact, prove the deciding factor for the final choice they make.

Some companies leverage this as “first to market” not in terms of their product or service but the way they have positioned themselves in the marketplace.

Conclusion

Sustainability as a fundamental and critical business practice is here to stay, and the best companies are embracing it as leverage for new growth, revenue and the potential to positively impact society.

It's a adapt or die situation for the companies and the companies that do not engage will suffer and have profitability loss, whereas the ones that do will greatly benefit both their companies and our environment.