Sustainability is no longer just a feel-good niche domain for ‘greenies’ and ‘hippies’. Various studies are showing that more and more consumers want to buy sustainably. In fact, many already are.
For some businesses, though, sustainability seems to be a nice idea that looks better on paper than in practice. Yet, research and practice is showing that sustainability doesn’t just sound good — it’s smart, it works and it's just good business. The World Business Council of Sustainable Development is a collection of over 700 global businesses and they have identified numerous benefits of sustainability. I have chosen 5 main benefits to share with you:
1. Sustainability makes companies more competitive
In a recent report from Nielsen, a global performance management company, it was found that Sixty-six percent of global consumers say they are willing to pay more for ‘sustainable’ goods - a trend that appears to be increasing - up from 55% in 2014 (and 50% in 2013). The report further showed that In the year 2014-2015, sales of consumer goods from brands with a demonstrated commitment to sustainability and social responsibility have grown more than 4% globally, while those without grew less than 1%. This represents a growing global trend where more consumers are looking for products and services that are simultaneously good for them and good for society.
2. Increase Productivity & reduce costs
In a recent study by Pure Strategies, they surveyed 100 global food and beverage, apparel and footwear, home and personal care, toy, and electronics companies involved in product sustainability to find out what financial and organizational benefits they are reaping from product-level sustainability efforts. The business benefits were easy to spot: 79% of respondents reported having already achieved manufacturing cost savings, 74% had measured a rise in employee engagement and productivity, 71% saw trust and brand enhancement, 64% registered logistical and supply chain savings, and 62% were able to better meet consumer demands.
3. More likely to attract and hold employees, customers & investors
People like to be associated with the positive, especially younger generations raised on a steady diet of environmental protection messages. They do not want to be linked to companies implicated in ecological disasters and social welfare scandals. Show your company as respectful of the environment and of its employees and it will attract the caliber of people whom you want to employ and the funds your business needs to expand.
4. Increase business ability to comply with regulation.
Since the Paris Agreement a number of government policy changes have occurred which have various impacts on business, such as single-use plastic bags being banned in various places around the world, and petrol-driven cars being banned in various countries across the world. The UN’s Sustainability Development Goals are providing a global framework of what to expect over the next decade. So, ultimately, integrating sustainability into your business will better position it to meet changing regulations in a timely manner.
5. Increase Profit.
Not only can sustainability be used to lower costs, but it can result in increasing profit. In a study by Robert Eccles Over an 18-year period, they found that high-sustainability companies dramatically outperformed low-sustainability ones in terms of both stock market and accounting measures. The annual above-market average return for the high-sustainability sample was 4.8% higher than for their counterparts and with lower volatility.
Ultimately, these studies are confirming that it pays to be sustainable. Regrettably, though, we are still not seeing widespread take up of sustainable practice within business. There seems to be too much reluctance by business leaders and investors to fully embrace the change to this new type of business model. The focus still tends to be on occasional corporate social responsibility rather than embedding sustainability at the core of their business. Business leaders need to realise that the potential gains from working sustainably are not only huge, but it will be the norm in the not too distant future.