The world is currently facing major environmental challenges, many of which have worsened considerably in recent years. From global warming, deforestation and pollution to overpopulation, loss of biodiversity and the depletion of natural resources, there’s a growing number of interconnected issues that have brought us to the brink of an environmental crisis.
As a result, environmental awareness and Embracing sustainability in business have become hot topics of discussion in almost all circles, especially in the business world. It has been estimated that nearly 71% of the global greenhouse emissions come from only 100 companies, which means individual efforts pale in comparison to the power held by the largest companies in the world. As the biggest contributors to global pollution, pressure is mounting for businesses to address their environmental footprint and boost their sustainability efforts.
In an ideal world, it wouldn’t take a global crisis for companies to take action in this respect. However, back in the real world, things are a lot more complicated than they appear. Integrating environmentally-friendly solutions into a business system is a lot easier said than done, and many business owners fear the costs and the challenges associated with the transition to more sustainable practices.
It’s no secret that becoming a sustainable business can be expensive, usually requiring high upfront investments, and not everyone is willing or has the means to go down this path. However, if acting in an environmentally conscious manner wouldn’t also be profitable, there wouldn’t be so many companies jumping on the bandwagon, investing in plastic balers and recycling solutions that can help them boost their green credentials. So, this raises the question: is Embracing sustainability in business worth the effort or not?
What is business sustainability?
First, we have to clarify what Embracing sustainability in business is so we can start the discussion from a common point. The fact that there’s no generally accepted definition nor a specific type of company that one could use as a point of reference has caused the term’s meaning to evolve in different directions and sometimes lose its essence. That’s how Embracing sustainability in business has come to be confused with or reduced to actions like addressing pollution or providing equal opportunities.
The best way to eliminate confusion and ensure a more accurate understanding is to look at the three main pillars that the concept is based on: environmental, social and governance or ESG. The ESG strategy was initially used for investors, but with time it has made its way into the common vocabulary, sometimes being used as a synonym for sustainability. This is theoretically inaccurate since sustainability describes an ideal that has yet to be achieved by a company or organization, while ESG provides a realistic framework that businesses can use to achieve some of their suitability goals.
Nevertheless, the idea is that business success is directly linked to environmental, social and economic factors. In other words, a company cannot thrive independently of healthy environmental and social systems. Focusing on profit alone while putting human stability and security at risk is a recipe for disaster. Therefore, we can conclude that business sustainability is about meeting current needs and ensuring long-term business success by managing environmental, social and financial demands without affecting the health and well-being of the planet or society as a whole.
The case for Embracing sustainability in business ;
While Embracing sustainability in business looks great on paper and seems like the responsible thing to do, business owners want to know what’s in it for them. Is sustainability really going to help them in the long run or is it nothing more than a major trend that all companies are forced to align with because everyone else is doing it? The answer lies in the benefits that sustainability brings to the business world.
1. Creating business value
Several studies link Embracing sustainability in business to improved long-term performance. For instance, a study conducted by Deutsche Bank has shown that companies that score higher on the ESG scale performed better than their competitors in the medium and long term. The Morningstar U.S. Sustainability Leaders Index report revealed similar results, with higher ESG-rated companies having considerably higher returns. This serves as proof that sustainability translates into long-term prosperity.
2. Meeting customer needs
These days, consumers are more concerned about environmental protection than ever before and they expect brands to take a stance and address these issues through their actions. Millennials, which represent the largest group of consumers, are particularly interested in issues such as global warming and global change and tend to support businesses that care about these problems and take action in this respect.
Therefore, businesses that check Embracing sustainability in business box are more likely to attract a larger number of customers than the ones that choose to ignore these aspects.
3. Attracting investors
It’s not just consumers who find sustainable businesses more attractive but investors as well. This makes perfect sense since investors are looking for a guarantee that the companies they’re interested in will be able to survive and thrive in the long run. Therefore, sustainability has become an important criterion for investors that weighs heavily in the balance when vetting companies.
4. Attracting and retaining top talent
If millennials place a great deal of importance on Embracing sustainability in business when choosing where to purchase their products and services from, the same thing applies when they go job hunting. Job seekers prefer sustainable companies because they align with their own values and principles, making it easier for said companies to attract and retain top talent.
5. Lowering costs
It’s true that creating a sustainable business requires considerable investment. But Embracing sustainability in business practices also improve operational performance by reducing the amount of time, labor and materials that go into the production process. In the long term, this results in lower production costs and higher profits for the company.
Embracing sustainability in business may be a complicated and time-consuming endeavour, but looking at all the benefits this strategy provides it becomes clear that sustainable development is key for future prosperity.