Why Turning to Sustainability Is Important for Businesses?
Sustainability has become one of the key factors that determine whether a company can remain relevant and competitive in today’s marketplace. Although 90% of business leaders around the world believe this is extremely important, only 60% of organizations have actual strategies in place. The reality is that companies can no longer afford to remove sustainability from their core corporate strategy and today must grow in three distinct areas: environmental, social and governance (ESG).
What is corporate sustainability?
Sustainability refers to the impact of different companies on the environment and society and a successful strategy in this area aims to positively influence one or both areas. The strategies mainly focus on tackling global issues such as depletion of natural resources, climate change, pollution, human rights issues, gender and racial injustices and many others.
The value of sustainable corporate strategies
Aside from the obvious goals of driving environmental and social change, the implementation of well-designed strategies can also improve an organization’s overall success. A company’s level of ethics and sustainability is often assessed using ESG metrics, and the organizations with the highest scores continue to outperform their competitors, both in the medium and long term.
Incorporating sustainable efforts into existing business strategies can help companies meet regulatory requirements and consumer demand, and withstand increasing pressure from investors. Additionally, companies that invest time and money in this space ultimately reduce costs, increase profits, and attract more top talent.
Actionable steps for businesses
Take a look at the following ideas that can help your business build a more sustainable future:
Integrate ESG investments
ESG investing is a type of finance that assesses returns while considering environmental, social and governance factors, and more and more companies are incorporating it into their strategies.
There are many examples. Even some of the famous online casino companies have recognized the importance of making an impact in the local community in order to improve the living conditions in the area and build the company’s name. For example, New Zealand’s famous Sky City Casino started making ESG investments by supporting three different organizations focused on creating a better world. They focused funding on leukemia and blood cancer in New Zealand, as well as sustainable coastlines and million-metre streams, both of which revolve around conservation. Fighting for a sustainable future through SkyCity NZ is a move all businesses should embrace and there are great examples of Canadian companies doing the same.
For example, HSBC has placed so much emphasis on helping the environment that they even launched their own ESG reporting centre, while UBS Canada launched their own Oncology Impact Funds as well as the UBS Optimus Foundation which has helped them Reach 2.8 million children in need.
Align your strategies
Whatever path you choose to improve the world for the better, you must rally your management and ensure that the new strategies work flawlessly with the organization’s existing goals and efforts. Not doing this is a common mistake that leaves companies unmotivated to make real changes due to variance and other resulting difficulties.
However, there are some amazing examples you can learn from, and one of them is Unilever’s Planet Positive Initiative, which includes a plan to protect and restore 1.5 million hectares of forest, land and oceans by 2030 to meet environmental protection goals in their existing efforts and claim that they will be able to save more land than they actually use to grow renewable ingredients for their personal care and beauty products.
Quantify and be transparent
Many companies struggle to quantify the return on ESG investing. However, if you can find a way to see the actual numbers, you can tweak efforts and change them for the better.
One way to do this is to tie the whole approach to a business case that will help you keep track of expenses and income. Also, to maximize efforts, you need to create transparency that also allows you to evaluate and improve all practices.
Transparency creates an open environment in which all stakeholders can work to improve project performance, and this can only be achieved if you maintain open communication with stakeholders. In such a collaborative model, you must establish a high level of disclosure and accuracy of information, and a practice of recognizing potential errors and being prepared to correct them.
Sustainability is a major challenge for many companies around the world, but the practice certainly offers invaluable benefits, both for the organization itself and for the environment. Now that you understand all the benefits of sustainable business, you can join the movement and start implementing actionable steps that can help you become the leader in your industry.