Why Turning to Sustainability Is Important for Businesses?
Sustainability has become one of the key factors that determine whether a business can remain relevant and competitive in today’s market. However, although 90% of company executives in the world consider it extremely important, only 60% of organizations have actual strategies in place. The reality is that companies can no longer afford to keep omitting sustainability from the core corporate strategy, and nowadays, it needs to grow in three different areas: Environment, Social, and Governance (ESG).
What Is Sustainability in Business?
Sustainability refers to the effect of different companies on both the environment and society and a successful strategy in this domain has the goal of positively impacting one or both areas. The strategies are mainly focused on addressing global problems like the depletion of natural resources, climate change, pollution, human rights issues, gender and racial injustice, and many others.
The Value of Sustainable Corporate Strategies
Besides the obvious aims to drive environmental and social change, implementing well-designed strategies can also improve the overall success of an organization. The levels of ethicality and sustainability of a company are often evaluated with the use of ESG metrics, and the organizations with the highest ratings continue to outperform their competitors, both medium and long term.
Including sustainable efforts in the existing business strategies can help companies meet regulatory requirements and consumer demand, as well as handle the growing investor pressure. On top of that, companies that invest time and money in this area end up reducing their costs, improving profits and attracting more top-talent individuals.
Actionable Steps for Businesses
Take a look at the following ideas that can help your organization build a more sustainable future:
Incorporate ESG Investments
ESG investing is a type of financing that evaluates the returns by considering environmental, social, and governance factors, and more and more businesses include it in their strategies.
Examples are many. Even some of the famous online casino companies recognized the importance of making an impact in the local community in order to improve the living conditions in the area, as well as build the business’ name. For example, New Zealand’s famous Sky City Casino began making ESG investments by supporting three different organizations focused on creating a better world. They geared the funds towards Leukemia & Blood Cancer New Zealand, as well as Sustainable Coastlines and Million Metres Streams, both revolving around nature preservation. A fight for a sustainable future by SkyCity NZ is a step all companies should embrace, and there are great examples of Canadian businesses doing the same.
For instance, HSBC has put so much effort into 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 helped them reach 2.8 million children in need.
Align Your Strategies
Whichever way you choose to improve the world for the better, you need to gather your management and make sure that the new strategies work flawlessly with the organization’s existing goals and efforts. Not doing so is a common mistake where companies remain unmotivated to make real changes due to divergence and other difficulties that arise from it.
However, there are some amazing examples that you can learn from, and one of them is the Planet Positive Initiative by Unilever which includes a plan to protect and restore 1.5 million hectares of forests, land, and oceans by the year 2030. Unilever incorporated the environment protection goals into their existing efforts, claiming they will be able to save more land than they actually use for the growth of renewable ingredients used for their personal care and beauty products.
Quantify and Stay Transparent
Many companies struggle when it comes to being able to quantify the return on ESG investments. However, finding a way to get to see the actual numbers will help you streamline and modify the efforts for the better.
One way to do so is to link the entire approach to a business case that will help you keep track of the expenses and returns. Moreover, in order to maximize the efforts, you need to establish transparency that will also allow you to assess and enhance all the practices.
Transparency creates an open environment where everyone involved can work on improving the performance of the project, and it can only be achieved if you maintain open communication with the stakeholders. In such a model of cooperation, you need to establish a high level of information disclosure and accuracy, as well as the practice of recognizing potential mistakes and willingness to fix them.
Sustainability is a great challenge for many companies in the world, but the practice certainly offers invaluable rewards, both for the organization itself and for the environment. Now that you are aware of all the benefits of sustainable businesses, you can join the movement and start implementing actionable steps that can help you take the lead in your industry.
