Follow the moneyWhy a Sustainable Business is a Successful Business
By Dana Eitzen, Corporate and Marketing Communications Executive, Canon South Africa
Sustainability and climate change are two of today’s hottest topics. From Adidas selling 11 million pairs of shoes made from ocean plastic to vegan meat sales increasing by 451% in the last four years, there is little doubt that a change in mindset is taking hold across the globe. But while the key drivers for sustainable products and lifestyles are often ethical or moral, there are also practical business reasons for adopting sustainable ways of working.
THINKING BIG, STARTING SMALL
Any change to how a business runs will invariably come at a cost. Sustainable practice is an investment like any other. But the cost doesn’t have to be insurmountable. For example, reducing waste is likely the simplest and most obvious method to begin engaging in sustainable practices – and it’s practically free. Since the 1990s, offices have been making inroads in this area. From collecting empty cans for recycling and changing out incandescent lights for LED bulbs to reducing the amount of waste paper created, businesses have been reworking or developing new processes that use fewer raw materials and waste less in the production of goods.
Some brands have taken this approach to impressive levels, like Deloitte’s Amsterdam building, The Edge. It is one of the most sustainably built office spaces in the world and it’s connected lighting system is so low energy that the LED lights can have their power needs met through ethernet cables. Sensors measure room occupancy at all times, turning off lights automatically when a room is empty. The building also has smaller windows on south facing walls which keeps the interior temperature cooler in the summer and warmer in the winter, reducing the need for heating and air conditioning.
Of course, investing in a building like this is not necessarily going to be the end goal of every company: despite the fact that it would no doubt prove a return on investment within a number of years. But this is not just about investment – it’s also about protection. By stepping up sustainability, organisations not only save money in energy and storage bills, they also future proof their business. Investing in sustainable practices ensures that companies remain ahead of changing regulations before they come into force. For example, the British Government has vowed to halve the energy use from both new and existing building stock by 2030, so adapting an office space can help them avoid paying fines which, aside from being costly, could also damage a brand’s standing with today’s increasingly environmentally conscious consumers.
DO IT FOR YOUR CUSTOMERS
Indeed, sustainability seems to be one of the hot issues that is having a strong impact on business bottom lines. 87% of consumers said they would be more likely to purchase a product because the company advocated for an issue they cared about, while more than three quarters (76%) would refuse to buy a product if they found out a company supported an issue contrary to their beliefs. Consumers already actively prefer to buy from brands they believe are doing social or environmental good. Organisations must think about their sustainable practices if they want to harness the benefits of this trend.
For example, Lush cosmetics is well known for its commitment to sustainable retail experiences. It recently opened a totally packaging free shop in Manchester where customers pick the products they want and take them home in a recyclable cardboard box and its products are all 100% vegetarian and never tested on animals. The brand’s ethically sound credentials have resonated with its customers and as it has continued to push the limit of what is possible on the high street, it posted record turnover and pre-tax profits in 2018. A clear link between sustainability and increased returns.
It is not just retailers who stand to benefit. Salesforce achieved its target of net-zero greenhouse gas emissions in April 2017, ensuring it’s 150,000 customers were using a carbon neutral cloud service. The company recently installed the largest on-site water recycling system in a commercial high-rise building in the US and it has been sourcing 100% renewable energy for its HQ for nearly 2 years. The company’s financial results, with a 24% to 26% revenue increase year on year for the past 3 years, shows that its green initiatives are landing well with their customers and contributing to the company’s stellar growth.
Sustainable practice has been shown to affect talent acquisition and hiring too. Research has found that improved brand image makes it easier to attract new employees to a business. 76% of millennials consider a company’s social and environmental commitments when deciding where to work and 75% would stay for less money, if they worked for a socially responsible company. This kind of retention is a cornerstone of success and healthy work culture, and the cultivation of engaged and passionate employees protects the longevity of an organisation while driving it toward future success.
Sustainability drives purpose and passion. Deloitte found that 73% of employees who feel that they work for a purpose-driven company said that they are engaged with their job. People want to be part of something good and something bigger than themselves. They want to feel great about what they do every day. When employees are fully engaged, they give more and the company gets more. This serves to emphasise why incorporating sustainability into a business can prove so effective in the long run.
LOOK TO THE FUTURE
Companies which feel sustainability is something they are required to do to keep the board happy are missing out on an opportunity to be a part of a generational change in mindset. Customers, employees and even investors are all keen to interact with brands that reflect their environmentally friendly goals in a positive way. This opens a door not just for new businesses looking to enter the market, but also offers more established organisations a chance to rethink their position and update their strategy to make it more relevant to their target market. In both cases, the end result is a healthier bottom line.
Businesses just need to keep in mind that customers want more than words, they want to see real momentum towards a more environmentally friendly future. To make certain adopting sustainability is a success, organisations need to ensure it is included at the start of any new processes and that commitments are followed through. With that in mind, a mountain of opportunity for growth is out there for businesses to tap into.