Importance of Sustainability for Businesses
Why businesses must invest in sustainability?
Sustainability has grown to become a more important concern today than it was three decades ago. More and more businesses have now started concerning themselves with sustainability and its benefits. Overall, along with CSR, it has emerged as one of the most dominant themes in the business world in the 21st century. When it comes to the long term success of businesses, sustainability has become a key ingredient.
Now, even the reputation of the businesses is at stake. It is not just about being environment friendly, even the investors and shareholders are interested in the companies that invest in the environment. The businesses that were the first to take steps in this direction have already started reaping the benefits of being sustainable. Being sustainable means you are not concerned only for profits but you also worry for the environment and the community’s welfare.
Businesses must have a sustainability strategy before they start. From planning to practice, a lot of time and efforts are required. The best strategies must be adopted after careful consideration. Businesses must opt for a strategy only after analysing their operations and measuring performance. However, the most basic thing to do to make real progress in this direction is to establish a culture of sustainability. Several factors need to be considered and evaluated prior to starting. From capital resources to staff and specialized skills, all these factors re important for successful execution of a sustainability strategy. After having selected a strategy there may be a need to update the policies and procedures accordingly for successful implementation. However, the best thing is that its profits are real and sustainability is worth the investment. Several big brands have already proved it. There are real benefits in terms of cost savings, increased reputation as well as environmental protection.
There are both direct and indirect benefits to be obtained from sustainability. The direct benefits of sustainability can be felt in terms of cost savings, increased efficiency, better human resource engagement as well as other forms of business benefits. It is going to provide benefits any way, whether you invest in technology that is less dangerous to the environment or whether you choose to make improvements to projects and processes so they consume less resources and are more efficient. Several companies have been able to rescue their carbon footprint by investing in sustainability and several have reduced their consumption of energy leading to reduced costs and lower impact on the environment. There are other benefits too of having a culture of sustainability. It reduces the number of accidents and injuries at workplace and also engages staff better. Apart from that businesses that have invested in sustainability enjoy better reputation and their risks of negative public opinion are also reduced. So, apart from improvement on environmental and operational performance metrics, improvement can also be seen in terms of the social metrics.
Companies that have focused on sustainability are also doing better financially. Research has shown that they have been able to create higher profits and better respond to shareholder concerns. These businesses have been able to create social value by investing in the creation of a sustainable society. Such companies have also been able to derive higher employee commitment as well as created better customer loyalty. In the long term such businesses are bound to perform better as they have created an image of a credible business in the eyes of the society. Sustainability is both a wise step for businesses as well as a responsibility. Climate change is a major concern globally and addressing it is not possible without the concerted efforts of the businesses. Businesses have both enough reasons and motivation to invest in sustainability.
Sources: Is sustainability now the key to corporate success? (Robert Eccles, Ioannis Ioannou, and George Serafeim for the Guardian Professional Network)