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A growing number of companies are beginning to see the benefits of sustainability in their business strategies. As the Harvard Business School puts it, today’s organisations have the potential to “do well by doing good.”
According to a study by McKinsey, 70% of companies say that they already have a formal governance strategy for sustainability in place. As younger generations continue to prize empathy and environmental friendliness in their chosen brands, the demand for sustainability is set to increase.
But what is sustainability exactly, and what does it mean to your company?
Business sustainability refers to the impact that your company has on both society and the environment. When you become a sustainable organisation, you consider the effect that your actions have on not just your bottom line, but the community and country that you operate in. If your business sustainability strategies are successful, you can actively have a positive impact on your environment, while doing your part to reduce issues like global warming, inequality, and social injustice.
Why is Sustainability Important in Business?
The most apparent benefit of sustainability is that you help to address some of the global challenges that threaten the quality of life for future generations. However, studies show that sustainable practices can also increase your chances of corporate success too.
Many modern investors use environmental, social, and governance measurements to decide which businesses they should be spending money on. Additionally, studies indicate that the brands with the highest ESG ratings can have the best financial performance. One report from McKinsey found that the main reasons to take part in a business sustainability initiative were to:
- Increase affinity with customers through shared values
- Develop new growth opportunities
- Improve brand reputation
Business leaders from all backgrounds are starting to see the benefits of business sustainability strategies. 62% of executives think that a sustainability campaign will be crucial to remain competitive in the current environment. As expectations on how businesses should behave continue to evolve, customers are increasingly drawn to companies that take their impact on the world seriously.
Research conducted by Unilever in 2017 found that a third of customers prefer to buy from brands that they believe are having a positive impact on the environment or society. Additionally, a little over a fifth of all consumers would actively choose a company with the best sustainable credentials – even if that company’s products cost more.
As reports into the dangerous state of the environment continue to shock the planet, it’s likely that consumers will continue to place sustainability at the top of their list of considerations when deciding who they should be doing business with. This is particularly true as younger generations continue to take over the marketplace. For a little while now, millennials have been supporting the sustainability trend by deliberately spending more on companies with an environmental strategy. As Gen Z prepares to become the largest consumer market in 2020, the studies show that they will continue to increase the demand for sustainability with their shopping habits.
Studies have found that 72% of Gen Z customers would spend more on a service if it were sustainably produced. What’s more, Gen Z isn’t nearly as concerned with brand loyalty as millennials and older generations. These customers have no problem seeking out alternative sustainable products if their favourite companies fail to hit the market.
The Implications of Sustainability for Small Business
Small businesses have just as much of a role to play as large multi-national corporations when it comes to ensuring that they take a sustainable approach to their operations. According to the Federation of Small Businesses, the annual turnover of SMEs in the UK was £2 trillion, which accounts for about 52% of all private sector turnover in the country.
Unfortunately, many leaders in small businesses struggle just to keep the doors open in today’s competitive environment. With so many new companies opening both online and offline at a rapid pace, adding sustainability to the mix can be a difficult concept for smaller organisations.
One report issued in 2018, small businesses do have a passion for sustainability, but they may struggle to implement the right strategies for success. While 88% of the respondents in the study said that they value sustainability, another 70% said that they have a hard time making their initiatives work.
There are challenges for small businesses to face if they want to bring sustainable practices into their organisations. For instance, working with sustainable suppliers often costs more than working with traditional providers. Additionally, it can be difficult to source the materials required to create a more sustainable product. Other challenges include:
- Not having enough time to make significant sustainable changes: The key to success here is often focusing on a few small changes at a time, rather than attempting to do everything at once. A complete sustainability overhaul may take months or years to implement.
- Struggling to engage employees: Businesses, both small and large need to make sure that their team members are committed to taking part in their sustainable initiatives. If your employees aren’t engaged, your campaign won’t survive
- Being unsure how to get started: Smaller companies sometimes believe that they need to make vast differences to their operations to get involved with sustainable practices. However, sometimes something as simple as switching to paperless communication (Replacing fax and letters with email and instant messaging) can be enough.
- Lack of support: Smaller businesses need to make sure that they’re working with the vendors that can assist them in making their sustainability initiatives a reality. This means choosing companies with their own sustainable practices and a range of environmentally-friendly services.
However, if smaller companies can get over the initial roadblocks that prevent them from taking a sustainable route, the benefits can be huge.
Smaller businesses have the potential to obtain more opportunities through commitments to sustainability in the long-term. For instance, IBM currently requires all the suppliers that it works with to adhere to a specific set of procurement rules. These rules suggest that suppliers will need to establish voluntary goals for their sustainability initiatives and publicly disclose their results.
Going forward, small companies that want to work in tandem with bigger brands will need to prove that they’re willing to take the same sustainable measures delight and attract their customers.
What’s more, for smaller businesses, business sustainability strategies could make it easier to keep on top of costs in the long-term. Many experts believe that energy prices will continue to rise in the years ahead. These costs have the potential to add to the increasing expenses of running a business. According to the EPA (Environmental Protection Agencies), companies can increase their energy efficiency by up to 20% and reduce costs significantly just by adopting new cost-effective policies and practices.
The Benefits of Sustainability Strategies in Business
As challenging as the concept of sustainability may be at first, it’s more than just a trend in the current corporate landscape. Businesses of all sizes are starting to move towards sustainability as a holistic, long-term approach for their future.
By embracing the concept of “people, planet, and profit” in your organisation, you can set yourself up with long-term benefits that could ensure your company stays running smoothly for as long as possible. Here are just some of the most significant benefits of business sustainability.
Today's employees are often more efficient when they have the freedom to work remotely. Click To Tweet
1. Improve Brand Image
There are about 5.7 million small businesses in the UK alone. If you want to stand out in this cluttered landscape, then you need to show your customers that you have something unique to offer. Being a sustainable business can significantly improve your brand image and give you another point of differentiation to separate you from the competition.
The National Marketing Institute found that over 50% of customers take a company’s environmental strategy into account when making buying decisions. Today’s consumers want to know that the purchases that they are making are doing something good for the environment, or society as a whole. Let your audience know that you’re making a difference, and your chances for sales and brand affinity will skyrocket.
2. Minimise Costs and Increase Production
The way your company handles things like water, energy, and waste can also save you some overhead costs too. If you replace your standard lighting in the office with more energy-efficient lighting, then your energy bills will go down significantly. Similarly, allowing your employees to work at home over cloud computing resources ensures that you don’t have to spend as much on physical real-estate.
The smaller your required office space is, the less you need to spend on things like rent, energy, heating, and other common overheads. At the same time, you benefit from a more productive team, because today’s employees are often more efficient when they have the freedom to work remotely.
3. Improve Employee Retention and Recruitment
Speaking of employees, the most talented staff members in the world today don’t’ want to work for a good wage alone. High-performing employees are attracted to organisations that are making a difference in the world. If you’re going to attract and retain talent from the millennial and Gen Z demographics, then you’ll need to be able to show your future candidates that you’re giving something back to the community.
Additionally, sustainable business practices could make it easier to retain the employees that you attract into your team too, by allowing you to consider alternative work schedules for your team members. An environmentally-friendly approach to operations that enable employees to use their own devices through BYOD policies, and work at home on certain days will appeal to the people who want more work/life balance from their careers. These initiatives will also ensure that you can recruit more talent from overseas, meaning that you’re not limited to trying to find the right skills in a specific geographical area.
4. Ensure you comply to regulations
With concerns like climate change, limited water, and global warming to consider, many countries are beginning to impose regulations on businesses to help save the environment. In the years to come, likely, being sustainable won’t just be a choice that companies can make – it will be a crucial part of running a successful company.
When it comes to making your organisation “future proof,” it’s important to think not just about the technology that you invest in and the skills you teach your employees. Businesses will also need to consider the social and economic measures that they need to put in place to protect themselves from hefty fines in the future.
5. Attract More Funds and Investments
Finally, investors are also beginning to recognise the value in companies with sustainability strategies. As it becomes more evident that today’s customers want to buy from businesses that care about the environment, people with money to put into companies realise that they’ll get a bigger return if they look for people who put the environment first.
A study conducted by Goldman Sachs in 2017 found that companies known for their advanced social media policies are surpassing general stock market entries by 25%. Additionally, 72% of companies with business sustainability measures are also out-performing their competitors.
Advanced Business Sustainability Strategies for Your Small Company
So, how do you start the process of going green?
Everyone takes a different approach. For some businesses, it will be as simple as changing your business model to use less paper. For other companies, it may help to completely transform the way that you run your organisation by exploring the benefits of things like remote and flexible working. Here are just some of the best options to consider.
1. Use Less Paper
Let’s start simple. Sometimes, the easiest way to begin going green is to reduce your reliance on natural resources. Using less paper is a fantastic way to encourage environmental sustainability throughout your enterprise. All you need to do is switch your paper files for cloud networks where you can safely store your equipment online, rather than relying on a physical storing system.
Going paperless is an excellent way to save the environment, but storing your data on the cloud can help your business in other ways too. For instance, when it comes to finding personal customer information for GDPR purposes, the cloud is far more searchable than a paper storage system. This will save your team a lot of time and reduce the risk of compliance issues. Additionally, when you store your information on the cloud, you can share it with your employees wherever they are, without having to make copies. That means even less paper waste. On top of that, cloud-based content is protected by various redundancies, so you don’t risk losing your compelling content if there’s an issue in your data centre or a disaster at your office.
2. Create a Robust Recycling Program
Another simple way to improve your business sustainability is to make sure that you have a great recycling program in place. Begin with things like paper and card – about 50% of all business waste comes from that area. From there, you can branch out to recycling things like old computer and PBX systems too. Many vendors of new technology already have recycling strategies in place to help you replace your aged legacy equipment without harming the environment.
For instance, if you decide to replace your existing communication stack with more software on the cloud, this leaves you with a lot of hardware to get rid of. Since plastic and metal don’t merely break down naturally, you need a reliable and safe way to dispose of them. Make sure you know how you’re going to get rid of your old technology without causing extra problems with the planet. Alternatively, you can consider using your old legacy systems alongside new technology if you invest in an interoperable solution like RingCentral Office. This means you get the most out of your existing investments while reducing your reliance on old systems too.
3. Look for Energy Efficiency Opportunities
You may be surprised at how many easy options there are for business sustainability already in your company. All you need to do is look for opportunities. For instance, you can cut a lot of utility costs by merely replacing old-fashioned light bulbs with energy-efficient LED. Investing in energy-efficient new technologies is a sound investment for any modern brand.
Cutting down on the amount of energy you use around your office not only makes you more sustainable and slashes your carbon footprint, but it also contributes to reducing overheads too. The less you spend on devices that consume a lot of electricity, the less you’ll need to spend in the long-term. You don’t need to replace all of your office equipment at once. You can start with your lighting and air conditioning, then move onto your computers and PBX systems over time.
4. Allow Employees to Telecommute
Perhaps the best way to make a massive change to your environmental sustainability is to implement a flexible working strategy. Allowing your employees to work over a cloud network, rather than coming to the office means that you can save a fortune on everything from on-premise technology to overheads like electricity and heating. Online meetings at a distance also mean that you don’t have to pay for your staff to travel large distances to connect with other people around the world.
Aside from promoting sustainability in business, the other benefit of allowing employees to work from home or telecommute is that they often achieve better productivity and workplace satisfaction. When team members have the freedom to work outside of the office, using their own devices and equipment, they’re more likely to stay with your business for longer, reducing the hassle of constant turnover.
5. Encourage Carpooling
Carpooling is another excellent way to promote a sustainable atmosphere in your business. If your employees are already working remotely some of the time, you can cut down the amount of damage they do to the earth when they come into the office by asking them to share a car. You might even offer incentives for carpooling, like giving people more time off if they’re willing to commit to a carpooling strategy or allowing them access to more flexible scheduling.
Help your team members to set up their carpooling strategy so that they have a way to manage who will be driving on specific days, and how employees are going to be collected from their homes. This will reduce the number of vehicles on the road, improve the quality of the outdoor air, and potentially even improve the relationships between your staff members too.
Create a Sustainable Development Policy
Becoming a sustainable business doesn’t have to be as tricky as it seems.
As with all transformation strategies, sustainability starts with the right plan.
Begin by thinking carefully about the things in your business operations that are contributing most to issues for the environment. Are you still relying heavily on paper documents? Do your employees have to drive long distances to work each day?
If you need a little help planning, the Environmental Protection Agency offers a checklist strategy here that you can check out. By examining your current environmental strategies and setting goals for your future, you can ensure that you create a policy that helps your business to make a measurable difference.
Make sure that all of your team members understand the purpose of your environmentally friendly policies, and that you have people in your business that can help to promote the new plan. Maybe you can find some environmental advocates in your workforce that will help to keep other members of your staff informed and motivated?
Once your policies are in place, tell your team members about the rewards you have in place for people who follow the rules, and the potential repercussions for people who ignore the policies. Remember to put metrics in place so you can measure your outcomes over time too. This will help you to make valuable adjustments to your plan if necessary.
Time to Embrace Environmental Sustainability Strategies?
Going green is no longer just a popular trend for companies.
If you haven’t taken the initiative to embrace environmental sustainability yet, then you could risk losing the respect and attention of both your target audience and future employees.
A sustainability strategy can help you to improve your reputation in your chosen industry, attract more customers, and maintain better profit margins. At the same time, implementing environmental strategies like remote working over the cloud means that you spend less money on everyday overheads, travel, and even employee turnover. At the same time, you benefit from better redundancy for your business information, more satisfied employees, and even greater efficiency.