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Sustainability has never been so important for businesses. Reduced consumer demands and limited transportation in 2020 have created an increasing public awareness of the dangers of climate change and other pollution. Companies are now creating sustainable strategies to compete for the increased demand for sustainable brands.
Other sustainable practices are made with the intention of reducing costs and creating more profitable opportunities for businesses. They have numerous long-term financial advantages.
Below, Andrew Richardson looks at three reasons why businesses need to invest in sustainable practices if they want to prosper in 2021 and beyond.
Improve your brand value and reputation
It’s becoming increasingly clear that consumers are seeking alternative and more sustainable options when they shop. Consumers who believe that they have a personal responsibility to maintain global temperatures and reduce pollution and waste in the environment will seek out companies that promote their brand as a sustainable business.
While it’s not only important to employ a sustainable strategy to your business, aligning this plan with your brand image allows consumers to appreciate your organization’s strong and ethical values. Sustainability is of course essential in its own right, but potential customers are now forcing the issue when it comes to business practices.
A survey by Nielsen found that 75% of millennials (aged 24 to 39) believe that they will change their purchasing habits to reduce their impact on the environment. Furthermore, 90% of this group said that they would spend more on products if they were made sustainably.
Research from NYU Stern Center for Sustainable Business found that between 2013 and 2018, 50% of consumer-packaged goods growth came from sustainably-marketed products. Companies have already begun to take advantage of the value placed behind sustainability. This trend is expected to continue.
Sustainability is an investment, but it can command high prices and drive more sales – particularly in key consumer markets. The social value of your brand is important to consumers and they want to participate in your sustainable processes by supporting businesses that share their values.
Staff retention and job attraction
Investing in sustainability is not just about the planet and your customers. Team members increasingly expect to work for a company that they think is making a difference in the world.
A recent survey found that 56% of workers believe that “ignoring sustainability in the workplace is as bad as ignoring diversity and inclusion”. Even more, 40% said that they would seek alternative employment if their employers did not engage with sustainable business practices.
Employment is one of the biggest investments a company can make, with the cost of replacing one staff member in an SME estimated to be around £12,000. Investing in sustainability can help reduce the cost of recruiting new staff and retaining your best employees.
Of course, employees want to know that their work is making a positive contribution and is ethical but they also believe that if a company cares about the environment, the business is also likely to care about their wellbeing too. Therefore, boosting staff loyalty to the brand. Just think of the impact of your staff going home and boasting about the work they are doing to friends and family.
Preparing for the future with resource efficiency
Sustainable practices also help you to keep costs down through the preparation of sustainable resources and reducing waste. Did you know that waste disposal accounts for approximately 4-5% of the turnover of a business?
This can be identified as an unnecessary cost for businesses, particularly for those who do not practice sustainable recycling or aim to reduce their waste in production or purchasing. Instead, designing products where their excess materials can be reused in different products or by creating by-products in the process, you can dramatically increase your revenue with little additional costs.
One company making a push to zero waste are craft beer brewers Sierra Nevada. The company recycles all its waste ingredients, mainly barley and hops, by sending them to cattle farms to be used as feed for livestock. All their organic waste is also composted on-site to use for the growth of their future ingredients. The company declares that they have saved over $5 million since using this sustainable practice. Of course, the practices will differ from sector to sector, however, Sierra Nevada proves that the measures can be creative and uncomplicated.
Regenerating your own products and ingredients is also a significant sustainable practice. Many sectors, particularly those in manufacturing and energy, use finite sources in production. It is known that these products will run out eventually, and their prices will increase with their scarcity. Even regenerating products can become scarce and expensive in demand and do more damage to the environment. Though wood is regenerative, deforestation is a dangerous practice. Therefore, investing sustainably means investing in your future products, not just philanthropy.
Many toilet paper companies commit to planting trees for every product bought. While we recognise this as tied in with their marketing campaigns, it must be highlighted as a suitable investment for companies that will eventually rely on these trees as production materials. This can be considered for businesses in terms of green energy and conserving water.
Investing in sustainability is investing in the future of your company. Understanding the value of reducing waste and practising regeneration is not just for the prosperity of the planet, but also for your business.
The measures to make your business sustainable are as important for your future profitability as it is for ethical reasons. To save your business from company liquidation, you must adopt new strategies to move forward in the world. Business should always be a force for good and give back to the community through employment and positive consumer experiences. Investing in sustainability is just another step to improve your business and grow your authority and revenue.
Culled From: Financemonthly
