Often, the motivations given to businesses for engaging in sustainability efforts are social and environmental. While these big-picture justifications are important, a business might have more important questions – in particular, what the direct benefits for the company are. Indeed, investing in sustainability can have fantastic benefits for any company, most directly from the savings in cost and enhanced brand reputation that result from sustainability work.
Reduced Operational Costs
By reducing reliance on damaging fossil fuels, and reducing energy use wherever possible, a company can both help the environment and cut down on energy costs. Similarly, reduced waste can include and motivate the more efficient use of materials, which will reduce spending on, for example, paper, while also avoiding the associated costs for disposing of excess waste. In sustainability terms, these changes are some of the easiest to implement, and bring the most direct benefits.
Consumer & Investor Preference
There’s a sizeable portion of most demographics that will prefer to use a company that makes use of good sustainability practices. In fact, surveys from McKinsey show that 87 per cent of consumers are concerned about the environmental and social impacts of the products that they buy. The enhanced brand reputation that comes from a public sustainability effort can help to drive preference from environmentally-minded consumers and clients.
In addition, investors are increasingly looking to environmental factors when choosing investments. The availability of ESG indicators on platforms like Bloomberg have led to sustainability reporting frameworks becoming important tools for informed investors. As a result, environmentally-friendly companies could also get added support from socially responsible investors.
Particularly with the new generation of workers, employees want to work for companies they can feel proud to be a part of. Investing in sustainability, and engaging enthusiastic employees in the process, can help to boost satisfaction among your workforce. More engaged, and satisfied, employees often have higher productivity and are less likely to look for work elsewhere. In addition, comprehensive sustainability practices can attract prospective employees. One bit of advice is to engage employees in how much impact the effort is having – let the entire company be proud of improved numbers, both environmentally and financially.
While a large part of the motivations behind company sustainability are its social and environmental benefits, these benefits can very effectively create trickle-down benefits from a business perspective. By engaging in sustainability practices, a business can reduce costs, bring in more customers, and boost employee motivation, among other benefits. That’s the business case for sustainability – along with reducing the impact of your business on the environment, you can look to see improved performance across a wide range of factors.