Pause for Thought: Why it's important for businesses to worry about Sustainability?
In today’s ever-evolving world, debating whether to worry about incorporating sustainability into your business strategy is no longer an option. As more and more consumers begin to pay attention to the focus businesses put on environmental, social, and governance issues, companies across all industries are now realising the many benefits that can be had through adoption of a strong sustainability agenda.
Firstly, simply put, its just the right thing to do. Climate change is REAL and this year we have seen more frequent and intense drought, storms, heat waves (hottest summer in the UK on record), rising sea levels, melting glaciers and warming oceans. If we want to save the planet’s ecosystem we are going to have to make drastic changes now. Hand in hand with this is the fact that many consumers now look for more sustainable and ethical sourcing of products, goods and services.
Among consumers, millennials are considered to be those who are driving the sustainable movement by their lifestyle choices and behavioural changes (this “Green Generation” also claim that they would be happy to pay more for eco-friendly and sustainable services.
Secondly, adopting a sustainability strategy within your organisation has inherent business value. In the latest McKinsey Global Survey, 83% of C-suite executives and investment professionals believe that ESG programs will generate more shareholder value in five years’ time than they do today. And in Accenture’s research on responsible leadership, companies with high ratings for ESG performance enjoyed average operating margins 3.7 times higher than those of lower ESG performers. Shareholders also received higher annual total returns, outpacing poorer ESG performers by 2.6 times.
In clear terms, sustainability is a business approach to creating long-term value by taking into consideration how a given organisation operates in the ecological, social, and economic environments. Sustainability is built on the assumption that developing such strategies fosters company longevity.
Finally, with a radical shift in purchasing behaviour and new UK laws about to come into place, companies will ignore Sustainability at their peril! Not only is the UK government set to bring forward its target for reducing emissions by almost 15 years, with an aim to reduce 78% of carbon emissions by 2035, many public sector organisation are now making ‘social value’ a heavily weighted response within procurement exercises meaning that if you cannot demonstrate ethical and sustainable social values within your ‘pitch’, you are very unlikely to win any public sector contracts. (https://www.crowncommercial.gov.uk/news/social-value-procurement-ccs)