The importance of incorporating sustainability in business
As the global climate crisis continues to grow in popularity and peril, the shift towards businesses choosing to implement sustainability strategies is becoming increasingly apparent. Whether it’s government subsidies or consumer demand, sustainability and its initiatives are taking over the corporate world. With companies like Apple pledging to go carbon neutral by 2030, why is this extra step becoming a necessary one?
As Forbes and NielsenIQ reported in 2021, 81% of global consumers feel strongly that companies should help improve the environment. Eager consumers are even willing to switch and pay more for sustainable options the same study shows. Although younger generations are the most vocal about their environmental activism, it’s clear that across the board, the buzzing topic of sustainability is sure to catch everyone’s attention. This inherent connection between humans globally means new talent and innovative opportunities are likely to gravitate with the growing consumer opinion as well; towards companies who choose to take on green initiatives. The competitive advantage a company can attain by meeting the consumer’s sustainability demand, is a long term investment that’s hard to pass up.
The social aspect is the most immediate and accessible part of implementing a sustainability initiative. However, the deeper, more meaningful, change will occur when the company’s environmental and economic impact is honestly addressed, reported, and managed. McKinsey Sustainability, who conducts the ESG (environmental, social, and governance) survey, reported the trend of strong ESG value relating to higher financial returns and lower downside risk. Inner company workings such as energy consumption, materials, water intake, are capable of creating a circular economy within the business and community if well managed and environmentally optimized. Especially when considering the long term success of the company. Using high efficiency materials and limiting resource use is a way to not only reduce costs across the company but subsequently improve the overall manufacturing process.
A popular quote that floats around when discussing corporate sustainability is ‘90% of executives believe sustainability is important, but only 60% of organizations have sustainability strategies, and merely 25% have sustainability incorporated in their business model.’ Sustainability in business is an ever growing topic and businesses that choose to opt out may begin to experience the side effects, including pushback. In the modern age, many investors are reviewing analytics and favoring those with sustainability strategies; forcing those without any to fall into a shrinking minority that must now overcompensate in other areas. Moreover, if the social media route is taken, those online who are eager to virtue signal and keep others accountable will not hold back and may stir bad press. It’s evident the social climate will not return to its once mass disregard for the environment, so why operate your business as if it will?
At AMBS, we recognize the importance of sustainability within the modern corporate world. For this reason, we offer the Sustainability and New Economic Models (SNE) Program designed for you to learn about a new economic model that is beneficial for everyone, including the environment. Discover more here.
- Rafi, Talal. “Council Post: Why Corporate Strategies Should Be Focused on Sustainability.” Forbes, Forbes Magazine, 12 Sept. 2023, www.forbes.com/sites/forbesbusinesscouncil/2021/02/10/why-corporate-strategies-should-be-focused-on-sustainability/?sh=4909468a7e9f.
- Chladek, Natalie. “The Importance of Sustainability in Business: HBS Online.” Business Insights, President & Fellows of Harvard College, 6 Nov. 2019, online.hbs.edu/blog/post/business-sustainability-strategies.
- Unruh, Gregory, et al. “Investors Care More about Sustainability than Many Executives Believe.” BCG Global, Boston Consulting Group, 14 Sept. 2022, www.bcg.com/publications/2016/sustainability-strategy-investors-care-more-about-sustainability-than-many-executives-believe.
- Bonini, Sheila, and Steven Swartz. “Profits with Purpose: How Organizing for Sustainability Can Benefit the Bottom Line.” McKinsey & Company, July 2014.