Most of us know we need to be more sustainable and energy-efficient if we’re to slow down climate change and reverse its effects. Yet, there are still many who believe the effort to be sustainable in business is too substantial.
It’s a modern problem. Some employees and some managers see the importance of making businesses eco-friendly. Whereas others are so busy with running the company, keeping everyone in employment and meeting their many other responsibilities that, although they may wish to be operating more sustainably, they lack the time or energy to make it happen.
Often business partners, managerial teams and board members find themselves disagreeing over whether being eco is in their interest.
It’s completely understandable. Becoming more sustainable is often a goal that moves further and further down the to-do list because the day-to-day operations of running a business are huge and demanding. However, the question we have to ask is, can we afford not to focus on sustainability?
If you’re trying to encourage fellow business leaders to adopt better environmental practices then you need to be able to demonstrate how good being eco-friendly can be for the company itself. How it can be a key part of reducing everyday business pressures. After all, making business more sustainable can be key in cost-cutting, improving efficiency and propelling a company forward.
Let’s look at five benefits of making a business more sustainable and how we might use these to get the whole company on board:
Brand Reputation
Generation Z are becoming known as the sustainability generation and it’s not surprising. They have grown up around conversations about climate change and they were severely impacted by the pandemic which has led them to engage more with the environment they are growing up in. Tech-savvy, Gen Z are also good researchers and know how to use the internet to check on a brand's credentials and double-check their eco-friendly claims.
According to research by First Insight, 73% of Gen Z shoppers are willing to pay for sustainable products. PwC recently found that 77% of consumers are influenced by a company’s environmental record when making purchasing decisions.
Social media has lifted the curtain and consumers are now seeing and are engaged with what happens behind the scenes. It has changed the way we perceive brands - the services we use and the products we buy. For example, many consumers don’t simply select their coffee brand based on which tastes the best but also on where it comes from, whether the company practice fair trade, what they are doing to protect the environment and how eco-friendly their business practices are. Consumers know more now and they can get to know a brand not just by what they do but also by how they do it and why.
A good reputation is not just a business benefit, it’s essential. Greenwashing, though, won’t wash with Gen Z and could do you more harm than good. Businesses who falsely claim green credentials are likely to be called out and misleading consumers not only risks attracting the attention of the ASA, it can also lose you customers and severely damage your brand reputation.
However, if you can go greener, and find ways to promote this factually and with transparency, then it could earn your company some positive publicity. Increased exposure, raising the reputation of the brand and creating more positive company content online are key points to raise when persuading business leaders that sustainability is worth the effort.
Talent Attraction And Retention
We know that Gen Z care about the environment. That company values are important to them and that they prefer to align themselves with brands and organisations striving to have a positive impact on the wider world. Therefore, it will come as no surprise that this is a huge factor in where Gen Z choose to work.
Companies who carry a large carbon footprint or whose values are ambiguous or questionable are struggling to attract talent to their organisations and this is only likely to get worse.
Generation Y and Z don’t just care about the environment, they feel a personal responsibility, believing the burden of environmental action falls to them. A survey by Bupa found that 63% of both Gen Z and millennials reported feeling the burden of climate change.
- 31% would turn down roles in companies with poor ESG credentials
- 54% would take a pay cut to work for businesses that reflect their values
- Around half of the working population said they’d be more engaged with their organisation, more productive and more satisfied in their jobs working for businesses that have strong environmental and social commitments
Businesses looking to the future need an engaged workforce and the generations entering the workplace now have an abundance of skills, especially in technology and digital communication. Therefore, we may not only begin to align company values with those of employees and future employees but also include staff in forming and delivering on these commitments.
Some businesses don’t believe they can become more sustainable because business leaders lack the knowledge or time to research ways to reduce their company’s carbon footprint. Gen Z could provide the answer.
Cost Saving
Probably the best way to win over sceptical business leaders in the argument for business sustainability is to point to cost savings. Reducing energy usage, cutting down on company travel and addressing wastage are key areas that don’t only help the environment and reduce your carbon footprint but also save organisations money.
Admittedly, there is often initial spending involved. When Tescos invested in LED lighting, better refrigeration systems, smart building management systems and energy-saving technology there was a need to find the budget to implement these changes. However, by 2020 Tesco reduced its energy usage by 41% per square foot saving £200 million in energy spend annually. So, being environmentally friendly can help companies to save both energy and money which opens up the potential for long-term sustainable growth. Perhaps some of those cost savings can even go towards environmental projects that can contribute to offsetting the business's carbon footprint.
Opening Up Trade
Many B-Corps and companies who have made strong environmental commitments will not work with other businesses who do not have sustainability policies in place, or who carry a large carbon footprint. When companies look at their carbon footprint and ethical responsibilities they won’t only focus on themselves directly, but also the impact across the whole supply chain. It’s ever likely that sustainable supplies will become preferred suppliers and those who are considered a negative impact on an eco-conscious supply chain will be rejected.
Regulatory compliance also needs to be considered. Many countries and trading bodies now have regulations and standards that businesses need to be meeting to trade with them. It’s likely that increasing regulations and minimum carbon impact standards will be applied as businesses, and whole countries even, strive to become carbon neutral. Therefore, failing to adjust could limit a business's ability to compete and grow in a changing marketplace.
Future Thinking
Good business leaders are able to deal with issues and promote growth in the present but great leaders plan for the future. More than anything else, the biggest reason for businesses to be sustainable is to protect their own future, because if we don’t look after the planet then there is no future for our businesses. If we allow the climate crisis to continue then we’ll face financial crashes, mass displacement of people, extreme weather and many more negative changes that could destroy businesses and livelihoods too. If people struggle to afford food, they won't be buying luxury goods. Food cannot be packaged and sold if it cannot grow. Travel and leisure may not be possible in much of the world as temperatures become extreme and other businesses will not be in a position to work with suppliers if their businesses are struggling.
The health of the planet will not just affect a few unfortunate people in certain parts of the world. The effects will spread and businesses will be severely impacted. So, whilst there may appear to be more important things for companies to focus on now - things that keep them in profit - operating sustainably should be a priority for every person and every business. The future of business depends on many things but most of all it is dependent on the future of the planet.
How though, can this be communicated to decision-makers in businesses? Perhaps we should be approaching it the way we measure other potential threats to a company’s ability to thrive. With a risk assessment. Carrying out a risk assessment based on the effects a changing environment may have on operations, safety and profitability could persuade a board, influential executives, or even small business owners to make adjustments to the way they operate. Maybe it will make making changes seem like a drop in the ocean but, if we all do it and if we all encourage other businesses to do it then we can be a force for good and a force for change. Not because we’re jumping on the 'eco bandwagon' but because it is the only way to ensure our business's survival.