How Sustainability Increases Business Value

Why is sustainability in business important? The climate crisis is already affecting our lives; we’re seeing the loss of sea ice, melting glaciers and ice sheets, sea level rise, more intense heat waves, droughts, wildfires, and extreme rainfall. Not only do these issues put people’s lives in danger, they have economic costs, too. The consequences of climate change will only continue to worsen over time and pose threats to our lives, economies, and other species on Earth. Businesses have a responsibility to do our part in the fight against the climate crisis.

Idealism isn’t the only reason we should act - there are pragmatic reasons as well. Did you know that 77% of consumers are looking to shop from brands that care about the environment? Consumers are demanding that businesses ditch the single bottom line and adopt the triple bottom line: people, planet, and profit. The best sustainability initiatives react to this demand by engaging customers in a way that they immediately resonate with and understand. We plant verified trees to sequester climate-warming emissions because it’s a tangible, transparent, and easily understood solution. Embracing this paradigm shift and adopting sustainability initiatives can bring about positive outcomes for your business, as well as the planet.

The Benefits of Sustainable Business Practices

1. Reduce Costs

When most people think about sustainability they immediately think of extra costs. However, incorporating sustainability can actually save your business money. Adopting energy efficient lighting practices can cut your energy bill as well as your carbon footprint. Focusing on finding ways to use your materials more efficiently and reducing your waste output can save you money on material and waste management costs. Installing solar panels, while requiring upfront investment, can save the average commercial property owner about $500 per month, and most businesses pay off the system in five to seven years.

2. Increase Bottom Line

According to the Capgemini Research Institute’s latest report, 73% of organizations that implemented sustainable product design strategies have seen improvement in revenue growth. Research and consulting firm IO Sustainability found that companies that have CSR (corporate social responsibility) programs embedded into their operations enhance sales by as much as 20%.

3. Improve Reputation

IO Sustainability also found that those companies with CSR integrated into their operations can create a "reputation dividend' worth up to 11% of market capitalization. Patagonia has made sustainability a core part of their business strategy and was ranked first in a 2021 survey to determine the most top-of-mind brands for reputation to U.S. consumers.

4. Gain Competitive Advantage

S&P 500 companies with sustainability incorporated into their strategies see an 18% higher ROI compared to those that don’t. Planning for climate change is now a necessity, and those who don’t will likely lose their competitive edge and fall behind. Additionally, identifying like-minded organizations and influencers and partnering with them can lead to a greater overall impact.

5. Acquire Better Talent

A report from IBM found that two out of three respondents are more willing to apply for (67%) and accept (68%) jobs from organizations they consider sustainable. Having sustainability initiatives can attract great talent, but it’s also important to stay open to new ideas. 74% of people who thought of their employer as sustainable said they felt encouraged to pitch new eco-friendly initiatives, compared to only 54% who don’t. Opening lines of communication and highlighting what you’re currently doing can improve employee loyalty and boost morale.

6. Get a Boost on Social Media

Did you know that 3.6 billion people are active on some form of social media? And with all of those users comes competition for their attention. Sustainability is a hot topic online and discussing your efforts in this area can result in a serious boost in engagement. According to Meta’s 2022 report on sustainability trends, business posts had 4.2x more engagement when they contained sustainability-related hashtags and 10.8x more engagement when they contained eco-friendly hashtags. Specifically for eCommerce brands, posts discussing sustainability received 7.7x more interactions than other posts from eCommerce brands.

7. Attract Investors

According to a report from Gartner, 85% of investors considered ESG factors when making investments in 2020. That number will likely only increase over the next few years as ESG becomes more and more popular. Infusing sustainability into your business includes risk management around the impacts of climate change. Both banks and investors often consider this factor when deciding to lend or invest.

8. Improve Customer Satisfaction and Loyalty

According to a survey by TELUS International, the top reason Americans speak negatively about a brand isn’t due to a bad experience with a product.; it's a negative customer experience. Creating positive customer experiences is key to establishing brand loyalty and creating favorable word-of-mouth. Forbes found that 90% of customers say they will stay loyal to a brand that shares their values. And as sustainability only continues to rise in popularity, more and more consumers will hold sustainability as one of their values. 65% of Millennials and 49% of Baby Boomers say that environmentally friendly products and strong ESG policies influence their brand loyalty.

Ways to start your sustainability journey:

• Start recycling
• Encourage green commuting
• Offer remote work options
• Ditch paper and go digital
• Create a sustainability committee
• Rethink packaging and shipping
• Buy green electricity
• Install solar panels
• Use recycled, recyclable and/or biodegradable materials
• Make charitable donations
• Plant trees with Ecodrive!