How sustainable is your business?
Whether it’s Greta Thunberg in social media, Green New Deal debates or climate protests, nature documentaries, or freaky hot summers, it’s impossible to avoid. Sustainability is top of mind and is undoubtedly the biggest challenge of our times. How is your business contributing? Below are some thoughts on the shift needed in sustainable business practises and in pink the implications for your business.
A shift in business is needed
The worldwide depletion in natural resources, such as water, land, insects, combined with stronger regulation and increased consumer focus on sustainability mean we need to change how we’re doing business across industries. Beyond storytelling, sustainability can be and needs to be a catalyst for real change. Conscious consumers will expect companies to make a positive impact, and to go beyond CSR reports and damage minimisation. The role of business is to build value, and value perception will be built through financial impact combined with positive cultural, environmental and social impact.
Helping customers make a “better choice” is already the new luxury. But also an opportunity for business development reducing costs, reaching new audiences, increased perceived value and for innovation in the form of newsworthy products and new business models.
Sustainability as an opportunity
- Higher prices: According to a recent Nielsen report, 66 percent of global consumers are willing to pay more for goods coming from companies committed social and environmental sustainabililty. For Millennials, this rises to 73 percent!
- New potential customers: Public concern about climate change has prompted consumers to swap brands, with 36% of people saying they’ve switched to more sustainable products. Meanwhile, 49% of women and 37% of men are considering swapping a brand for one which has less impact on the environment. (Kin & Co)
- Engaged loyal employees: 67 percent would also prefer to work for a socially responsible company (Nielsen). 13% of millennials considering leaving their current employer to work somewhere that is doing more to tackle climate change. (Kin & Co)
Take a good look in the corporate mirror – beyond CSR reports and “green” products, is your business good for people? Is it good for the planet? If it is, how can you improve the impact further and inspire other companies or stakeholders? If it isn’t, then you need to seriously consider the level of risk.
A green wave of conscious consumers is coming
There’s an increased awareness of resource scarcity, climate crisis and global heating, thanks to social movements such as Fridays for Future lead by Greta Thunberg or Extinction Rebellion. The language news media are using is even evolving to reflect this. Conscious consumers will now not only vote with their wallets and choose socially and environmentally responsible products and services but also at the ballot box. Green parties across Europe increased their number of seats by 40%, almost doubling in Germany, tripling their share of the vote in Ireland and will hold the balance of power. This will mean that the international climate agreement COP21 and the UN Sustainable Development Goals from 2015 will impact the regulatory landscape. This will increase the demand for low-carbon solutions and have broad implications for companies.
How would your business be affected by a carbon tax? What other potential regulatory policies would drastically affect your business? What could you test today to improve your impact and pro-actively minimise risk tomorrow?
Green Technologies building sustainable value
Technological innovations are enabling new more sustainable value creation. This is creating opportunities for established companies to transform how they do business. One example is the energy transition toward renewable, generating more electricity than coal during April 2019 for the first time in USA, tripling in capacity overtaking that of fossil fuels for the first time in UK and countries like Costa Rica leap frogging to run on renewable energy for 300 days per year.
Is there really any reason for companies not to run on renewable energy? Have you measured the real impact of your business? How can we minimise damage of our business today? How can we redesign our business for tomorrow?
Digital platforms disrupting traditional industries
Digital platforms are lowering barriers of entry for social startups. Apps and digital services such as Karma or Voi are redefining the way we move or eat, disrupting much larger established industries such as food retailers or taxis. Even how we work is rapidly changing with cloud-based digital solutions enabling us to work from home, reducing stress, wasted time and environmental impact of city commuting.
Do you truly understand digital disruption? Even if startups are small, they can adapt fast and shift consumer expectations. Could you shift from product sales to service solutions using digital solutions, increasing profits, while minimising our impact? Could you explore innovative partnerships?
Is sustainability at the heart of your brand and business strategy?
Most business leaders know that how they respond to the challenge of sustainability will affect the competitiveness and perhaps even the survival of their organisations. There are also calls for businesses to do more to combat the issue as two thirds (60%) of Brits believe the responsibility of climate change sits with CEOs. Some 59% of respondents would like their favourite brands to declare a climate emergency, yet 90% of businesses don’t have a clear plan in place to tackle climate change. Yet most are stuck in business-as-usual chasing sales, while launching a bunch of random initiatives without any over-arching plan.
Sustainability risks cannot sit in a separate CSR silo – they need to be assessed and mapped out at the same level as other strategic or operational risks. It has the potential to affect your prices and costs, your production, employee retention, customer acquisition and your competition. However, if you take sustainability (people, planet and profits) seriously, beyond damage minimisation, it is an opportunity to invest in. Then, you stand a chance of transforming your business for the future.