The reasons can be wide-ranging, such as increasing profitability or making a positive impact on the environment. Whichever may be, implementing sustainability practices is an option that significantly contributes to business continuity in the long term.
We can face a successful company that complies with the corresponding legal and environmental obligations in the area where they operate, but nowadays society demands that organizations make a greater commitment in economic, social, and environmental aspects.
Actually, according to a Deloitte survey conducted on Millennials, 80% of the young population believes governments and companies must make bigger efforts to protect the environment, improve society and achieve equal development.
It is in this context where business sustainability translates into a way of managing resources to achieve this longed-for development. Thus, we now present 3 benefits your company obtains when investing in sustainability.
1. Profitability Increase
You are required to review the business model incorporating concrete actions related to sustainability, since you optimize resources, generate savings, and thus obtain a better sustainability margin. This is also confirmed by 44% of the interviewed executives in the PwC Survey on sustainability in Latin America..
As an example, if your organization decides to recycle, change to LED lights, control the power usage hours, or opt for using the cloud instead of printing, it will necessarily generate significant savings and more revenues for the business. The important thing is to implement a set of measures since all of these actions together will allow you to achieve that profitability difference.
However, remember the importance of monitoring data to plan, control, and measure that increase in profitability. In the same survey mentioned above, only 30% of the executives said to have indicators such as “return on investment”, “consumption”, and “saving”, which clearly indicates it is necessary to move forward in that direction and consider it in the implementation of sustainability activities.
2. Reputation improvement
Business reputation is by far the most important intangible asset of a company, and it is reflected in the value the brand acquires in its interaction with stakeholders.
There are increasingly more people who due to environmental and social problems look for companies that declare, implement, and report their management in terms of sustainability.
A company that begins being sustainable strengthens its value chain, is perceived as socially responsible, has a better reputation, and makes 78% of consumers have a disposition to buy from them (vs. 9% when reputation is bad), as shown by 2020 Global RepTrak ranking.
An example of this is the LEGO company, which obtained first place in the aforementioned ranking due to their capability to integrate ESG aspects into their governance model. In companies this size, the coherence of their acts with the declared purpose is really appreciated, considering the scope and global impact of their business.
It is a long process that requires time, but when the company reaches a certain level of reputation, you can see a new balance (more seamless) with their stakeholders, with better communications, which allows them to give their brand greater value and the ability to protect the company from potential crisis and strengthen their competitive position.
3. Gain competitivity
Today, we observe significant progress from voluntary sustainability standards to compulsory ones, where financial institutions (investors and financers) take into account and increase the consideration of the ESG reports where the companies’ performance in environmental, social, and governance aspects is presented.
In Brazil, we see a clear example of this, where, according to a BID Invest publication, companies in the Sustainability Index greatly surpassed the companies that traded in Ibovespa (145.36% vs 94.11%), and also proved to be slightly less volatile (25.25% vs. 28.05%), according to data from 2016. These findings are backed up by multiple academic and banking studies.
Sustainability supports business consolidation
A business that works within the frame of sustainability becomes an alternative for growth and development, both for entrepreneurs and the country.
Nowadays, leading the company with ESG criteria has a clear scope in what is called Green Finances, where companies that apply and show consistency and adherence to these criteria achieve better access to financial resources and a better positioning in the capital market while making it possible to fulfill their long-term strategic goals.
Thanks to sustainability, the business improves internal and external processes, optimizes resources, manages risk factors, becomes consolidated, and achieves a positive impact on society as a whole in the environmental, social, and economic aspects.
Learn more about how create new value for your business with sustainability reports