Sustainability efforts and conservation are two concepts you have probably heard a lot in recent years. These concepts relate to everything in business. This includes natural resource depletion to climate change, cost containment, and waste reduction.
There are some companies consider these movements a new burden for businesses. However, companies that have enacted sustainability initiatives are actually realizing new levels of success. In fact, there are many reasons why sustainability and conservation are more than social causes. These practices also produce strategic and financial rewards.
As the founder of both Conservation International and Nia Tero, a global collaborative focused on advancing indigenous peoples and strengthening community stewardship, Peter Seligmann is a strong advocate for nature who also has valuable insights into why sustainable practices make business sense. While he sees them as ethical, Seligmann also recognizes the bottom-line benefits of things like eco-friendly manufacturing and socially conscious business strategies.
A Healthy Bottom Line
There are a number of ways that the efficient strategies behind sustainability efforts lower costs and lead to greater profitability. As Seligmann explains in a GreenBiz article, “Simply replacing outdated computers and installing energy-efficient light bulbs can save companies up to $1 billion, and some of the world’s biggest brands found that sustainable investments give them an edge in both product innovation and brand image. Then there are the tax benefits and sustainability tax incentives, such as income tax credits and property tax abatements, which the government offers companies in order to get them engaged in such initiatives.”
An OECD Observer article echoes a number of Seligmann’s points. It noted that “reducing inputs of limited natural raw materials or fuel consumption [and] reducing waste production and utilising by-products from other industries allow firms to cut costs.” Sustainability efforts can also help firms improve product value. This is done by enhancing relationships with customers who want to buy from socially conscious brands. When sustainability becomes imbued in an organization’s culture, it attracts and retains talent that reflect these socially conscious practices. That creates a significant competitive advantage.
Numerous other examples point to the power of sustainability. For example, Project ROI has delivered a comprehensive analysis of the financial benefits of sustainability programs. According to an Ensia article, “When done right, [Project ROI] concluded, sustainable initiatives can increase sale revenue by up to 20 percent, increase market value by nearly 10 percent, lead to lower investment risk and cut employee turnover rates in half.” The article also says WeSpire Sustainability helped MGM Resorts save approximately $5 million annually.
Benefits For All Involved
And, it’s not just your business that benefits from sustainability. You’ll also be able to pass on the sustainability message to others. As Seligmann further notes in the GreenBiz article, “When multiple retailers, manufacturers, and suppliers depend on you for customer engagement and distribution, you wield considerable influence that can be used for the greater good.”
He cites Walmart as an example. The global company has 150,000 suppliers. When Walmart decided to migrate to sustainable practices, it told suppliers of its private-brand products to use 100-percent recyclable packaging materials and sustainable packaging methods. “More efficient packaging also meant more products with which to stock Walmart’s shelves and create more profit opportunities.”
Growing Without Causing Harm
One of the most challenging aspects of running a business is how to expand without using more resources. With Starbucks, the company decided that its desire to grow could not come at the expense of forests. To sell more coffee, it needed more beans. Typically, those beans would have been grown by clearing more forest. In applying innovation to its dilemma, the coffee brand developed a way to grow coffee without any deforestation.
As an Observer article notes, “The result was the Coffee and Farmer Equity, or C.A.F.E., program, a third-party verifier that ensures the company uses sustainable ingredients to brew each cup. Right now, 99 percent of Starbucks coffee follows C.A.F.E. methods, and the company’s continued popularity fuels these sustainability efforts, meaning every customer in that morning or afternoon line has a hand in improving worldwide growing methods.”
Developing a Sustainability Mindset
Companies can reap all the business benefits of sustainability. Seligmann suggests focusing on “enlightened self-interest.” In the aforementioned GreenBiz article, he says it’s “where your professional and personal goals intersect. Before you successfully can incorporate sustainability into your organization, you need to invest in the concept emotionally.”
This may take time to develop, However, you can observe other business leaders with this mindset. They can guide you toward practicing enlightened self-interest. In the process, you’ll gain a new understanding of how to leverage sustainability. And, you’ll see how to use it for a financial advantage, enhanced brand reputation, and a competitive edge.