In the past, sustainability was often an initiative met with hesitation from corporate boards and executives, as it had a reputation for costing more than the perceived value of its benefits. However, embracing a sustainable business culture can actually result in significant cost savings and competitive advantages. A recent survey from McKinsey shows that many companies are warming to the idea, with nearly six in ten respondents stating that their organizations are more engaged with sustainability than they were two years ago.
While the primary benefit of sustainability is the development of a healthy business that has a positive impact on the environment and community, that is certainly not the only advantage. Here are 5 other key benefits that your business can realize from sustainability:
1. Customer Loyalty
According to a recent Accenture survey, 72% of people globally say business is failing to take care of the planet and society as a whole. Today’s consumers expect companies to be more committed to sustainability and to make concrete strides toward improving the global impact of operations. They are concerned about the toxins they encounter every day, whether through foods, cleaning products or the air they breathe while shopping for groceries or during a hospital visit. News or promotions about a company’s sustainability initiatives (such as making the switch to sustainable refrigeration without noxious gases) can directly impact consumers’ purchase decisions and loyalty.
Even small investments in sustainable products can encourage greater innovation across a company. Restructuring product formulas, store designs or facility practices to meet environmental needs can also drive new business opportunities. And when a company promotes a shared goal of supporting long-term ecological balance, many employees are forced to step outside of their typical comfort and knowledge zones, which is often when many of the greatest innovations are born.
3. Brand Reputation
The ability to maintain an ethical and sustainable reputation is more important than ever, as a single negative viral post about unsustainable practices can undo years of hard work and solid business in minutes. A company’s impact on the world matters greatly not only to customers (as we discussed in the first benefit), but also to employees and shareholders. Each time you choose a sustainable product or process for your business, you bring your brand closer to the minds and hearts of all stakeholders.
4. Risk Mitigation
While some sustainability-related risks are top of mind and immediate for companies (e.g., fluctuating energy costs), many environmental and social risks manifest over time and are more significant than businesses expect. McKinsey reports that risks from sustainability concerns can be as a high as 70% of earnings before interest, taxes, depreciation, and amortization. For example, climate changes can greatly impact operations and revenue for the majority of companies, but many struggle to draw the line from their business practices to such risks. Mitigating these longer-term risks requires making choices and investments that decelerate environmental pollution and resource depletion in the near-term.
5. Financial Savings
In the early days of corporate sustainability, so-called “environmentally friendly” products were often expensive and low quality. Today, that is no longer the case. Many sustainable products are high-performance without the outrageous price tag. And integrating sustainable products and processes into a company’s workflow results in improved operational efficiency, energy and utilities savings, and overall logistics improvements. At Phononic, we find that our customers typically save an average of 40% in energy costs when they make the change to more sustainable refrigeration with better resource consumption.
It’s time move sustainability from a “nice to have” to a “no-brainer” in your business strategies. The companies that choose to make the world better will not only realize long-term operational and financial benefits, but also foster the innovation and admiration that drives business success.
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