The Importance of Sustainability in Corporate Strategy
Over the last few years, consumers’ preferences have shifted greatly towards sustainable products. Before they buy a product, many consumers these days not only carefully research the product itself, in terms of functionality and customer approval, but also the values and the practices the company behind it abides by. Recently, conscientious employees, when considering taking a job, not only consider the pay (although that is a very big part of any job), but they also consider the company’s mission on whether or not they promote sustainability, since they themselves want to work for a good cause and reduce environmental harm. That factor alone can sway employees to prefer one company over another if he or she have relatively equal choices.
So, by keeping in mind this scrutiny, from both ends of the playing field, how can companies themselves form their own legitimate sustainable practices and effectively implement them?
1. Actively aim to make the world a better place by following UN’s sustainability goals
The leaders of any company should consider where they do business. For example, Microsoft chose Norway as the place to build their data center, since the country is known for its unique leadership focus on sustainability. Natural resources will continue to be on the decline as time progresses, so companies must use innovative methods to tackle these issues.
2. Assess economic, social, and environmental risk
By doing so, the impact for a company translates to lower costs and strengthened business relationships. A company’s leadership team needs to be aware of what is happening in the world right now: taking circumstances into account such as economic and environmental opportunities and challenges. I think that for a company to claim that one of its key pillars in their respective mission or vision is to operate sustainably, all employees need to build this conscientiousness. That way, when opportunities related to sustainability arise, they are aware of its importance and are willing to collaborate on respective endeavors.
What are some of the benefits for companies themselves when implementing these sustainability initiatives?
1. Increased efficiency overall
A sustainable strategy, according to a study done by McKinsey, can affect operating profits to up to 60%, while also lowering water intake and energy consumption. While implementing these policies, it is important to be transparent and communicative on progress to employees, partners, and consumers alike. The benefit is that being sustainable, as a company, improves relations with the government and local community, and can help you get back company tax incentives and subsidies.
2. Attracts more talent to the company
Having a sustainable mission or related initiatives attracts a larger workforce. According to a survey, which was the result of conversations with 1,000 employees at large U.S. companies, 40% of millennials took a job because of the company’s environmental responsibility. Since millennials are becoming a large part of the workforce, not having a sustainable strategy can also allow the company to lose out on a lot of talent, and demotivate current employees as well.
With consumers, employees, and job seekers all constantly growing more environmentally conscientious habitually and socially, it is a company’s job to weigh the circumstances at hand and decide ultimately whether they should put a foot forward to more environmental-conscientious operation and vision.
Want to learn more?
Deloitte's Sustainability and Corporate Social Responsibility
Forbes' Why Corporate Strategies Should Be Focused On Sustainability