Rising awareness for environmental sustainability
Business history goes 3,000 years into the past and an understanding of the factors that impact the world of business helps organizations anticipate and adapt to the shifting expectations of time. This is essential to do for organizations, both large and small, in order to stay relevant and succeed.
The emerging trend of environmental sustainability is gaining amplification with deserved urgency, and is lending differentiation and credibility to the businesses that stand by it today. After many decades of disregard towards the negative impact their businesses are having on the environment, organizations across the globe are rethinking the implications of their processes and practices to reduce the damage and even increase the positive influence on environmental sustainability.
Turning intent into action
Sustainability has become a critical business issue according to The Boston Consulting Group which states that 65% of executives today report it to be on their top management agenda, up from just 46% in 2010.
A MIT Sloan Management Review and The Boston Consulting Group research from 2014 found that whereas 90% of executives find sustainability to be important, only 60% of companies incorporate sustainability in their strategy, and merely 25% had sustainability incorporated in their business model. As awareness on the matter is rising, businesses which are wreaking havoc on the environment are being called out and transparency in processes is becoming more common place. This has increased the expectations on corporate responsibility and more companies are recognizing that good intentions are no longer enough and must be backed by concrete action.
Why sustainability will help businesses flourish
With environmental sustainability becoming a critical and increasingly regulated issue, getting involved and acting now to weave it into the ethos of their business will give organizations a head start.
Responsible decisions that reduce wastage and use lesser energy not only help reduce commerce’s strain on the environment, but also help in developing processes that will lead to businesses becoming completely sustainable in the long term, in the face of limited resource availability. The risk of companies simply running out of resources they need to operate was made imminent a decade back when agricultural companies in California suffered an estimated loss of 20,000 jobs and $1bn because of water shortages.
Sustainable solutions can reverse the threat and work to help businesses improve their bottom line. For instance, becoming more energy efficient will result in significant savings on energy costs.
Alongside, sustainable businesses can find a market with all consumers, regardless of how much premium they place on environmental sustainability. Not doing so means cutting themselves off from the rapidly growing consumer group who stand for the cause.
It gives businesses a competitive edge lending them differentiation and helping them stand out. In the hyper informed times we live in, modern consumers and investors alike are a well-informed lot leaning towards making sustainable choices that will ease the strain from environmental and social issues afflicting the world today. Compliance is an issue that concerns investors as evidenced by the BCG/MIT report that states 44% of investors say that they divest from companies with poor sustainability performance.
The ‘Goodness’ appeal for today’s conscious consumer
A wave of consumers wanting to make ethical lifestyle choices and positive buying decisions is rising giving way to conscious consumerism. Wanting to balance the negative impact of consumerist practices, these are caring individuals who know their buying practices are affecting the world.
Drawing the wholesome goodness that nature has to offer with minimum strain on the planet is setting new trends in the market. The beauty industry is a prime example of this leaning towards goodness. According to Mintel’s Global New Products Database (GNPD), worldwide vegan cosmetics launches have more than doubled over the past five years. The global marketing firm details that new cruelty-free and vegan cosmetics launches represent a 175 percent increase from July 2013 to June 2018 indicating not only are consumers wanting to be good to the planet, but are also uncompromising when it comes to selecting goodness for themselves.
Buying products and supporting businesses that resonates with their moral markers makes consumers feel contributive and good about themselves. These feelings are shaping consumer behavior and influencing buying behavior. Inculcating environmentally sustainable practices is becoming an effective measure for businesses to tailor their offerings to the evolving customer expectations.
Acquiring green certifications gives an added credible PR edge to businesses as they validate their having met the strict requirements of these certifying bodies. Being independently assessed to be environmentally sustainable conveys to the caring customers that they are ethical businesses committed to best practices and protecting the environment.
Being ethical leaders
The growing body of research and attention from governments, organizations and individuals to conserve and repair the damaging impact of commercial activity on the environment is making environmental sustainability a topical issue. Companies which do not work towards reducing their environmental impact stand to be restricted through taxes or regulations by concerned governments.
This is why sustainable businesses today are rightfully being viewed as socially-responsible market-leaders giving them a competitive advantage and placing them squarely as innovators with a heart.
Disclaimer: The views expressed in the article above are those of the authors’ and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.