Editor’s note: This post was originally published on the Sustainabilist blog.
By Chris Librie
Business leaders often ask me: What is the value of a sustainability strategy? And it surprises me for two reasons. Firstly, what leader doesn’t want to ensure the long-term health of their company? A strategic approach to sustainability is absolutely necessary to do just that. And secondly, I’m disappointed because it suggests that sustainability professionals like me have not laid-out our case clearly enough.
In other words, what we have here is a failure to communicate!
So, in this two-part post, I hope to explain why your company needs a sustainability strategy, no matter how big or small that company may be. In the next installment, I’ll provide some tips for how to implement sustainability strategies successfully, based on my experience in doing just that at two major companies.
First though, let’s start with the why.
1. It’s good for the P&L
Well-implemented sustainability strategies can improve financial performance. Sustainability initiatives often cut costs – think energy and transport efficiencies in your offices and operations. And sustainable companies outperform their peers in terms of return on assets and return on equity, according to the Harvard Business Review. The widespread misconception is that sustainability adds cost and complexity, when in fact it helps make your business more efficient and profitable.
2. It builds employee engagement
Much has been written about the importance to millennials of purpose at work. I happen to believe that all employees prefer to work at a company that actively addresses its environmental and social impacts. And according to SAP’s sustainability report, there’s a quantifiable link between their sustainability strategy, greater employee productivity and long-term retention. Engaged, committed employees are not only more productive, but they save money in recruitment and training costs
3. It’s expected by all your stakeholders
Besides employees, your business has many other stakeholders – from investors, to customers, to government and non-government organizations. All these expect you to operate your business in a sustainable manner, and many will choose to invest, or to purchase your product, based on your sustainability profile. Increasingly, government and NGOs are highlighting – and even shaming – companies that do not meet their standards. Check out the Federal Supplier Greenhouse Gas Management Scorecard, for an example.
4. It helps differentiate your business
Maybe you manage your suppliers with an eye to diversity, or treat employees progressively, or your products are more efficient than the competition. I’ve seen all these factor into tough RFPs, and often provide the tipping point to choose my company’s proposal over another’s. And that drives sales.
5. It’s great for innovation
When sustainability is fully integrated into your business, it helps create insights about new product innovations. I’ve seen this at packaged goods as well as technology companies. You hit the sweet spot when your sustainability strategy is aligned with your customer’s needs – such as providing more energy or material-efficient solutions.
Hopefully, this brief sampler has demonstrated that sustainability strategies can be of benefit to companies of all sizes. The next, logical question is “how do I create and integrate that strategy?” And that will be the subject of my next post.
Image credit: Pixabay
Chris Librie is an experienced professional who has created successful sustainability strategies and top-tier results at two major corporations. He believes strongly in the business-building benefits of sustainability, as well as its importance in driving business purpose. And Chris loves building communications plans to help companies tell their stories to internal and external stakeholders.