The biggest benefit of developing a sustainability strategy is doing your part in making the world a better place. But let’s be honest, the fact that it’s also a good financial strategy makes it a lot more attractive.

Companies that do “good” do better. Data shows that companies with strong sustainability practices have lower operating costs, and better profitability and share price performance. One study shows that companies that had consistent high environmental, governance and social performance had 4.7 times higher operating margins and lower volatility than poor performers. There are many reasons why that is.

Because being sustainable cuts costs. Operating with a green lens can greatly reduce long-term operating costs: consider how efficiency can reduce energy bills, or how choosing the right products can cut waste collection costs, for instance.

Customers are demanding sustainability. Customers want to buy from companies that have ideals that align with their own. 62% want companies they buy from to take a stance on cultural, environmental, social and political issues. Nearly nine in 10 Americans will buy something because a company stood for something they themselves believe in. These things are very important to Millennials, and the up-and-coming Generation Z.

Resiliency is key to long-term success – and mitigating risk. Addressing your business’s sustainability makes it better adapted to keep up in this ever-changing world, where climate and social issues are increasingly important.

Sustainability attracts talents. Employees want to work for companies with values that mirror theirs. Your environmental record and goals, workplace culture and social impact have a direct connection to who is applying for your jobs, as well as how long employees choose to stay with your company. Millennials are the current predominant generation in the workplace: 56% have ruled out working for a company because of its values or conduct. Three-quarters would take a pay cut to work for a green company. And Gen Z may go even farther: they want companies to make truly measurable differences.

Attract investment. ESG investing (check out our blog for a primer [link]) is hot right now – and expected to continue to grow in popularity. Having a sustainability strategy will signal to investors that you’re serious about positive change – and have a plan in place to do your part. 

We hope we’ve convinced you that it’s absolutely vital for your business to develop a sustainability strategy. Need some guidance? Our next blog in this four-part series will help you start the process.

 

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