Successful sustainability practices are more important than ever. Not only will 90% of investors scrutinize a company’s sustainability performance before making investment decisions (according to this study), but nearly 50% of investors indicated that they would not make any investments if the company had less than optimal sustainability performance.
Additionally, due to increased public awareness concerning the use of conflict materials, businesses both large and small are facing a great deal of pressure to institute sustainable business models.
The Need for More Sustainable Business Models
Despite the pressure to switch to more conscientious business models, the perceived cost of sustainable practices is what scares most businesses away from making the transition. However, companies employing and maintaining sustainable practices have been proven to experience increases in efficiency, and decreases in operational costs. Reports from the Boston Consulting Group, McKinsey & Company, and MIT Sloan Management Review indicate “studies are revealing a trend of both investors and corporate executives realizing that there is a direct link between successful corporate sustainability practices and improved long-term corporate financial performance.”
It is a common misconception that sustainability is unattainable for small businesses. On the contrary, sustainability for most small businesses is actually a cost saver. Instead of going through supply chains, small businesses that are looking to trade in a socially responsible way are finding alternate sources largely operated by family run businesses, or by small companies. Working with smaller business owners at the very beginning of the supply chain helps to eliminate middle men, and provides the assurance of knowing that the source of purchased materials is not connected with global conflict(s).
Sustainability as a Brand Driver
Whereas large companies have boards of directors to answer to when it comes to business practices, many small businesses are driven by a desire to align their business’ world view with those of their clients and customers. This is leading many small businesses to take more responsibility to know where their products and other sources are coming from. Not only are these efforts towards sustainability helping companies save money, but they are also driving more business from customers.
Some major brands also are taking note and generating billions of dollars in new income by selling sustainability, as reported earlier this year by the Guardian. As modern consumers continue to become more aware of the importance of sustainable living and making purchases that reflect that, the global economy will continue to follow suit. The good news for businesses is that sustainability is becoming far more affordable, and its benefits drastically outweigh any costs.
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