Sustainability is a growing challenge for businesses, but it’s also an opportunity to create long-term human and societal value for all stakeholders. As sustainability is placed under the microscope for organisations in all industries, CEOs accept the business case for sustainable practices.
Here, we look at five sustainability considerations CEOs should make and the benefits sustainability policies can bring to your business.
- Sustainability Has a Direct Impact on ESG
- Sustainability Should Be a Core Focus
- ESG Can Impact Brand Reputation
- Sustainability Leads to Revenue Growth
- Meeting Regulations
1. Sustainability Has a Direct Impact on ESG
ESG stands for Environmental, Social and Governance, and refers to the standards for measuring an organisation's impact on society, along with its transparency and accountability. CEOs are responsible for a company’s ESG; neglecting this could have ramifications for your organisation.
A phrase coined in the 1990s and is gaining more popularity is the ‘triple bottom line,’ which refers to a concept concerning the three Ps (people, planet and profit).
The triple bottom line is relevant to investors and organisational decision-making.
It recommends that organisations focus on environmental concerns as much as they do making profit. The concept’s main message is that there shouldn’t just be one bottom line for an organisation. There should be three: people, profit and the planet.
By focusing on a TBL (triple bottom line) strategy, you’ll be committed to a sustainable way of making a profit, therefore meeting ESG criteria.
2. Sustainability Should Be a Core Focus
A focus on sustainability impacts operations and changes how an organisation works. The strategic decisions you make should result in the transformation of your processes to support your sustainability aims. Your organisation only becomes sustainable when your processes match your goals and values.
For example, to support climate action, you must look at how your organisation operates and where the potential for improvement lies.
As a CEO, it’s your responsibility to envision and action the company’s sustainability strategy. This needs to be reinforced by C-Level staff to ensure the changes are implemented effectively across the organisation.
3. ESG Can Impact Brand Reputation
Working towards a strong level of ESG can boost your reputation. On the other hand, neglecting ESG can cause public relations issues.
8 out of 10 CEOs believed there was an increasing importance of discussing ESG issues during the pandemic, while 75% of consumers are changing their preferences based on sustainability. The same survey also found that 46% of employees would only work for an organisation which practised sustainability.
No matter the industry, how your organisation views and practices sustainability will determine whether consumers trust your company. Plus, allegations against your organisation's attitude towards sustainability can damage your image. Ensure you implement effective sustainability practices to respond to any accusations effectively.
4. Sustainability Leads to Revenue Growth
EU taxonomy states that organisations must now report on their ESG. In North America, the SEC is preparing new disclosure requirements for the impact ESG should have on investing decisions. Sustainability is a crucial focus for governments worldwide and businesses should be aware of this.
It isn't just governments focusing on sustainability, however. Consumers take an organisation's sustainability practices into account when deciding whether or not to trust a business. This is where the increase in revenue can come into play.
The modern customer cares about sustainability — 88% of customers will be more loyal to an organisation that supports social or environmental issues. Plus, 85% of respondents to a 2019 survey said they had made a minor, modest or significant shift towards being more sustainable in the last five years.
Your customers are making an effort to be more sustainable, so there’s no excuse for your business not to follow suit. By aligning with the social causes your audience cares about, you’ll be more likely to build a loyal customer base.
5. Meeting Regulations
Regulations are being put in place worldwide to ensure organisations are committing to a sustainable way of operating. Environmental compliance is your legal responsibility, although practising sustainable methods should mean much more.
Examples of environmental rules your organisation may have to follow include storing waste safely and securely, recycling the organisation's waste or ensuring any hazardous material is labelled and disposed of responsibly.
Your organisation needs to comply with these regulations and should implement strict policies to do so.
If this is an area you struggle with, then our Procurement Event is a must-attend for you.
Attend SUSTx Procurement 2022 To Start Making Your Organisation More Sustainable
Experts from around the world will gather to explore procurement and supply chain strategies to deliver on sustainability targets.
On 30th November 2022, the SUSTx Procurement will assist you with educating and engaging your supply chain and how to collaborate towards positive impact by integrating a strategy along the value chain.
To discover more about the event and book your place, click below.