We know by now that phenomena like climate change and global warming are affecting our lives and the future of our planet. According to NASA, it is more than 95% likely that the reason behind the planet getting warmer is human activity.
Industry and its dependence on land, resources and fossil fuels is a big part of our worsening climate change scenario. With these changing conditions, it is imperative for business and sustainability to join hands, to preserve the environment.
In the simplest terms, sustainable business development is the process of operating and developing a business, without negatively impacting the environment. Here, a business concerns itself with more than just profits, considering the people and planet when making core decisions. As part of this, a business may introduce specific targets related to sustainability, which could be anything from ensuring their supply chain is environmentally responsible at every touchpoint, to creating products only from sustainable materials, to carbon offsetting company travel.
Why is environmental sustainability in business important?
Sustainability has become increasingly important in business, due to changing consumer perceptions around the world. People are increasingly looking to governments and more recently, to corporations, to drive social and environmental change.
According to Cone Communications' corporate social responsibility study, 87% of American consumers will purchase from brands that fight for a cause they believe in. Just under three quarters (73%) of consumers would stop purchasing products from a company that doesn’t appear to care about climate change.
The benefits of sustainability in business don’t end with meeting changing customer needs. There’s an array of wider positives for your brand, too. Some of these include:
1. Reduced costs and increased profits
Sustainable business practices can help corporations reduce their costs. For instance, using energy-efficient measures can save huge amounts on bills. Consequently, businesses can run more efficiently and reduce overhead costs, automatically increasing profits.
2. Increase brand value
As mentioned, consumer perception is evolving. People are increasingly mindful and concerned about the state of the planet and the repercussions of human activity on our climate. Every consumer wishes to do their bit, which begins with making better consumption decisions.
Implementing sustainability in business not only increases sales, profit and market share, but can also improve a company’s public image. This in turn increases brand value not only among consumers, but among stakeholders in society and even government officials.
3. Greater employee engagement and satisfaction
Sustainability does not derail a company from its business goals but rather unites its workforce by fighting for a common purpose. Including sustainability innovation in your company’s business strategy not only improves public image, but also gives you a competitive advantage when hiring the best talent. People increasingly want to work for a company with a strong purpose that aligns with their personal values.
4. Growing market for sustainable goods
As consumer perception changes and consumption habits evolve to be more sustainable, more people are switching to buying goods that do not impact the environment negatively. Millennials are even willing to pay more for sustainable products, considering higher price tags worthwhile when it comes to purchasing goods in a more mindful way. This development also gives companies the incentive to explore opportunities in innovation and sustainability.
Importance of measuring brand value
The sanctity of the word “sustainable” has been tainted by some businesses throwing the word around without concrete commitments to back it up. A sustainable brand is one that integrates environmental, social and economic issues into business operations. The ethics and sustainability of an organization are measured by environmental, social and governance metrics.
With this, brands need to be wary of ‘greenwashing’. Any environmental or sustainability-focused marketing campaigns need to have real business commitments to back them up – otherwise, consumers will see through it and vote with their wallets.
So far, it is clear that the move to sustainable business practices is both imperative and inevitable. The more sustainable a company becomes, the more competitive advantage they enjoy. And the reduced costs, efficient business functions and increased sales deliver immediate financial benefits.
As we learned from our Innovation series, innovation is the only way to sustain a business. What better way to move your company into its next phase than to bring together innovation and sustainability?
Executives fear that they must choose between environmental values in their business and profit margins. However, research has shown that sustainability aids organizational and technological innovations. It’s a win-win.
However, the most important and lasting impact of environmental sustainability in business for marketers is on a company’s brand value.
Sustainable business development measures allow companies to align their sustainability goals with those of their target consumers. This makes consumers feel closer to the company’s values, bringing benefits for brand value.
Not only is sustainability appealing to consumers, it’s a winner for new investors. As sustainability is the future, investors are keen to direct their money to companies that are committed to ethical and sustainable practices that align with the needs of consumers.
Increase brand value with Kantar’s insights into sustainable business practices
Kantar BrandZ measures brand value of the world’s leading companies, combining insights from 4 million consumers, covering 18,000 brands in 50 markets around the world. Understanding the growth strategies of globally valuable brands can provide insights into developing your own brand value.
With Kantar BrandZ, you can boost your own brand value. Navigate your brand’s strengths, weaknesses and opportunities, plus learn how sustainability innovation can increase brand value. Get in touch with BrandZ and discover the potential of your brand.