A business that abides by proper social and environmental practices establishes a strong positive brand reputation. This helps it attract vibrant employees and potential investors who appreciate the company’s values.
Using ESG standards is an efficient way to position a business to meet changing regulations in a timely manner. It also makes a company more appealing to potential customers and lenders.
1. Increased Efficiency
A business sustainability platform benefits companies by increasing the efficiency of processes such as energy usage and waste reduction. Data from utility bills, facility energy and water consumption, fuel costs, carbon emissions, and other sources can be analyzed through customizable dashboards and benchmarks to optimize efficiency, remain compliant with regulations and maintain corporate responsibility.
Businesses that engage in sustainable practices typically boost their savings and promote long-term financial health. Their actions also generate goodwill with their employees, customers, stakeholders and community.
However, there is a risk that business leaders will focus too much on these initiatives and overlook the other critical aspects of their operations. These other aspects include economic, social and governance (ESG) strategies such as corporate governance, supply chain sustainability, sustainability risk management and compliance.
Many businesses are struggling to balance these competing priorities while also complying with regulatory demands for compliance, energy use, and waste reduction. This is known as the “knowing-doing gap”. Those that have managed to overcome this challenge are able to transform from knowing to doing, from compliance to competitive advantage.
2. Enhanced Transparency
In a time where trust in businesses is falling to new lows, transparency on corporate sustainability and operations is increasingly vital. People want proof that companies are doing their best to stay true to their sustainability goals, which can include ensuring a positive environmental impact and improving working conditions in the supply chain.
A business sustainability platform can help you manage all of your sustainability efforts, including supply chain and investment transparency. It provides reports that demonstrate your progress toward sustainability goals and ensures you have the metrics to back up your claims.
Moreover, the platform can help you communicate your sustainable goals to outsiders so that they understand how your business is contributing to a sustainable global economy. This can help build trust with stakeholders and maintain their support in the long run.
A business sustainability platform can also help you detect risks and minimize their effect on your business. This can protect your company from natural disasters, political events or pandemics.
3. Increased Resilience
Business resilience is the ability to adapt, overcome, and recover from unforeseen challenges. Resilience is a critical factor in economic and social growth.
Resilience requires a collaborative, systems view that focuses on how the relationships between businesses and their environments change under stress. It’s much different than optimizing individual company performance and building stability into companies’ business models.
During the COVID-19 pandemic, companies with higher levels of resilience generated 10 percent more total shareholder returns during the downturn and 30 percent more during economic recovery (Exhibit 2).
Resilience is about building organizations and supporting systems predicated on constant change and experimentation. Resilient businesses prize cognitive diversity and appreciate the value of variation and divergence.
4. Increased Revenue
Businesses that make a commitment to sustainability can reap many benefits. These include reduced costs, innovative strategies, an improved reputation and new customers who value sustainable goods.
Companies that are successful at sustainability often see a rise in their revenues. This is because consumers are more likely to choose sustainable products that have a good social impact, a stronger environmental message and an emphasis on eco-friendly packaging.
These improvements also lead to more efficient operations and fewer waste materials. This reduces the company’s carbon footprint and provides future generations with cleaner air and water, less landfill space and more renewable energy sources.
A sustainable business strategy can also help a company tap into new markets and expand into existing ones. It can also improve a company’s ability to comply with regulations and get tax incentives and subsidies.