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Sustainable businesses are enterprises that have a positive effect on environmental, social, and governance (ESG). They are leaders in the green economy. Often they are involved in human rights policies, especially in sourcing and labor, and also focus on carbon neutrality. Here are some common sustainable business practices amongst the most successful companies with said focus:
In this article, we'll tell you why it's imperative to incorporate sustainable business practices into your organization with vital statistics to know, what the benefits are, how to do it, and how you can make a difference, even focusing on one thing at a time - like emissions management. Not only is it good for the environment, but profitable decarbonisation is key for company growth.
Corporate sustainability and sustainable business are related concepts that focus on integrating environmental, social, and economic considerations into the decision-making and operations of organizations.
The three pillars of corporate sustainability are:
Moreover, to stay competitive, Gen Zs and Millennials have begun focusing their conscious consumption on carbon-neutral companies. Their loyalty to brands now goes beyond having a useful product, to who the company is and what they stand for. They have more questions now than ever about how workers are treated and where the materials are coming from. Even about how they can dispose of it at the end of the product life cycle.
Sustainable business practices are increasingly recognized as necessary for company growth due to several interconnected factors that influence long-term success and resilience. Here are key reasons why sustainable business practices are non-negotiable:
Cost Savings and Efficiency: Sustainable practices often lead to resource efficiency, waste reduction, and energy savings. By optimizing operations and supply chains, companies can realize cost savings in the long run and it reduces dependence on scarce resources. According to DNV.com, in a recent December 2023 survey of 525 European-based businesses with more than US $250 million in annual global turnover, "40% of businesses have seen revenue growth from investments in supply chain sustainability, and 34% have seen cost savings, according to DNV report." In addition, that number increases every year so it's better to begin sooner than later.
Market Opportunities: Consumer preferences are evolving, and a growing number of customers prefer products and services from socially and environmentally responsible companies. Adopting sustainable practices can tap into new markets and meet the demands of an increasingly conscious consumer base. A joint study from McKinsey and NielsenIQ in 2020 revealed that 78% of consumers feel a sustainable lifestyle is important to them and 60% of that group is willing to pay more to get it.
Innovation and Adaptability: Sustainability often drives innovation as companies seek new, more sustainable technologies and business models. Innovations can lead to new products and services, fostering adaptability and future-proofing the business against changing market dynamics. Statista states, "The global market size for key clean energy technologies could reach more than 600 billion U.S. dollars per year by 2030 if countries fully implement announced energy and climate pledges."
Supply Chain Resilience: Sustainable business practices contribute to building a resilient and responsible supply chain. This resilience is significant in the face of global challenges, such as climate change, natural disasters, or geopolitical instability, which can disrupt traditional supply chains. In a 2022 Ernst & Young survey of 525 companies around the world, "EY teams' research found that 8 in 10 supply chain executives are increasing their efforts toward sustainable supply chain operations."
Employee Engagement and Talent Attraction: Employees are increasingly motivated to work for companies that align with their values and creates a positive working culture. According to the IBM study, about 70% of potential employees find sustainability programs make it more attractive to apply for a position at a company, whether in accepting an offer or staying in the same role.
Regulatory Compliance and Future-Proofing: Governments and regulatory bodies worldwide are tightening environmental and social regulations in 2024 with phase-in periods of reporting through 2028 and on.
Investor Relations: Investors are becoming more concerned with ESG factors when making investment decisions. Companies with strong sustainability practices are often more attractive to socially responsible investors, enhancing access to capital and fostering positive relationships with stakeholders. In 2022 PwC confirmed, "ESG-focused institutional investment seen soaring 84% to US$33.9 trillion in 2026, making up 21.5% of assets under management."
Long-Term Reputation Building: Sustainable business practices contribute to building a positive corporate reputation. Companies that prioritize sustainability are viewed as responsible corporate citizens, enhancing their brand image and trust among customers, investors, and communities. In 2023 PR newswire claims, "More than three-quarters (80%) of consumers surveyed said they are more likely to trust companies that back up their sustainability claims with publicly shared data, and 25% actively track government regulations around sustainability to better understand how it impacts their favorite brands and products." Moreover, "69% of consumers don't believe companies today are accurately and honestly reporting on sustainability goals and metrics, and 40% are not comfortable purchasing products from companies that are not actively tracking toward sustainability goals." The numbers say it all.
Related content
To learn more about sustainable business and going carbon neutral, please refer to our free academy of resources:
• Article: Why Communicating Your Efforts to Be Carbon Neutral Is Important
• Article: Carbon Emissions in the Atmosphere and the Methods of Abating Emissions
• Article: 10 Responsible Companies With Net Zero Targets and Pledges
Navigating sustainability challenges involves addressing multifaceted issues such as climate change, office energy consumption, product waste, manufacturing and packaging concerns, and logistics-related gas emissions and pollution. Depending on the industry, identifying environmental harm may require a comprehensive examination, uncovering both subtle and evident factors. Some areas offer straightforward opportunities for reduction, while others demand exploration for alternative solutions, necessitating strategic planning over time.
Developing a holistic blueprint that encompasses various facets of operations can wield a substantial positive impact on the environment. Acknowledging your company's role and taking concerted action contributes significantly to mitigating adverse effects. Environmental impact rarely stems from a single source, making it imperative to delve into an investigative process for a more accurate assessment.
Although there are many ways a business becomes sustainable, we'll show you a picture of what it looks like to navigate the transition to net zero and how we can help. Additionally, please check out our article, Setting Net Zero Targets With a Growth Mindset to learn more.
Start your data collection process. Net0 enables users to automate invoices and bills, parsing out data for effective, fast, and accurate record and measurement across 4 scopes of emissions and all categories of those emissions. Start with the data that you can compile and reach out to suppliers and other players in the value chain to be as thorough as possible. You will begin to see your carbon footprint mapped out in real time.
Transitioning into a carbon-free company isn't feasible overnight. Planning out your net zero journey in stages is going to transform the way you approach the issues and will enable procedures that are realistic one-by-one and are simpler to execute, becoming a part of the regular company routine and not as an added burden or a complete change in company protocol. You can't mitigate what you can't measure and this is the beginning.
An example would be the goal to install solar panels at the company by the end of the year if it has the realistic means to do so. Some companies don't own their building or rent a suite in a high rise and this just isn't possible without further consent, landowners, lawyers, etc. It's important to take control of the things that you can at first instead of focusing on the things you can't control at the moment. Both large and small business sustainability will benefit from taking a look at the realistic options available to them. You can make these comparisons with Net0's simulator tool to see what your carbon footprint is now and compare that with what would happen when you switch to an alternative. Making benchmarks and achieving set targets can be analyzed over time to view your progress.
Reducing waste and pollution is another great goal. If you can find a way to reduce waste this year by 50%, it's 50% better than what you were doing in that area last year. Over time, the goals will become easier to scale and achieve, better for setting higher objectives in the next coming year.
Public disclosure of sustainable performance goals is crucial. Increasingly, both local and international regulations, as well as consumer expectations, are calling for transparency in the global supply chain. Therefore, openly sharing roadmaps and externalizing community efforts is not only widely acknowledged but also valued. Recognizing the significance of customers being informed about their purchases, Net0 empowers businesses to showcase a public dashboard detailing their carbon journey, if they opt to do so. Complemented by hosted certificates and badges for display on premises, social media, and products, this approach assures stakeholders that the business is actively contributing to sustainability efforts, fostering trust, and allowing them to celebrate milestones together.
Sustainable business practices are now simple to do using AI as your guide to build trust and confidence with your team and your stakeholders. Now strategizing for profitable decarbonisation is done quickly, accurately, and legally, without the past uncertainties. It can only get better from here. The corporate narrative has flipped to a sustainable growth mindset and Net0 aids you in achieving that growth.
Book a call today with an expert to see how Net0 works. Net0 is an emissions management platform that allows businesses to precisely measure their carbon emissions and execute plans to reduce those emissions and achieve carbon-neutral status. Knowing what your carbon footprint is is a starting point on your journey to a more sustainable company.
