Business case of sustainability
Although sustainability experts have connected the financial gains with ESG performance, the knowledge is not yet shared across the business environment. That’s what this article will cover.
For a company to invest time and resources in defining a sustainability strategy and launching it, there have to be strong business arguments. During the first virtual coffee break, @Impact House Kristine Nagle welcomes Lubomila Jordanova, founder and CEO of Plan A.
Plan A, a Berlin-based green tech startup developing a science-based, end-to-end SaaS platform that enables businesses to measure, monitor, reduce and report their carbon footprint while improving their ESG performance. They've worked with 100s of companies by now and have valuable insights to share from their customers’ journeys. Here's what we discussed, in case you missed it or want to share these ideas with your boss!
EU Green Deal and political changes that drive sustainability
“Thanks to Covid, we had had a massive push on a political and corporate level,” shares Lubomila. Political push is crucial for society to understand the subject better and for any change to happen. “EU Green Deal and Taxonomy are the laws that recently have changed the conversation with major companies because it implies that all financial institutions in the next ten years will prioritize working with sustainable companies. And that is what makes sustainability necessary,” adds Kristine.
The business benefits of sustainability
There are many good reasons for becoming more sustainable, but “doing the right thing” won't get you far in the board rooms. It's a long and complicated journey, but we both agreed that business benefits outweigh the challenges. Here are the main benefits for companies who take action on climate change:
Increased profits. It's historically proven that companies that have high ESG performance also have better returns of investment.
Your current and future employees care. According to research done by NielsenIQ, 81% of global consumers strongly feel that companies should help improve the environment. Those companies who do, reap the benefits of loyalty. A survey that interviewed more than 14 million people globally on the reasons for switching a company and sustainability was the one of the top answers.
Your customers prefer sustainable products, especially if your customers are in Europe, where the level of awareness is high. There is a lot of data to back up that sustainable product lines usually grow on average 25% faster than the rest of the product offering.
“I don't think there is a better long-term strategy out there than sustainability. It reduces costs, increases profits and company valuation,” concludes Kristine.
Tips for companies for launching sustainability strategy
“Sustainability is a journey,” shares Lubomila. Becoming sustainable takes many different small steps across several departments. For a business to become sustainable, sustainability has to be incorporated into how the company is managed.
There are several layers of change you can introduce on a company level.
The first layer usually is the quick wins where you get the results pretty much immediately, and that's a good place to start to gain momentum. Activities like recycling schemes in the office, work-from-home policies, or more efficient employee commute can have an immediate positive impact.
The second layer is the product. That is where the majority of the emissions are for most of the companies. The second layer is a bit more complex as you have to look at product material sourcing, packaging materials, or green data centers.
And once you get through these basic steps, you can start thinking and implementing bold changes. Usually, after implementing the first “cosmetic” changes, the mindset already starts to shift. There is more momentum internally, and it's easier to commit to bold next steps.
“Another thing from my own communicator's experience is that it's crucial to understand as soon as possible what is the story you're going to tell and how you're going to tell it. Identify what kind of data you will need to back it up. There is so much greenwashing out there that it's tough to gain trust on the subject. The more proof and data you have, the more solid your point is,” comments Kristine.
Outro
Getting inspired is nice! What we want to see is you and your company taking action. If you need any help, the Plan A team and Impact House are here to help. Share this article with your boss and help us spread the word on the benefits for companies who take action on climate change!
Why? Because there is no Plan B for the Planet.
