Sustainability isn’t just feel-good window dressing, it’s actually good for business.

All too often, what looks good and what is good are not the same things.  On that rare occasion, however, that you find both qualities in the same activity you should grab it with both hands.  Sustainability – meeting current needs without compromising the ability of future generations to meet their own needs – is one of those rare activities that both looks good and is good – for business. 

Here are just some of sustainability’s business advantages;

Advantage 1:  ACCESS TO MORE CAPITAL:

I first learned about this one when serving as Treasurer of a non-profit who was trying to bring best practices to the management of its endowment.  Our Investment Policy Statement directs our investment advisor toward Socially Responsible Investing & Ethical Practice in Corporate Governance.  Many non-profits do this in keeping with their goals.  Investment Advisors increasingly respond to these kinds of directives with their own socially responsible investing policies, trying to influence management practices of the companies they invest in and to select for investment the most transparent and sustainable companies from among their peers.   Says Roger W. Ferguson, Jr., CEO of TIAA-CREF, “We believe that, when companies focus on being socially responsible and having good governance practices, they may be exposed to lower risk and thereby achieve better financial performance.”

So, the practice of sustainability and the transparency of sustainability reports gives you access to investment monies you might not otherwise have available to you, thereby expanding your access while lowering your cost of capital.  Certainly, that’s good for business!

Advantage 2: ACCESS TO NEW CUSTOMERS

Top companies take all this very seriously.  Wal-Mart for example has made sustainability a part of every one of their buyer’s performance evaluation. “There will be rewards for buyers who focus on increasing sustainable sourcing” says Jeff Rice, Wal-Mart’s director of sustainability.  Why do they do this?  A supplier that observes sustainable business practices and is transparent in their reporting is less likely to embarrass their company.  Major public brands like Apple, GE or Wal-Mart are tired of apologizing for the actions of others.  So if you are trying to get your products into one of these marquee brands, an active program on sustainability will tell them you are a worthy supplier.  Paul Appelbaum, president of Partner Pak, knows CostCo identifies preferred, sustainable suppliers.  He describes his company’s recent positive experience as a supplier to Costco as an example of how sustainability has enabled his company to compete successfully. “Costco wanted to go green by eliminating PVC [polyvinyl chloride] and replacing it with maximally sustainable RPET [recycled polyethylene terephthalate].” Partner Pak provided Costco with a solution that satisfied environmental and economic concerns. “The energy savings actually reduced Costco’s carbon footprint, when compared to other sealing methods.”

So the practice of sustainability will open doors to more customers and get you selected over your peers as a supplier of choice.  And that’s good for business too!

Advantage 3: ACCESS TO QUALIFIED EMPLOYEES

Despite today’s high unemployment, the best qualified workers are still hard to find.  The number one candidates still have their pick of jobs, and increasingly they are interested in working for companies that match their own personal values.  Employees whose goals are consistent with a company’s goals are less likely to leave and more happy in the workplace.  And if that company’s goals include transparent attention to sustainable practices and ethical corporate governance, then the employees attracted to such a work place will have those qualities too, creating the ideal ethical workforce.  What’s more, this convergence in values creates a higher return.  Ricardo Lange, CEO of the Great Place to Work Institute, reports that companies in their list of “100 Best to work for” have “consistently outperformed the stock market returns of the S&P 500 and the Russell 3000, achieving a three times greater return.”

So, sustainability practices yield access to a larger and more ethical pool of employees with fewer turnovers while yielding higher overall returns for the company.  And surely that’s also good for business.

Conclusions:

In addition to offering obvious benefits to our planet, sustainability can provide measurable and concrete benefits to the company itself.  It has become senior management’s overarching strategy to reduce business risk, increase overall return, expand the customer base, access more and cheaper capital, and assure a continued flow of quality and ethical employees. 

This is why Sustainability is starting to take the lead among industry best practices and you should consider it for your company. 

For first time companies just considering sustainability, we can assist in preparing a Sustainability Strategy, helping to set targets for a multi-year horizon, and establishing metrics to measure their achievement.  It is the earliest steps toward full reporting.  If you already have some history with sustainable practices, and would like to examine the next steps toward full GRI report compliance, we can help with that too.  Either way, let us have a conversation.   Contact Us Here

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