4 Key Groups That Care About Your Environmental Efforts: Sustainability has become a universally important issue for a company’s stakeholders, both as a matter of social responsibility as well as economics. Awareness from investors, customers and employees of a company’s sustainability stance is constantly increasing. This trend is expected to continue into the foreseeable future.
Sustainability is a requirement in today’s world, where the effects of dwindling natural resources become more evident by the day. While not everyone agrees about the causes or severity of climate change, residents in places like Cape Town and London are facing real-life water crises caused by severe weather conditions, aging infrastructure and waste.
Companies who are proactive about sustainability are making a responsible choice on a global scale, but it’s vital to find a balance and a synergy between business best practices and sustainability. Once you find that balance, you’ll start engaging the four types of stakeholders whose support and good opinion can make or break a business. Your sustainable business practices will resonate with these vital groups
Customers are probably the most important group of stakeholders. What do customers want from your company? Obviously, they want the goods and services you provide, but today they have more choices. Aligning your ideals and values with your customers’ is one of the advantages that will differentiate you from others.
That’s true across the entire value chain – manufacturers, service providers, enterprises and consumers. Last year, a Nielsen survey showed this undeniable trend across three categories — coffee, chocolate and bath products — with sustainable products showing faster growth than their non-sustainable counterparts. The results of the study showed that chocolate products with environmental sustainability claims showed four times the dollar growth of the total category from March 2017 to March 2018.
Today’s customers want to do business with a company that cares, that is paying attention and that is aligned with their core values. Making changes towards sustainable practices — and letting your customers know about the changes you’ve made — is a key component of customer retention and growth strategies.
The relationship with your shareholders is more nuanced than the relationship with your customers While corporate financials are the core of shareholder interests, sustainability still plays a part. Investments based on environmental, social and governance considerations accounted for one in every four dollars invested in the U.S. alone during 2017, according to the US SIF Foundation. On a global scale, similar investments have grown to nearly $23 trillion.
So, your investors and shareholders are taking sustainability issues into account when they choose where to put their money. However, investors and shareholders are first and foremost looking for solid business practices, profitability and return on investment. This is where the synergy between good business and sustainability is so important. When done right, sustainability means your business is using fewer resources like water, power and materials. They can help improve your bottom line while making a positive environmental impact. It is the intersection between these two factors that will engage your investors.
Your employees are just as discerning as your customers and shareholders, and with the U.S. unemployment rate at a record-breaking low of 3.6%, they can afford to be. Your available labor pool is shrinking, and qualified workers have their pick of employers. They are choosing to align themselves with companies they feel good about, and for many of them, that means employers who are taking environmental action.
The level of talent you can attract has a huge impact on the quality of products and services you can provide. And while in the past workers separated their business and personal lives, the lines are blurred. Employees want to identify with their employers. Who they work for says something about them on a personal level. Making yours a workplace to be proud of through sustainable practices helps expand your labor pool and increases the chances of bringing better, more qualified workers to your doors.
4) Your Community
Your business practices have an impact on the community where your company is based, and so many sustainability issues are local. Water consumption in particular is a local issue because all businesses and homes in a community are drawing from the same, limited sources. Proactively addressing water leaks and conserving water will only benefit a company’s standing from a local public relations perspective.
Companies who align themselves as sustainability allies in their communities will reap the rewards in better relationships with regulatory bodies, governments and community groups. These rewards will also translate into your employees — who often are a part of the same community — by upping their pride in working for a caring, responsive company.
With every passing year, the gap between business and personal values is closing. For customers, decision-makers and investors, the separation between the social stand a business takes and the product it makes is shrinking. The pressure is on for companies across all sectors to take a stand on issues like sustainability.
There are so many ways for a company to incorporate sustainability into its business practices, it can be difficult to choose where to start. One way to choose a path is to look for low-hanging fruit. What sustainable practices will make the most difference, both for the environment and the company’s bottom line? Look for changes that can be made quickly and will start showing return on investment just as fast, whether that means cutting water consumption or going paperless.
There is a reason why most Fortune 500 companies have sustainability officers. These practices aren’t just good for the environment. They also make real-world business sense.
Written by Alon Geva, CEO of WINT.
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