Sustainable development - time to act
Prediction: in a few years time every organisation in the UK will have to show evidence of their sustainability credentials because their customers will demand it.
The organisations that do it first will gain a competitive advantage. Don’t get left behind.
But what is ‘sustainable development’? It is a much used term whose meaning often gets lost. The best definition I have found is: sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs. Note ‘the needs of the present’. I have often been told that a company can’t become sustainable because it would adversely affect their current business but this Is not the case.
Most of us are aware of the climate crisis but many feel it is all a little bit removed from our day-to-day lives, “we can’t do much, it’s up to governments to sort it”. But we and our organisations can do a lot.
Business can do a lot
Business affects every aspect of our lives from the bed we sleep on to the food we eat, from the TV programme we watched last night to the WhatsApp message we sent, from the seat we’re sitting on to how we get around. Business contributes to every element of our carbon footprint.
On the ‘supply side’ J Safra Sarasin, a Swiss bank found that the emissions of 6,000 companies are on track to raise global warming by 3.5C to 4C. Cement accounts for 8% of global emissions, steel 7-9%, transport 24%, digital usage 3.7%. Bitcoin alone accounts for more emissions than the whole of Denmark, hence Elon Musk’s decision to not allow Tesla cars to be bought in Bitcoin any more. Business can, and needs to, do a lot.
The idea of sustainability sells
On the ‘demand side’ there is a significant sustainable movement. 8 out of 10 people see climate change as a major threat to their country1; 57% of UK shoppers would pay more for sustainable products2; 65% of consumers look for products that can help them live a more sustainable and socially responsible life3; 73% of UK consumers want to be more sustainable in 20214; 73% of Gen Z and 63% of Millennials are prepared to pay more for a product that is eco-friendly than one that is not5; many institutional investors are insisting companies follow a sustainable path. These are big majorities and you will be left with the small minorities if you don’t take action. The idea of sustainability sells.
Significant benefits
A common refrain is that “I’d like to make my company more sustainable but it will cost too much money”. Many reports over the past couple of years have extolled the benefits of sustainability. A UN report found that organisations that focus on sustainability are performing better financially than those that don’t. Another UN report calculated that corporations that actively manage and plan for climate change secure a 67% higher return than companies that don’t. They see an increase in productivity and a reduction in costs.
Many employees are looking to work for a sustainable organisation and tend to be more committed. Key metrics such as brand image and competitive advantage improve. According to HSBC’s ‘Made for the Future’ report 86% of companies they spoke to expect sales to grow over the next year from a greater focus on sustainability.
Volvo Cars is one company that understands the benefits - “Sustainability is now as important to us as safety…it is critical to our future success. It is key to attracting consumers, employees and investors, as well as helping drive profitability.”
Act now
There’s a raft of actions a company can take, some small, some big; some short-term, some long-term. There’s lots of low hanging fruit to be easily picked such as having a proper recycling process, purchasing FSC certified paper, buying oat milk for the office rather than cow’s milk.
Actions that require more work and planning include moving energy supplier to one that is genuinely 100% renewable, sourcing materials from sustainable suppliers, adopting a circular economy manufacturing process and probably the most important and the one that can take longer than any other is instilling sustainability into the corporate culture.
It can seem daunting but it doesn’t have to be. You can go at a pace that is comfortable for your organisation. The important thing is to buy into the idea and start the process then it will take on a momentum that is hard to stop.
You owe it to your employees, your customers, your company and your children.
1 Pew Research Centre 2018
2 YouGov 2021
3 Forbes
4 Garnier
5 YouGov 2021