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5 Convincing Benefits of Sustainable Business Practices
The concept of sustainability in business practices has rapidly gained importance over the years. There is growing awareness about crucial issues like global warming and the overuse of depleting resources among the masses. Consequently, people are actively looking for alternative products and services that suffice their needs with minimum negative consequences to the environment.
Plenty of proactive companies are shifting and adjusting their operations to incorporate sustainable practices. In today’s ever-changing and dynamic world, businesses no longer have the option of taking sustainability practices lightly if they seek to survive in the market.
So, what exactly is sustainability when it comes to a business? It refers to devising practices and strategies that help make the world better for this generation and the next generations. Nonetheless, it is not only limited to environmental changes that are taking place. By definition, sustainability comprises three significant implications; environmental, social, and economic. Therefore, a sustainable business focuses on its financial gains alongside its impact on the world, particularly the environment and society. Companies have plenty of opportunities to ‘go green’ such as reducing wastage and pollution, using renewable energy and biodegradable materials, community volunteering, and more.
Now, let’s determine five advantages you can gain by making your business practices more sustainable.
Improved operations and lower expenses
Sustainable business practices pave the way for a company’s longevity and survival in the market. A notable benefit gained from adopting techniques such as green manufacturing is cost-effectiveness.
For instance, simple recyclable material for packaging helps reduce costs significantly rather than spending tons on harmful packaging materials. The use of renewable energy alternatives is another prime example of cutting down expenses. However, deploying renewable energy and evaluating its costs and benefits can prove challenging. Fortunately, with the help of demand management, you can track your energy requirements and capacity and control costs. Smart energy utilization will enable your business to curb inflating energy costs and achieve operational efficiency.
Enhanced corporate social responsibility
The cruciality of corporate social responsibility cannot be stressed enough in today’s world. Modern-age consumers favor businesses that promote social and ethical values and support the marginalized. It instills the consumers with a sense of affiliation or positive associations with the company, boosting the brand image and customer loyalty. Therefore, it is wise to work towards a social cause that the target market strongly believes in to forge better customer relationships.
According to a recent article, a growing majority of consumers expect businesses to promote initiatives that benefit and support the people, planet, and plants. It’s known as the triple bottom line approach. The latest study by Accenture highlights the rise in purpose-led brands, serving as an indication of consumers engaging with brands that have a socially responsible image. A perfect example would be Google. It occupies the top ranking on RI’s CSR score, majorly due to high energy conservation at their data center and more than $1 billion in investments in renewable energy.
Better relationship with employees
Employees, like the consumers, also want to be part of a company that strives towards the greater good. A business that practices sustainability needs to take the interest of the employees into account. It is especially true when a company is attracting new talent, particularly the younger workforce, as they are more aware and passionate about social causes.
According to a survey, 45% of employees find a company more attractive if it incorporates sustainable business practices. Retaining a valued workforce is thus also less of a hassle if the company has a positive image in the market. Patagonia serves as a good example. The company persuades and empowers its employees to participate in the green programs and become part of the change. As a result, the company experiences only 4% employee turnover.
Rising demand for sustainable goods
The latest WWF research indicates an astonishing 71% increase in the consumers searching for sustainable and green products. The segment, which used to be a niche a few years ago, is turning out to be a lucrative opportunity for market expansion. With rising awareness about social and environmental problems, consumers are actively looking for environment-friendly products. Whether in fashion, beauty, food, beverage, pharmaceutical, or other industries.
Many international fashion brands such as Levi’s have identified that their industry is one of the most prominent contributors to landfill wastage. Thus, they are working towards making their apparel and accessories more sustainable. It helps the company in attracting a wider audience of customers and ultimately increasing its sales revenue. Another major cause of pollution, the pharmaceutical industry, has also invested more towards R&D in making their operations less environmentally damaging.
A survey by Nielsen suggests that this segment of consumers looking for sustainable goods is likely to rise to a value of $150 billion in 2021. Therefore, companies need to be swift in responding to this rising new market by providing them with precisely what they seek and reap the benefits in return.
Increased Profits and Investments
The above advantages indicating improved revenues and lower expenses suggest a substantial increase in businesses’ net profits, their prime objective. Undeniably, it would turn out to be a favorable outcome for the stakeholders of the company. It can also provide resources for more research and development for implementing better sustainable business practices in the future.
Rising profits signal current and potential investors to invest more in the company. Coupled with the fact that the business has long-term plans for sustainability is an added plus as far as investment is concerned. The concept of socially responsible investments has gained immense popularity. Thus, more investors want to put their money into projects or companies with a broader positive impact and higher financial gains.
Conclusion
The future is undoubtedly green. With the rising awareness of consumers, employees, and investors regarding social and environmental concerns, the market dynamics have changed substantially. With shifting trends, a business needs to be proactive enough to take advantage of any opportunity that presents itself and mitigate any potential threats.
Sustainable and green practices are, therefore, both an opportunity and a threat to a company. Businesses that do not recognize this opportunity today might be wiped out of the market soon by the competitors. Along with focusing on conventional business strategies and practices to stay relevant, a business needs to invest in sustainable practices for its long-term survival.
Running a successful business can be one of the most rewarding endeavors an individual can pursue, both financially but also due to the satisfaction it can bring. With that being said, running a business, be that a small start-up, mid-sized enterprise, or a global brand, managing your business is not easy, especially if you’ve never been in that position before.
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