Summary: Businesses that embrace eco-friendly, sustainable practices could find they gain a crucial advantage over their competitors.
If your business is always looking for opportunities to gain an advantage over the competition, embracing eco-friendly practices could be one of the most effective ways to do so.
An increasing number of firms are recognising the importance of sustainable business methods, which can deliver a wide range of benefits.
Reduced costs
Eco-friendliness and sustainability in business are closely linked to better efficiency.
There are many ways being more efficient can reduce your outgoings. Taking an innovative approach to reusing resources, for example, can help you cut down spending on new materials, while streamlining transportation of people and goods will also help to minimise costs.
Installing renewable energy systems such as solar panels and biomass boilers can have a huge impact on your bills. Measures like these require upfront investment, of course, but should pay for themselves in the long run.
Increased sales revenue
The rise of conscious consumerism has shown there is a large market out there for goods and services that are derived from ethical, sustainable practices. The organic products sector is now worth some £2.33 billion, following a 5.3 per cent increase in sales in 2018, according to Soil Association Certification’s Organic Market Report.
A Nielsen report from 2016 revealed that two-thirds (66 per cent) of survey respondents would be willing to pay more for sustainable goods, up from 55 per cent in 2014 and 50 per cent in 2013. The proportion was even higher among millennials.
More longevity
There is evidence to suggest there is a link between the sustainability of a business and its longevity, possibly thanks to the benefits of efficient practices.
Research by Corporate Knights, a sustainability-focused financial information group and magazine, revealed that the average age of a company on its Global 100 list of the world’s most sustainable businesses is 87 years. By comparison, the average age of firms in the MSCI All Country World Index (ACWI) is 63 years.
Corporate Knights CEO and editor-in-chief Toby Heaps pointed out: “From inception (February 1, 2005) to December 31, 2018, the Global 100 made a net investment return of 127.35 per cent, compared to 118.27 per cent for the MSCI ACWI.”
A positive brand image
Creating a strong brand is a key objective for many businesses, and showing your commitment to issues such as sustainability and environmental protection can help portray your brand in a positive light.
Erin Hinton, senior sustainability consultant at consulting firm Shift Advantage, told the Portland Business Journal that Nike’s commitment to sustainable business is a key component of its competitive advantage.
“Nike has nurtured the nuanced relationship between brand, employee and consumer by placing a strong positive emphasis on people,” she said “That emphasis, plus more traditional sustainable business decisions, have been key to Nike’s continued dominance in the footwear and apparel industry over the years.”
One of Nike’s biggest competitors, Adidas, has seen positive results from a project to make eco-friendly trainers out of ocean plastic.
Reduced regulatory risk
Sustainability is an area of business that is attracting more regulatory attention, with governments and authorities around the world enforcing new rules to mitigate the impact companies are having on the environment.
By introducing proactive measures and ‘getting out in front’ of regulatory change, you can reduce the risk of compliance problems and avoid the costs that often result from having to take reactive action when rules and laws change.
Further Reading
Find out how important working for a ‘green company’ is to employees according to our latest survey.
Sources
Energy Efficiency: The Benefits to Businesses. Business Green.
Rise of the conscious consumer drives sales as UK organic market hits £2.33 billion after seventh year of growth. Soil Association.
73 Percent of Millennials are Willing to Spend More Money on This 1 Type of Product. Inc.com.
The Global 100 difference. Corporate Knights.
Why going green gives your business a competitive advantage. The Business Journals.
Adidas selling new eco-friendly sneakers made from ocean plastic. Business Matters.
Environmental regulations. Law Donut.
