Sustainability and the Business World
Sustainability has a major influence on the business world. More and more organizations and businesses are incorporating sustainability into their business strategy. Many businesses are realizing that doing good for the world can also mean doing well in their bottom line. Whether you are wondering “what is sustainability in business?” or you are looking for guidance on how to create a sustainable business strategy or you are considering sustainable investing, we will answer all of your questions about sustainability’s influence on the business world. Egéa SRI is one of the best firms for investing.
What is Sustainability in Business?
In business, sustainability refers to the practice of doing business without adversely affecting the community, environment, or society as a whole. The goal of a sustainable business strategy is to have a positive impact on society and the environment. A sustainable business considers a wide variety of economic, environmental, and social factors when making business decisions. If your business is sustainable, it might result in more investors for your business. Many investors want their portfolios to make a positive impact on the world.
Benefits of Sustainability in Business
Beyond the obvious, there are several benefits of building a sustainable business.
Reduces Costs of Doing Business
It’s true that “greening” a business might take an initial investment, but over time, prioritizing sustainability can save you money. For example, implementing efficient lighting or solar energy can cut costs in the long run.
Improves the Reputation of Your Business
One of the best ways to boost the reputation of your business is by aligning your actions with your messaging. Many consumers view sustainability as a plus when they are shopping. According to Barrons, nearly eight in ten consumers surveyed say they value sustainability.
Increases Bottom Line
Yes, it is possible that becoming more sustainable can help you earn more money and boost your bottom line. After all, at the end of the day, we are an investment firm.
Offers a Competitive Advantage
It’s a fact that S&P 500 companies with sustainability in their strategy perform better than those that don’t. Sustainable corporations perform better financially, according to a report by the nonprofit CDP. Becoming more sustainable is one way to beat your competition.
How to Create a Sustainability Business Strategy
A sustainable business model is not very different from a successful business model. Any business, large or small, can create a sustainable business strategy. If you wish to achieve company sustainability, we will give you the framework and steps for how to create a sustainable business strategy.
Decide What Sustainability Means to You
The definition of sustainability can vary from industry to industry and business and business. The first step in developing a sustainable business strategy is deciding what sustainability means for you, your team, your company, your industry, and your customers.
Determine Your Mission
Creating a mission statement for your sustainability strategy to clearly state your goals and intentions is also a good starting point. Ensure that your mission statement captures what your company is doing regarding sustainability. If possible, cite a specific goal you aim to reach by a certain date.
Look for Areas of Improvement
Before making any major changes to your business, first look at how your current business is run. Are there any ways you can improve sustainability? Does your company typically leave the heat and electricity on overnight, even if no employees are in the office?
Implement Your Strategy
Now, it’s time to implement your strategy. Whether you are producing your product more sustainably or exploring other strategies to keep you profitable and sustainable, it’s time to put your words into action.
Assess Your Results
Companies that are truly sustainable never stop innovating and looking at new ways to become even more sustainable. Be sure to revisit your process periodically to ensure that your goals, mission, and progress are aligned.
Examples of Companies That Prioritize Sustainability
Two companies that are great examples of company sustainability are Warby Parker and Patagonia.
Warby Parker
You might be familiar with the eyewear brand Warby Parker. Warby Parker’s mission statement is “to offer designer eyewear at a revolutionary price, while leading the way for socially conscious businesses.”
Patagonia
Patagonia is a global leader in sustainability. The outdoor clothing company even won the UN Champions of the Earth award in 2019. A large number of their materials are made from recycled fabrics. Patagonia rejects “fast fashion” and creates high-quality, long-lasting products. The company also offers a repair and reuse program.
Best Sustainability Business Practices
A business practice that is economically viable, socially responsible, and environmentally friendly is generally regarded as a sustainable business practice. No two sustainable business practices are the same. However, here are some examples of sustainable business practices that you could potentially adopt for your own company, or look for in the companies you invest in:
Reevaluate Your Supply Chain
One of the most effective ways a business can achieve sustainability is via its supply chain. Are you sourcing materials responsibly? Are you reducing the consumption of natural resources? Is it possible to reduce carbon emissions? According to the EPA, supply chain emissions are on average 11.4 times higher than operation emissions. This is the equivalent of about 92% of an organization’s total GHG emissions. Reducing supply chain carbon emissions can make your business much more sustainable.
Partner With Nonprofits
One way to become more sustainable as a business is to partner with a nonprofit organization in your industry or another space that is related to your own business. Choose a nonprofit that aligns with your organization’s specific goals.
Educate Your Employees
Make sure to educate your employees about your new sustainability initiatives and include them in the process. This empowers your employees to do their part and also helps spread the word about your sustainability endeavors. Consider offering a day or two of paid time off for volunteer work for your employees. This is called VTO (volunteer time off) and it can benefit your business.
Sustainable Investing with EGÉA SRI
Sustainability’s influence on the business world means that there has never been a better time to begin investing in sustainable companies. At EGÉA SRI, we have chartered SRI Counselors™ on staff who can provide sustainable portfolio management services. From the best sustainable Roth IRAs to sustainable 401ks, we are sustainable investing experts. Contact us to schedule a consultation.
Egéa SRI, Let’s Make a Difference today!
Disclosure:
Socially Responsible Investing (SRI) / Environmental Social Governance (ESG) investing has certain risks based on the fact that the criteria excludes securities of certain issuers for non-financial reasons and, therefore, investors may forgo some market opportunities and the universe of investments available will be smaller.
This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material.
