In this guest post, writer Jane Marsh shares her thoughts on how sustainability has become intrinsically entangled with growth and how those who ignore sustainable practices are setting themselves up for failure.
Prioritizing sustainability is a requirement businesses must commit to as customers and governments demand more accountability and transparency. Companies failing to promise positive climate initiatives lose relationships and tarnish reputations. Incidents like greenwashing claims expose the exploitative reality of commerce and industry.
Fewer people tolerate it and more want to live in a positive, supportive population healing the planet. What consequences can an organization anticipate if it falls behind in becoming greener?
Dismantling stakeholder trust
Stakeholders include more than investors. Environmental advocates manifest as business partners, consumers, governments and nonprofits. Enterprises will not lose simply one demographic for being environmentally negligent — all of them are on the line. The issue can become more pressing if companies realize keeping the planet livable also means keeping their doors open and profits high.
The world’s most prominent investor, BlackRock, led the charge by announcing withdrawal from investments with high sustainability risk — plus initiatives like a $1.22 billion climate infrastructure fund in New Zealand. Here are other ways brands enhance their sustainability efforts to impress stakeholders:
- Changing to renewables
- Impact investing
- Improving worker conditions
- Carbon offsetting
- Energy consumption reduction
Every stakeholder category looks at environmental, social and governance objectives. Current and prospective employees want responsible management. It increases retention and worker satisfaction, which yields cost savings and market demand.
Buyers expect eco-friendly products and supply chain practices. Otherwise, they will call out organizations on social media for false advertising and greenwashing. A shareholder pulling out funds could make or break an entire business failing to have diverse, balanced investors. The risks are too high and diverse to tempt. Levi’s experienced this by attempting to appeal to customers with a jean made from garbage — a failure to adopt a genuinely sustainable jean led to a barrage of consumer questions and how unsustainable it was.
Failing to innovate
A few historical upheavals forced businesses to change their operations. Consider how much the internet or automation altered procedures and productivity in group companies and small businesses alike. Outfits needing to embrace them lost competitive advantage. Sustainability initiatives work similarly.
Eco-friendly thinking forces organizations to rewire every step of a business in a way fitting modern needs, whether through decarbonization or energy efficiency. Every instance of process discovery requires incorporating innovative sustainable solutions or technologies, meaning negligent brands cannot bank on how sustainable practices catalyze innovation.
For example, startups in Pittsburgh, Pennsylvania, received accolades for how green ideas brought innovation to the city. The startups rewrote traditional employee benefit scripts to make them greener and provided citizens with mobile air quality sensors.
Sustainable innovation bleeds into other sectors, such as transportation and health, when green startups create software to notify the city of bike lane accidents. Environmental advocates helped bring bike lanes to the town and innovation inspired tech and health to improve everyone’s lives.
Corporations must catch up when acknowledging the ripple effects of eco-conscious imagination in a corporate setting. The more creative a brand becomes, the better its reputation becomes.
Missing the big picture
ESG comprises more than explicit eco-conscious goals. Stakeholders want to see carbon footprint reductions, lobbying for green policy, and commitment to renewable energy. Corporations failing to address related issues cannot garner loyalty because activists collate other issues with environmentalism, including:
- Human rights
- Ethical business practices
- Diversity, equity and inclusion
- Health and safety
- Risk management
- Compliance adherence
The topics fall under the social and governance aspects of ESG. It is essential to acknowledge corporate responsibility for the environment is part of a grander global ideal. Climate change discourse has evolved, becoming synonymous with other issues of fairness, quality of life and accessibility.
Justice for the planet equates to fair treatment for everything, including workers, biodiversity and even data. Considering connecting threads improves human health, food quality and workplace contentment, to name a few.
Sustainability equals business growth
Budgets and priorities must shift and get creative to allocate resources for sustainable plans. Corporations must undergo the same cultural shift stakeholders went through when developing environmental urgency.
The worst-case scenario is a company goes under as it fails to hold itself accountable and align its values to the public interest. Eventually, companies will promise to protect the planet out of habit instead of obligation.
Jane Marsh works as an environmental writer, covering topics such as sustainability and green living. She is also the founder of Environment.co
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