Sustainability is rapidly becoming one of the most critical corporate responsibilities. Aside from ethics, sustainable business practices prove valuable in procuring and retaining talent and investors, lowering operating costs, attracting and securing a consumer base, receiving tax credits and grants, and more.
Sustainability in business means adopting practices and policies that ensure production and operation do not negatively influence environmental and social aspects.
Sustainability initiatives drive business longevity, help to maintain compliance, and give companies an edge over the competition. Employees, shareholders, and customers favor transparently sustainable businesses. Here, we explore six reasons why your business should embrace sustainability.
1. Meet Regulatory Compliance
Industry regulations and global corporate standards consistently evolve to meet present needs. Environmental concerns are at the forefront of societal challenges, and regulations are changing across all industries to address them.
Government organizations, like the Occupational Safety and Health Administration (OSHA) and the Environmental Protection Agency (EPA), monitor company protocols. Recently, OSHA has put a spotlight on sustainability, while the EPA enforces national sustainability compliance initiatives.
Violating OSHA and EPA regulations can lead to criminal consequences. Some punishments for violations include hefty fines, citations, and jail time. Implementing sustainability strategies helps protect your business from potential regulatory contraventions.
2. Heighten Competitive Advantage
Corporate sustainability investment improves financial performance. A commitment to sustainable practices builds investor trust and drives effective marketing.
Harvard Business School illustrates how sustainability-focused corporate strategies allow companies to outperform those lacking the same initiatives. Environmental concerns also sit at the top of shareholders’ concerns when allocating investment funds.
Investor and customer attraction to businesses prioritizing sustainability efforts come together to push performance forward, giving these businesses a significant capitalist edge.
3. Minimize Operational Expenses
Operating costs are lower for a business that mitigates the use of extraneous packing and production materials, water, and energy. The short-term cost of transitioning to sustainable practices is often initially higher, but the long-term savings are significant.
Using fewer transport vehicles, upgrading recycling efforts, and curtailing energy use in facilities are ways to raise responsible operating methods and reduce expenses over time.
One example of a sustainable business approach that slashes carbon footprints and saves companies boatloads of money is transitioning employees to a remote working model.
Not only does this reduce emissions by eliminating commutes, but it also lowers operating costs and preserves resources by downsizing facilities. Remote models do not work for all industries but can be environmentally and financially successful when compatible.
4. Attract and Retain Professional Talent
Saving on recruiting and turnover costs is one of the contributing factors to sustainability-minded businesses performing strongly. Top talent seeks out companies with strategic sustainability initiatives.
Studies show that the majority of Millennial professionals will not work for a business that does not possess high levels of corporate responsibility, including sustainability efforts. Embracing procedures that communicate strong values is critical to retaining employees and fostering productivity.
5. Receive Funding and Tax Benefits
Depending on where a business operates, it might qualify for certain tax benefits based on its sustainability initiatives.
For example, the City of Philadelphia offers a Sustainable Business Tax Credit to companies that prioritize environmentally and socially protective policies. This includes working with underserved communities, taking environmentally-conscious action, and promoting sciences and arts.
Countries like Ireland and Canada provide corporate allowances to businesses adopting sustainable procedures. Businesses operating in New York are eligible for grants and other financing options if they meet certain sustainability requirements.
It is important to research where your business operates to identify which credits or funding opportunities are available for companies incorporating sustainability strategies.
6. Build Consumer Trust and Loyalty
Successful businesses have strong and ongoing relationships with their consumer base. Embracing sustainability is one way to secure the loyalty that strengthens these relationships.
Similarly to employees, customers seek out businesses that align with their values. Eco-friendly products and business models are a powerful driving force behind buying, particularly with Millenial and Gen-Z consumers.
Expectations for transparency and accountability from businesses are higher than ever. Adopting a sustainable approach demonstrates a commitment to corporate responsibility that consumers respond to.
Every popular supply chain blog frequently mentions sustainability, pointing to its growing importance for today’s businesses. Sustainable practices and initiatives offer substantial environmental, social, and financial advantages to businesses of any size.
Research the tax credits or grant opportunities local to where your business operates and explore public programs to potentially partner with as you transition into a sustainable strategy.
Embracing sustainability improves business performance, lowers long-term operating expenses, and attracts and retains customers, investors, and employees.