Sustainable business initiatives look different depending on the company and its industry. Some choose to reduce their environmental impact by focusing on more energy-efficient facilities or moving entirely to renewable energy. Others may look for efficiencies in their supply chains. For instance, businesses may choose logistics providers that transport cargo with a fleet of energy-efficient hybrid and electric vehicles. Or they may audit their suppliers and work more with ones that maintain a lower carbon footprint.
Sustainability initiatives often go hand-in-hand with a company’s values and goals. Take LEGO Group as an example. According to its mission statement, LEGO aims “to be a global force for learning through play.” With this child-focused mission, it makes sense that the company wants to maintain a healthy world for children’s futures.
LEGO uses
a multi-pronged approach to environmental sustainability. Their strategy includes manufacturing with sustainable materials, promoting LEGO brick donations to encourage a circular economy,
eliminating single-use plastic packaging, eliminating waste, and reducing their carbon emissions by using more renewable energy and globalizing manufacturing to move closer to its customers.
- Close proximity to major markets
- An ability to build a carbon-neutral factory with a nearby solar farm
- Access to a skilled manufacturing workforce
As LEGO demonstrates, business sustainability can go beyond environmental practices to include the longevity of a talented workforce. This is why some sustainability initiatives also focus on workforce diversity and equity. The idea is that diverse perspectives bring a wealth of valuable ideas that can benefit a business. When businesses treat employees equitably, they’re more likely to retain great talent.
Most people feel businesses have a social responsibility to their communities. Businesses that ignore this responsibility often prioritize short-term profit over long-term impact. These companies are more likely to suffer from poor public relations which can eventually hurt their bottom lines. On the flip side, socially responsible businesses can gain a competitive advantage that improves their financial performance.
Research backs this up. You may have heard of ESG ratings: ESG stands for environmental, social and governance. The ESG metric helps measure and track a company’s societal and environmental impact. The higher the score, the more socially responsible an organization is.
McKinsey’s global survey found that investors and C-suite leaders consider companies with higher ESG ratings to hold more value. In fact, many say they would be willing to pay a
10% premium to buy a company with a positive ESG record over a negative one. This could be due to the fact that companies that are highly rated for sustainability enjoy higher operating margins and annual shareholder returns, according to
Accenture research.
Employees also appreciate working for businesses with sustainable practices. According to the National Environment Education Foundation, nine out of 10 employees who engage with their company’s sustainability goals
say they’re more satisfied at work and have more positive feelings about their employer.
All considered, your business can reap the following rewards by working to be more sustainable:
- Growing more attractive to investors, customers and employees
- Improved operating margins and financial performance
- Gaining a positive public perception
- Maintaining compliance with national and local environmental laws and regulations
- Serving a higher purpose
