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Forget Tree Hugging - Sustainability is a Competitive Edge

Notwithstanding the invariably devastating impacts bore witness by the climate crisis or the ensuing planetary erosions that are only starting to rear their ugly heads, there are myriad other reasons – compelling business reasons – to transition towards a greener business model.

This article intentionally disregards the tenable moral arguments supporting sustainability (though, I would implore you to keep those in mind as you read this article) and emphasizes, instead, the compelling yet largely ignored business opportunities underlying the climate crisis as they relate to organizational competitiveness.

And by organizational competitiveness I mean the aptitude to leverage strong sustainable practices, as one would any competitive advantage (say, human resources or public appeal – as we will discover below), to yield demonstrably better results, returns or other measurable outcomes compared to competitors’ with poorer sustainability practices.  

Listed below are two consequential reasons to adopt sustainability-turned-competitive advantages within your business:

Human resources

Sustainability, like human resources, is only starting to take seat around the proverbial executive table and it too involves engaging in discussions with key stakeholders, understanding opposite parties’ respective needs, and weighing a balance between the organization’s strategic interests and its wide-ranging partners’ collective and individual ones;

Bearing the overlap between sustainability and human resources in mind, it becomes apparent then that when sustainability improves, so too does human resources (I will explain).

Human resources exists, in its broadest context, to engage employees through a vibrant and buoyant corporate culture, to align them under a shared collective vision, to provide inspiring work that appeals to employees’ interests, to ensure a healthy and unintimidating work environment, and to retain talent all while promoting attractive openings unto prospective new talent.

Simply put, human resources hinges on its ability to engage, align, and attract people. Sustainability contends a similar role: it too engages employees with challenging, albeit exciting, problems, aligns stakeholders behind a shared green vision, and, through achieving the latter two points, attracts new employees to the organization’s responsible approach to business while also reducing the organizations environmental impact.

And as businesses grapple with newer and less resource-depleting ways to retain or attract talent, sustainability becomes increasingly important and serves as a distinguishably competitive way to get one up on competitors.

That said, truth lies in numbers. Here they are: Morale among employees within companies with strong sustainability programs saw a 55% increase compared to the base value and thereby reduced turnover, absenteeism and burnout by 25% to 50%. All to say that strong sustainability equates to a demonstrably stronger human resources. (Download our business case to see more stats like this)

Public appeal

Organizational prosperity relies largely on consumers, suppliers, or partners and on their willingness to work with organizations based on their service, quality, price and, increasingly, their resulting social or environmental impact. Consumers are overwhelmingly concerned by the role businesses play in either exacerbating or curtailing climate consequences (87%) and vehemently support companies with purpose-driven missions (79%).

That matters because businesses, big and small, exist to serve customers and thereby rely, in massive part, on their repeated purchases and loyalty or on attracting newer customers. Among the growing consumers that are concerned by the role business plays in the climate crisis, 54% reported their willingness to spend a premium on products that are either socially or environmentally procured whilst another 50% surveyed expressed interest in switching to brands with stronger social and environmental strategies.

All to say that in a business’s quest to appeal to its consumers, suppliers or partners and as a way to distinguish its value proposition among competitors, sustainability represents a proven competitive advantage. Be it through limitations in scope 1, 2, and 3 emissions, compliance with internationally recognized accreditations or protocols, waste reductions, circular packaging, or merely embedding green practices into corporate policies, sustainability makes good business, hedges any looming scrutiny, and espouses a truly sustainable competitive advantage – in a dual green and business sense.

So businesses, stop equating sustainability to tree hugging and start seeing it as a competitive advantage!

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