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 Why Sustainability matters for the development of the business?

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In business, sustainability plays a crucial role in creating long-term value and prosperity, enhancing reputation, attracting customers and talent, reducing costs and risks, and driving innovation growth.

A study by the World Wildlife Fund found that businesses should implement more energy efficiency measures to save an average of 30% on their energy bills.

It’s not just for business purposes; consumers are also driving the need and demand for operations to be more sustainable. Sustainable practices are able to improve the company’s reputation and also attract more new customers. As per Nielson’s report, 66% of global consumers are willing to pay more for products and services from sustainable brands.

It has also been observed by a study done by Cone Communications that 72% of employees are likely to be more loyal to companies that are committed to sustainability. It also encourages employees to be more engaged and productive when associated with companies engaged in creating a positive impact on the world.

Sustainable businesses are well-positioned to capture new market share due to their awareness. Consumers are becoming more conscious of the environmental impact of their purchases and are likely to choose products and services from sustainable brands.

As per the Boston Consulting Group, sustainable businesses grow 2.5 times faster than their non-sustainable counterparts.

As per the World Economic Forum study, companies that are more sustainable are also more profitable.

According to the Harvard Business Review, sustainable companies are likely to attract more talent and retain it at the top.

As per the McKinsey Global Institute, the global market for sustainable goods and services is expected to reach $12 trillion by 2030.

The top reasons why sustainability matters for the development of a business are:

  • Sustainable businesses are able to handle the world’s most major problems, such as climate change, resource depletion, social inequality, and human rights. In the UN Sustainable Development Goals or the Paris Agreement, businesses are able to contribute to positive environmental and social impacts to demonstrate corporate responsibility.
  • Sustainable Businesses with a competitive advantage can differentiate themselves from their rivals by offering products or services that are environmentally friendly, socially responsible, or ethically sourced, appealing to the growing demand of conscious consumers valuing sustainability. As per Nielsen, 66% of global consumers are willing to pay more for sustainable brands. Sustainable also supports attracting businesses to retain the best talent, mainly millennials and Gen Z, who prefer to work for more purpose-driven organizations.
  • Sustainable businesses reduce costs and risks, improve efficiency, and improve performance. Sustainable practices such as using renewable energy, recycling materials, or improving working conditions can lower operational expenses. According to McKinsey, companies with high environmental, social, and governance (ESG) ratings are consistently outperforming the market in the medium as well as in the long term.
  • Sustainable businesses drive innovation and growth to create new opportunities by embracing sustainability as a core value and a strategic framework. Businesses also foster a culture of creativity and collaboration to generate new ideas and solutions for sustainability challenges. According to BCG, companies that invest in sustainability innovation achieve up to 19% higher returns than their peers.
  • Consumers are also interested in brand reputation, demanding that companies prioritize sustainability and differentiate themselves from competitors to build a positive brand reputation.

In my opinion, sustainability is one of the crucial aspects for any business to thrive in cut-throat competition. Sustainability is important for long-term growth in the market as well as encouraging employees to stay in the business or company by seeing the value it can add to society.

Sources:- Harvard business School Online, Forbes, greenbusinessbureau, businessgo, Maryville university

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