Monday, July 13, 2015

Sustainability is a Strategic Imperative for Businesses and Investors

Sustainability continues to grow in value among members of the business community, investors and the general public. Sustainability is a superior long-term investment for both businesses and investors. Businesses benefit from decreasing their costs, increasing their revenues and good PR. Investors see the unbeatable combination of profitability, long term viability. Both the businesses community and investors see the merit of reducing their risk exposure.

According to a study by Morgan Stanley released in May almost three quarters (72%) of investors place a premium on sustainability. The business case for sustainability is getting stronger by the day. It is becoming increasingly clear that money invested in sustainability is money well invested.

There is also the ancillary advantages to going green for employees. This includes everything from attracting better quality employees to a more loyal workforce that is more productive and takes less sick days.

There are a host of ways that businesses can reduce their environmental footprints. This includes efficiency initiatives, recycling, waste reduction, reducing energy consumption, distributed renewable energy, office redesigns, daylighting, weatherization, green building, sustainable supply chains and more efficient manufacturing.

PNC bank demonstrated a significant financial return by installing NSF certified sustainable building materials. They found that they were able to secure higher deposits than non-LEED certified locations. The financial returns associated with sustainability have been demonstrated in a number of other companies. Marks and Spencer invested £200 million to deliver a sustainability plan, which focused on better use of energy in stores and distribution centers, reducing packaging, and recycling or reusing materials such as hangers. It took them just a bit more than four years to pay back their initial investment.

As explained in a Triple Pundit interview with McGee Young, sustainability is about connecting with your customers and being resilient, “It’s about being able to sustain yourself in a future that’s going to be defined by disruption and change.” Young is the founder of MeterHero, which helps companies cut their impact through consumer engagement.

“If your company doesn’t adapt,” says Young, “a startup will come along, and you will likely get blown out of the water, because your business processes were designed for an era of surplus. Other companies will eat your lunch. It’s really all about your ability to think beyond your current market.”

The research bears out the fact in addition to being good corporate citizens and responsible investors, strong environmental, social, and governance (ESG) practices provide bottom line benefits for both businesses investors. Sustainability is not just a feel good approach that benefits people and the planet it is a strategic imperative.

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