In many ways, the pandemic has been a catalyst for cementing consumer power. People are more informed than ever, and are carefully examining the social good and corporate responsibility of the companies they spend their money with. A study from Accenture found, for example, that 50% of respondents would be more inclined to support a business if it stood for societal and cultural issues.
Against the backdrop of the 2030 deadline set to realise the UN Sustainable Development Goals, it is undeniable that the private sector has a hugely important role to play in championing real change within the sustainability space. It is, in fact, as much of an imperative for business as it is for the planet. Companies, and the business community as a whole, have a unique opportunity to make this a core part of their mission and their purpose, and build social and environmental good into every level of their organisation.
Most entrepreneurs go into business to solve a problem or take on a challenge. Sometimes they have spotted a gap in the market or believe they can offer a novel solution to an existing issue. While this is a core aspect of the entrepreneurial mindset, increasingly, we must shift this dialog towards not only what solutions a business provides, but also what problems they may create in doing so.
The use of unethical practices and unsustainable materials and processes all contribute to this, and these must be recognised from the outset if a business is to truly commit to driving sustainability within their sector. Being upfront about these issues, and committing to championing better practices enables a company to be proactive in their approach, and incorporate ethical, sustainable methods and materials into the business purpose from the very start.
Understanding where your organisation has the most potential to make a tangible and positive difference, and then aligning your operations with this is key to creating real positive impact.
Profit and purpose
The age of separation between business targets and sustainability or ESG targets is over. More companies realise that if they want to maintain relevance and a competitive edge, wile garnering the consideration and support of increasingly conscious consumers, the pursuit of profit must be integrated with, and not at the cost of, environmental and social concerns.
A 2020 McKinsey Global Survey on valuing ESG programs found that 83% of C-suite leaders and investment professionals say they expect ESG programs will contribute more shareholder value in 5 years. Further, companies already possessing high ESG performance enjoyed on average 3.7 times higher operating margins than those of lower ESG performers.
Clearly, profit and purpose do not have to exist in two separate vacuums. While profit is, of course, vital to the survival and success of any private venture, it does not have to be at odds with sustainable choices. Increasingly, companies are taking a long-term view of these issues by investing in sustainable technology and modes of operation that will save on costs in the long run, while offering efficient and eco-friendly methods of achieving results.
As technology and innovation drives us forward in business, it does not have to be a choice for businesses whether they want to operate profitably or with positive purpose – both can and should be addressed.
Driving the sustainability agenda
Businesses that wish to build purpose into the heart of their brand must begin transitioning from reactive to proactive efforts towards sustainability, and build the entire culture of an organisation around this purpose.
The first step towards this is accountability. Companies must hold themselves to certain standards that are in line with their stated values and mission, whether this is in terms of the materials used, distribution of products, or simply a commitment to investing in sustainable technologies and initiatives.
Transparency is also crucial, as the business community can only have an impact if they are committed to being open and honest about the efforts they are making, or plan to make. Likewise, openly communicating the purpose and values of a business between all levels of the company not only ensure the vision is understood, but help to engage the entire organisation in getting them to stand firmly behind this purpose.
Far from shallow and surface-level attempts at greenwashing by unscrupulous organisations, the companies that seek to make real, positive differences are those that operate with purpose at the forefront.
To enact real change, sustainability efforts must be systematic, and this means creating fundamental changes within industries and sectors. While one company alone may not be able to achieve this, it is these companies who are actively paving a path for others to follow, making an investment in the future of their businesses, as well as the future of the planet.