What Does It Mean to be a Sustainable Business?
When we talk about sustainable business, we expect companies to meet their needs without negatively affecting the environment, society and local communities.
Strategies to become more conscious differ for every business, but what’s crucial is that they make decisions based on their values whilst considering the planet and the people living on it. This is where sustainable business decisions evaluate a wide range of environmental, economic, and social concerns and provide a long term business value.
If this is not considered, the opposite will happen, leading to deep inequalities, human rights violations and the exploitation of the environment and its natural resources.
There are different ways for your business to take on this responsibility. It could be by using sustainable materials and reducing greenhouse gas emissions. You could utilize renewable energy sources instead of fossil fuels and even offer funds to local communities that support your values or require help.
There are numerous ways to make a positive impact on our planet and, if you haven’t yet, now is the time to take one step towards a more sustainable approach.
Climate change is altering our world, and time is running out. Deforestation, pollution, CO2 emissions and the increase of intensive agriculture is causing extreme weather patterns and affecting the people and wildlife that live on planet earth.
Every year temperatures keep increasing, flooding and droughts are getting more common, ice caps are melting, and sea levels are rising. But there’s no need to make a list really, we all know what’s happening. We can all see evidence of this climate crisis, whether by watching the news or simply by stepping out of our front door.
The pressure is on for everyone to do what they can. The UN, with the support of Futerra and various governments and organisations, created the Good Life Goals. This blueprint, based on each of the 17 Sustainable Development Goals, consists of 85 individual actions that people can take to fight climate change. It is a great way to help people incorporate more sustainable practices to support the SDGs whilst pushing businesses to adopt these strategies.
Today, consumers (especially the younger generations) are looking for ways to help save the planet whilst satisfying their shopping needs. Indeed, based on a survey, Futerra states that 88% of buyers want companies to help them make a difference.
What’s more is that there are some great benefits to becoming a sustainable business. Here are a few.
4 Benefits of Becoming a Sustainable Business
1. Helps Improve Brand Image and Reputation
Consumers want to buy from businesses that are having a positive impact on the planet and its people. They want to do good, but to do this, they need your help.
We live in a consumer-based society where buying products and services is part of our everyday life. However, more recently, we have learnt about the impact our choices are having on planet earth. It has, and still is, causing deep environmental destruction and social inequalities. Especially for the younger generations, this is a problem that every one of us has to take responsibility for and make the required changes to stop incentivising corporations that are damaging our home.
Thus, it makes sense that being a sustainable business will improve your image and reputation. Customers will look up to you and the products and services you offer, knowing that their purchases will be guilt-free.
So, if you are making a difference by adopting more sustainable practices, shout out about it. Around 43% of consumers think businesses are making it difficult for them to find more sustainable and ethical items. As previously mentioned, 88% of respondents said that they expect companies to improve their social and environmental footprint, and over 70% of consumers want businesses to be fully transparent about their environmental impact.
Promote this aspect as much as you can. This publicity is what will set you apart from your competitors, so take advantage of it.
Patagonia is an American outerwear clothing company founded in the early 1970s by Yvon Chouinard. This year, Patagonia got recognised as the company with the best reputation in the US, based on the Axios Harris Poll 100 reputation ranking. They make their business sustainable by prioritising the durability that reduces energy use, water waste, and waste generation.
The ranking is based on eight different categories including: products/services, trust, ethics, vision, culture, growth, affinity and citizenship. Patagonia ranked first with 82.7 and is seen as the best American brand for culture, ethics and citizenship. It’s also the top choice for Millennials, admiring the brand’s values and ethical standards.
Other businesses that ranked high on this list are Honda Motor company, Moderna, Chewy, SpaceX, Tesla Motors and Amazon.com.
Here are a few reasons why Patagonia is admired by its customers.
In 1993, Patagonia was one of the first brands to use recycled PET bottles in the production of their garments. In 1996, the brand was the first in the world to use organic cotton, a material that is less harmful to the environment than conventional cotton. Also, a year later, Patagonia started using Hemp, one of the most sustainable materials available.
The clothing company also uses recycled fishing nets, natural rubber, Lyocell and recycled nylon.
Since 1985, Patagonia has given 1% of their annual profits to environmental groups that are making a difference in their local communities. Also, in 2002, Patagonia and Blue Ribbon Flies started an international non-profit corporation called 1% For The Planet, where members give part of their profits to help protect and restore the natural environment.
Throughout this past year, Patagonia has funded around 1,020 groups working to help save the world we live in. A few of these communities are STAND LA, One Earth, GrowGood, Indigenous ReGeneration, Environmental Health Coalition, California Institute of Environmental Studies and Environmental Defense Center. So far, Patagonia has donated over $100 million to these environmental and social groups.
2. Attracts a Wider Target Audience
As we’ve seen, consumers want to take actions that will help preserve and defend our planet. Through the Good Life Goals based on the United Nations SDGs, individuals can get a clear insight into how to help fight climate change. Some of these 85 goals push people to buy from companies that treat workers fairly, that use renewable energy, that are sustainable and are doing their part in helping protect and restore the natural world.
So, consumers are constantly on the lookout for brands that can help them make a difference.
But won’t becoming sustainable increase a business’ prices and costs? In some cases, yes it will, but your customers are ready for it. Many consumers don’t want to incentivise the exploitation of workers and our natural resources, and if that means paying a bit more, then so be it.
Younger generations such as Millennials and Gen Z are more willing to pay a higher price for sustainable products and packaging. If they know that a product has been labelled as environmentally friendly, they’ll be more willing to buy it. However, as we’ve seen, many shoppers find it hard to find these companies. So, make sure to educate your customers and make it clear that you’re running a sustainable business.
Thus, by becoming sustainable, not only will you attract your current customers, but your target audience will expand to conscious consumers who want their purchases to have a positive impact on the planet.
Brands that incorporate sustainability as part of their company’s goals will facilitate their future success as sustainable regulations for businesses will only intensify, and the demand for more environmentally conscious products will also increase.
3. Helps Attract and Retain Employees
Making your business more sustainable can help attract and retain employees. People want to work for a company that cares and is making a difference through environmental programmes. They want to feel proud to be working for you and shout out about it to their friends and family. So, becoming more environmentally and socially friendly will increase job satisfaction and, in turn, will improve your business’ reputation.
Employee satisfaction can lead to numerous benefits. For instance, you can achieve higher productivity, increase employee retention, less absenteeism, less stress in the workplace and better team performance. Focusing on your employees and business values will also help you recruit better quality talent as people will be looking for a job that will keep them engaged and satisfied.
Employees want to make a positive impact on the environment and expect the company they work for to take responsibility and commit to becoming a greener business. In turn, their work satisfaction will increase as they will feel like their job is meaningful and fulfilling.
Example: Schneider Electric
Schneider Electric was nominated the most sustainable company in 2021, rising from its 29th position in 2020.
The business wants to be part of the solution and uses digital innovation to make the most of the resources mother nature is supplying. With this in mind, sustainability and efficiency are the two core values of Schneider Electric, incorporating all of the United Nations Sustainable Development Goals into their business plan.
The electric company is committing to 6 long term sustainable efforts between 2020 to 2025. These include acting for a climate positive world, being efficient with resources, living up to their principles of trust, creating equal opportunities, harnessing the power of all generations and empowering local communities.
Schneider Electric’s sustainability and ethical practices have also led to high employee satisfaction. In 2019, the Great Place to Work National Employee Engagement Survey recognised Schneider Electric as one of the best companies to work for.
Two years ago, 80% of Schneider Electric employees said it is a great place to work, compared to the US average of 59%. The statistics also showed that 88% were given a lot of responsibility and that 87% were made to feel welcome when joining the company. Most of the employees, 85%, also stated that the business is honest and ethical and are proud to be working at Schneider Electric.
In 2020, Fortune Magazine placed Schneider Electric 7th in their top 10 list of best large workplaces in manufacturing and production.
In 2021, the company got an even higher ranking within the Great Place to Work survey.
This year, 85% of employees say that it’s a great place to work compared to 80% from two years ago. 91% mention they are given a lot of responsibility and that they are made to feel welcome. Also, 89% state that the management is honest and ethical and that the same number of employees are proud to be working at Schneider Electric.
As seen, all the statistics increased from 2019 to 2021, showing how committed the company is to their employees. Also, having ranked as the most sustainable business in the world, it’s no surprise that Schneider Electric employees are proud to tell others where they work.
4. Get a Better Chance for Funding and Investments
ESG criteria stands for Environmental, Social and Governance. Investors are increasingly using these non-financial factors to understand whether a company is worth investing in. Through this metric, investors can get a better idea of a business’ risk factors and growth opportunities and determine how sustainable, socially conscious and ethical they really are.
Today, any company that’s looking for funds and investments should begin to think about complying with the ESG criteria. In 2020, ESG investing grew by 140% and is still on the rise today. In fact, Bloomberg has calculated that ESG assets will hit $53 trillion by 2025, which is over a third of the total forecasted assets under management.
Environmental, Social and Governance
Let’s have a more detailed look at the three criteria within ESG.
Environmental criteria look at conserving the natural world. Factors include climate change, carbon emissions, energy efficiency, waste management, resource depletion and deforestation.
The social aspect of ESG focuses on considering people, such as workers, suppliers, consumers and local communities. Some of these factors include working conditions, health & safety, customer satisfaction, gender and diversity, human rights and impact on local communities.
Finally, Governance takes into account the standards for running a company, such as anti-corruption and bribery, transparency, corporate governance, shareholder rights and board diversity.
As previously mentioned, investors are now evaluating a company based on these three factors.
Responsible investors, especially from the younger generations, know that the future of our capitalist society relies on the balance between profit and environmental and social responsibility. Indeed, today younger investors want to make decisions that align with their values and find companies that they truly believe in, all whilst looking at short term and long term returns.
So, becoming a sustainable business can increase your chances of getting funding and investments due to your potential for real growth.
Brands That Are Making a Difference: A Good Company and Tony’s Chocolonely
A Good Company
A Good Company was founded in 2018 by Anders Ankarlid, wanting to do everything he could to fight the climate crisis for his children. Since the beginning, his mission has been to change consumers and businesses perception of e-commerce from mindless consumption into conscious decisions.
The brand is carbon negative, meaning that it reduces CO2 more than it creates. They are also fully transparent with their manufacturers, suppliers and consumers to demonstrate their positive impact on the planet.
A Good Company offers everything from phone cases and stationery to personal care. The materials that the company utilizes include recycled nylon, cork, humanium metal, organic cotton, recycled cardboard, bamboo, recycled plastic, soy ink, Tencel and others.
For instance, its phone cases are made from plants (linseed) and are fully biodegradable. So, when the customer is done using the case, they can return it to the business to get it recycled or, they can plant it in their garden to biodegrade.
The brand also sells notebooks and scrapbooks made from stone paper. The product is waterproof and wrinkle-free, and no trees, water or chemicals are used in the process.
A Good Company has even created natural grass pens made from meadow grass and recycled BPA-free plastic. The pen is extremely durable and refillable, so there’s no need to throw it away once it runs out of ink.
These are just a few of the sustainable products a Good Company offers to its conscious customers.
Not only are their products environmentally friendly, but their packaging is too. A Good Company uses stone paper in their packaging, which took over three months to develop, to help fight climate change.
The sustainable business has established A Good Foundation where they train academia, businesses, NGOs and governments on topics like climate change, circular economy, recycling, consumer culture and sustainable entrepreneurship. They also donate 4% of the price of every sale to organizations that are fighting the climate crisis and supporting sustainability.
Some of the current projects A Good Company is working on include ‘The Circular Children’s Book’ made from soy ink and stone paper, teaching children about the importance of circularity. The company is also helping plant trees in Zambia and even producing a pen made from illegal firearms where 25% of the sales go to help communities in El Salvador affected by gun crime.
A Good Company is a truly sustainable business that is making a positive impact on its customers whilst fighting climate change.
88% of the reviews A Good Company has acquired are 5 stars, which show how satisfied their customers are with the products they purchase and the customer service they receive. Many reviewers also mention how content they are with the durability and Eco-friendliness of the products, suggesting their admiration for the sustainable business.
Tony’s Chocolonely is a Dutch brand that produces 100% slave-free chocolate.
Today, the cocoa industry drives deforestation, unsustainable farming and promotes child labour and slavery. Some cocoa farmers work in hazardous conditions, get insufficient income and are forced to live in poverty with no access to food, water or education.
Tony’s Chocolonely is on a mission to defeat this exploitation by ending modern slavery and helping the planet by prohibiting deforestation and the use of harmful pesticides.
The chocolate brand chooses to work in Ghana and the Ivory Coast as that’s where most of the inequality and human rights violations occur. So, that’s where it wants to make the most positive change by producing chocolate that is 100% slave-free. In their Impact Page, the company has added statistics to show the severity of this problem:
“In Ghana and the Ivory Coast, 1.56 million children work under illegal conditions and 30,000 people are victims of modern slavery.” – Tony’s Impact
The Dutch company highlights their progress by including how many metric tons of cocoa they bought from their partner cooperatives in West Africa and the number of farmers they work directly with. The page also shows the number of farmers paid in premium, allowing a better income and enabling them to invest in resources that help their productivity.
Tony’s Chocolonely is a fully transparent business, giving its consumers all the information to show their positive impact on the planet and its people. The chocolate brand even has a page explaining the location of all its ingredients. For instance, their caramel, toffee and pretzel come from France, the sea salt from Bonaire, oranges from Morocco, raspberries from Serbia, spiced biscuit, blue anise seeds and cinnamon sugar from the Netherlands and so on.
They also mention that the chocolate is produced by farmers in Ghana and the Ivory Coast, and the milk comes from a group of German farmers in the Faire Milch organization.
Tony’s Chocolonely is a great example of a company that is making a difference by producing slave-free chocolate whilst saving the environment and its people. Indeed, their reputation is so apparent that Dutch consumers have voted Tony’s Chocolonely the most sustainable business in the Netherlands based on the Sustainable Brand Index ranking.
The Power of Sustainability
There are many benefits to becoming a sustainable business. It will improve your reputation and help you reach a wider target audience. It’ll also help attract and retain your precious employees and customers whilst getting a better chance for funding and investments.
But remember, if you decide to incorporate some sustainable practices, be sure to let everyone know about it. Consumers are finding it hard to spot businesses that are environmentally and socially friendly. So, promote this aspect of your business on your website, social media and other channels. Your customers will surely appreciate it, and conscious buyers will be on the lookout for your company.
Did you know that shoppers trust customer feedback as much as personal recommendations? Social proof in the form of reviews is another strategy that can get your message across to those you wish to serve.
Consumers love to read reviews, so use it to your advantage.
Psydro can help you achieve all of this. If interested, do have a look at our completely FREE Launch plan to get a taste of the power of customer reviews to attract your wider audience and generate more sales.