The Business Benefits of Sustainability
Deciding to invest in a Corporate Social Responsibility (CSR) management system is wise. Not only for the obvious reasoning that we should all care about the impact we are creating, but also because of the business benefits of sustainability.
As you will see throughout this article, these benefits touch nearly every essential aspect of your business and are common to all types of CSR. So whether you decide to go for an environmental, community based, HR based or philanthropy based CSR strategy you will have a taste of these advantages.
Creating a strong business and building a better world are not conflicting goals – they are both essential ingredients for long-term success – William Clay Ford Jr. Executive Chairman, Ford Motor Company
1. Better risk management and ability to address change:
CSR will help you better anticipate and manage the wide range of risks that your company is confronted with. Risks are generally very dependent on your type of activity and sector; in this case it goes beyond. Having a good understanding of your impacts as a company will highlight all the risks you are taking, making it easier for you to address them. Having well identified your risks will enhance your ability to address change.
“In the next decade, the most successful companies will be those that integrate sustainability into their core businesses “– Jim Owens, CEO Caterpillar
2. Improved reputation management
You are working with a purpose and a well established set of values. You are who you are and you work for it constantly and coherently every day. This makes you trustworthy. When your people (customers, suppliers, investors, community, etc.) feel they can trust you, they will stay with you. Long-term relations are the best way to measure your reputation.
“To build and sustain brands people love and trust, one must focus—not only on today but also on tomorrow. It’s not easy…but balancing the short and long term is key to delivering sustainable, profitable growth—growth that is good for our shareholders but also good for our consumers, our employees, our business partners, the communities where we live and work, and the planet we inhabit “–Irene B. Rosenfeld, CEO Kraft
3. Satisfied employees
One of the main business benefits of sustainability is higher engagement levels from your employees. Better understanding of what they want, what they expect and why they will stay. Your staff is your greatest asset, keeping them motivated and trained will make the best version of your company come to life.
“The only thing worse than training employees and losing them is to not train them and keep them.” Zig Ziglar
4. Access to innovation, competitiveness and market positioning
By having open dialogue with your stakeholders you will have a better understanding of their needs and expectations. Knowing what they know and expect will give you the advantage of access to information. With this knowledge you can better adapt and improve in order to earn higher competitiveness and market positioning. In order to innovate you have to have a great team and a lot of valuable information.
5. Operational efficiency and cost savings
Revising your production channels to assure you are operating in the least impactful way according to law and best practices will not only have a positive impact in your cost savings but also with your future activity. Operating sustainability will guarantee you stay in business.
6. Efficient supply chains
CSR will help you improve your ability to both attract and develop effective and efficient relationships with your suppliers. Without them your business would probably not work and the way they deliver has an impact in the way you will deliver. Open communication and take action to evaluate their performance.
7. Social license
Addressing the community where you operate and getting to know up to what extent you affect or influence in them will give you a more robust social license. Social license generally refers to a local community’s acceptance or approval of a company’s project or ongoing presence in an area. It is increasingly recognized by various stakeholders and communities as a prerequisite to development.
“We know that the profitable growth of our company depends on the economic, environmental, and social sustainability of our communities across the world. And we know it is in our best interests to contribute to the sustainability of those communities” – Travis Engen, CEO, Alcan
8. Access to capital and investors
Investors are more and more interested in companies that work for a clear purpose that will help the world to be a better place, companies that are responsible with society and the environment. Check out FTSE4good index series to have a view of what is available for companies.
9. Your contribution to a better world
By implementing CSR you are assuming your part of responsibility and taking action, you are contributing to international issues and taking a side on them.
“The business of business should not be about money. It should be about responsibility. It should be about public good, not private greed” – Anita Roddick, Founder, Body Shop
There are several international organizations that have come together to help companies incorporate CSR. If you want to be part of these initiatives check them out: UN Global Compact, Global Reporting Initiative, ISO 26000.