What are the Five Most Important Trends in Sustainability for Executives?
A business' commitment to sustainability often falls into the hands of company executives. This responsibility requires these executives to understand the top trends in sustainability. Below, we have listed the five most important trends and why they are important to understand for your company.
1. Financial returns
Firstly, it is important to understand the financial returns brought about by a commitment to sustainability. There has been evidence to show that when done correctly, a commitment to sustainability can bring about positive financial returns for your business. The Bank of Finland found in a 2009 study that listings on indexes such as FTSE4Good and Dow Jones Sustainability has been associated with a contribution to a stock price increasing of an average of 2%. Conversely, a loss of status has been associated with a contribution to a stock price decreasing of 3%. Of course, the key to this is ensuring that your commitment to sustainability aligns with the values of your clients and consumers and that your organisation is effectively marketing your commitment to sustainability.
2. Power of technology
Technology is completely changing how we do business. It is also changing sustainability. Businesses are able to track more data when it comes to economic, social and environmental sustainability in their business, especially within the supply chain. It is also allowing businesses all around the world to have deeper and more meaningful connections to create a global movement of change within business. Technology is also providing a platform for innovative thinking when it comes to sustainability. We have discussed previously how important innovation is for sustainability by including a list of a few industries where innovation is required to change the game through a business as unusual approach.
3. Action over rhetoric
With the increased access to technology, many people want to see how what they are giving back to the world is helping those who need it most. For many consumers, a purchase from a business practicing a commitment to sustainability is their way of giving back - and they want to see the evidence! While it is all well and good for organisations to talk about the fantastic work they are doing towards creative an economically, socially and environmentally sustainable future, consumers want to see the proof of this; they are moved by action more than rhetoric.
4. Millennials are key
Millennials are the next generation of both consumers and employees, including executives. Studies have shown that millennials take corporate commitments to economic, social and environmental sustainability seriously. Many millennials will happily take a pay cut to work at an organisation whose values align more closely with theirs, and many millennials are more likely to spend money with a company that has outlined a commitment to sustainability.
Finally, transparency is vital for organisations in their commitment to sustainability. Goal 16 of the United Nations' Global Goals for Sustainable Development is about Peace, Justice and Strong Institutions and outlines the need for transparency within an organisation. Consumers want to know that corporates which are committed to sustainability are committed across all aspects - economic, social and environmental - and are not doing anything untoward which may counteract the good work they are doing towards sustainability.
If you are a business executive and want to understand any of these trends in further detail and how they might apply to your business, contact us today!
This article was originally published on the Strategic Sustainability Consultants website.