How can we make sustainability profitable?
What’s your definition of success? Is it growth? Customer satisfaction? Employee engagement? For many business leaders, the most significant measure of success is profitability. But there’s a new objective high on the agenda for businesses, and that’s sustainability.
As more of us become increasingly aware of the impact we have on our planet, adopting more sustainable habits in the workplace is becoming just as important as our profit line. The problem is profitability and sustainability haven’t always gone hand in hand. Many businesses believe that implementing more sustainable practices will incur costs and actually detract from their success. From sourcing more expensive eco-friendly materials and products, to accounting for the additional time and effort required in planning and introducing more sustainable operations, there’s a widespread preconception that going greener means spending more.
Is sustainability worth it?
So, is it worth the hassle? Worth the resources? In short, yes. Far from a tick box exercise, you’re likely missing a trick if you simply feel obliged to think about sustainability. Yes, we all have a responsibility to do our bit in line with government targets and/or because we feel personally compelled. But what if we told you that all businesses, whatever their market, can take steps towards becoming more sustainable and becoming more profitable in the process?
In this blog we’ll expel the myth that profitability and sustainability don’t mix and prove that they can in fact go hand in hand.
Companies viewing sustainability as an investment rather than just a cost will reap the benefits further down the line. Ensuring a more sustainable business creates opportunities for the future. From longer-term cost savings to new business prospects, the advantages of creating sustainable processes will far outweigh the upfront outlay. And importantly, remember that the modifications don’t need to be vast.
Harvard Business Review published an article highlighting several companies leading the way in sustainability, with pioneering plans for reducing their carbon footprint. They provided examples of businesses from across the globe who have successfully made changes, including Zhangzidao Fishery Group in China, Jain Irrigation Systems in India, Manila Water Company in the Philippines, and Florida Ice & Farm in Costa Rica.
Each of these organisations had something in common. They didn’t overhaul their entire strategies in place of an all encompassing sustainability plan. Instead, they focussed on small marginal gains – adjustments to specific elements of their operations that over time would equate to much larger returns. The key to combining sustainability with profitability then is to set smaller, achievable short-term targets to realise larger long-term value.
For instance, you might have a target to achieve zero waste, but that may not be immediately achievable, especially in line with the needs of your business. Instead, you could set your company the goal of ‘reducing waste by X%’ over the next 12 months. You could enhance existing recycling efforts with additional procedures for reselling or reusing waste. These steps may not be ground-breaking, but they’re an example of how to make an incremental difference over time. Plus, by breaking the steps down, the target no longer feels quite as daunting, and small wins will give you the momentum to carry on.
The groundwork for achieving sustainability
It all starts with doing your homework to identify what sustainability means for your organisation. A sustainable method that works for one company’s processes won’t necessarily transfer to another or across different industries.
If you’re in aviation, sustainability may relate to lowering fuel consumption. The upfront costs in identifying how to do that, and eventually accomplishing it, will undoubtedly cost money.
In manufacturing it could mean reducing waste, increasing recycling efforts or sourcing more sustainable materials. While greener supplies are normally more expensive, stats show that Generation Z consumers are willing to pay more for sustainable products, so while initial expenses may rise, there’s a high probability that more sustainable goods will lead to greater profit.
Perhaps you want to invest in renewable energy? There’ll be an upfront cost for installing solar panels or a wind turbine, but after a number of years, you’ll start to see the payback. Could you implement new technologies to improve your environmental impact? Again, this is a higher initial expense, but it will potentially save costs over a longer period of time.
"As there’s no one-size-fits-all solution for sustainability, it will take some forethought and planning. It’s about reviewing your own current operations and identifying where you can adjust."
The knock on effects of sustainability
The financial benefits of becoming more sustainable don’t end there. In a survey carried out by TotalJobs, 80% of people agreed that companies have a duty to help the environment, 50% said they’d consider not working for a company with harmful practices and 26% claimed they’d take an average £8,100 pay cut to move to a sustainable employer.
And it’s not only candidates and employees with these preferences. With lots of organisations now promoting their inclination for working only with sustainable suppliers, your client base and partner network could increase as a result too.
Doing your bit to save the planet is becoming a core USP. And publicising it is a great way to boost your profits by gaining additional staff, clients, and professional partnerships.
The focus on sustainability isn’t going away – it’s the right thing to do for all our futures. While there’s no quick fix, it’s exciting that we’re also provided with endless opportunities for improving efficiency, attracting new talent, and boosting our reputations through sustainability – and that all this will contribute to profitability.
The key is to start small and focus on longer term solutions. They may not benefit us or the environment today, but the ultimate goal is to future-proof. If you can reap the rewards in 5, 10, 50 or even 100 years’ time you’re succeeding in making sustainability profitable.
At Carbon60 we’re working to lower our own environmental impact. Our sustainability goals align closely with those of many of our clients, so we’re excited to be working collectively to make the engineering industry greener moving forward. If you’re keen to learn more about how your company could not just improve its sustainability, but actually profit from it, get in touch with us today.