Sustainability needs to be everyone’s objective if we want our planet to be around—and inhabitable—for future generations. Yet, small business sustainability efforts aren’t just the right thing to do for our environment and society. Small businesses can reap concrete benefits from prioritizing sustainability. We’ll cover some of the big ones.
We recently answered the question: What is sustainability? But awareness is just the first step, right? Effective change requires buy-in. This article will outline the advantages of small business sustainability strategies.
First, some stats since they’re always so persuasive:
- In 2019, 72% of 6,000 consumers in an Accenture survey “said they’re currently buying more environmentally friendly products than they were five years ago, and 81% said they expect to buy more over the next five years.”
- In a PWC report, 74% of consumers “said companies care much more about the environment than they did ten years ago.” Yet, 73% “feel let down by what they view as slow progress on diversity and inclusion.”
- Another 76% of consumers in the PWC survey agreed they would discontinue their relationship with companies that “treat the environment, employees, or the community in which they operate poorly.”
Of course, the prospect of contributing to a healthier planet and people is appealing. If that’s not enough for you, our discussion turns to other advantages, including:
- Better bottom line
- Improved relationships
- Heightened brand awareness
- Enhanced employee engagement
- Greater ability to attract top talent
Better Bottom Line
Small business sustainability is more than a cynical PR move. It does help the business bottom line. According to McKinsey, tackling Environmental, Social, and Governance (ESG) concerns facilitates top-line growth, reduces costs, minimizes regulatory and legal interventions, increases employee productivity, and optimizes investment and capital expenditures. Obviously, all of that is good for the business cash flow!
Companies that incorporate green office strategies improve company image, increase profits, and report savings. If your small business lowers its energy and water consumption, you’ll lower utility bills. Environmental priorities can also open you up to governmental subsidies. Plus, with a focus on purchasing long-lasting assets and the preventative maintenance that will keep them healthy longer, you’ll be able to reduce capital expenditures in the long run.
If your small business is looking to attract investors or plans to go public, you’ll also see advantages in sustainability initiatives. Companies with higher social capital levels achieve demonstrably higher market valuations, according to McKinsey.
Customers really do care about sustainability. According to Accenture, 50% of consumers are willing to pay more for sustainable products. Another 83% value companies that are creating products designed for reuse or recycling.
PWC similarly found “83% of consumers think companies should be actively shaping ESG best practices.” Some 48% also wanted to see companies showing more progress on social issues. While business leaders said progress would be supported by having social responsibility reported directly to the boss, employees wanted to see ESG initiatives directly embedded in the business culture. Consumers figured financial incentives would be a good motivator.
One more way to look at it? You may also develop better supplier partnerships. Eco-conscious suppliers will appreciate working with businesses that share their altruistic bent.
Heightened Brand Awareness
Associating your business with going green and efforts to help society reach its diversity, inclusivity, and equity adds business credibility. The desire to seeing businesses going green and being socially responsible is broadly held. A Nielsen survey found, “this passion for corporate responsibility is shared across gender lines and generations. Millennials, Gen Z and Gen X are the most supportive, but their older counterparts aren’t far behind.”
Brands such as Ben & Jerry’s, Dove, or Tom’s come quickly to mind as businesses with different sustainability foci (reducing carbon footprint, addressing gender inequity, or financial disparities, respectively). But the small business can see social responsibility having an impact too.
Promote your sustainability efforts on your website and social media can help you build brand awareness. In a future article in this series, we’ll talk more in-depth about sharing your brand’s sustainability story as you integrate environmental, social, and economic considerations into business activity.
Enhanced Employee Engagement
Employees want to feel pride in where they work, what they do. It is a lot easier to do that when working for an eco-friendly small business or entrepreneur. If your people appreciate working for a socially progressive company, they’ll find a greater sense of purpose at work. And you know by now, more motivated employees are typically more productive employees.
The PWC study already mentioned also found “86% of employees prefer to support or work for companies that care about the same issues they do.” But how do you encourage employee ownership of the sustainability mission? This leadership article shares eight strategies drawn from Unilever’s example.
Greater Ability To Attract Top Talent
A large generation of employees is aging out of the workforce. The new talent pool on deck to replace them values sustainability in a much deeper way. These are young people who have been doing service-learning since elementary school. They recognize that sustainability efforts will have a direct impact on their lives as they mature.
Appeal to the more cause-oriented future employee by letting them see that you are a small business with purpose. You’re more likely to appeal to top talent when they can see that profit isn’t your only motivator.
Supporting Small Business Sustainability
There are many ways to approach sustainability. We’ll cover those in more detail in the next article in this series. In the meantime, make your business sustainability efforts known to customers on your business website.