The Case for Environmentally Conscious Business
7 September 2018 at 5:18 pm
Environmental sustainability must be a core part of your business’ purpose, writes Georgia Gibson from social impact agency Ellis Jones.
For many of us, it’s our moral obligation to leave the world in a better state than we found it in; to leave no trace. And of late, these personal drivers have been translating into how we do business around the world. For an increasing number of organisations, there is now a strong commercial and financial argument for being an environmentally conscious and purpose-driven business.
Studies by peak US corporate social responsibility body, Project ROI, along with the Harvard Business Review, Deloitte and more have found that socially responsible businesses can expect positive returns in almost every area – market value, systematic risk, sales, reputation and HR. But socially-minded businesses don’t just deliver value to their customers, employees and bottom line; there is a very strong environmental component involved in delivering shared value.
Research shows us that when businesses have a positive vision with environmentalism as a key pillar, impact is substantial.
Return on Investment
Businesses making financial investments to improve their environmental footprint are seeing huge returns. One study estimated that returns on low carbon investments could be anywhere from 24 per cent to 80 per cent. In 2013, General Electric reduced their greenhouse gas emissions by 32 per cent compared to 2004 baselines, and water usage by 45 per cent compared to 2006, resulting in $300 million in savings. Walmart wanted to double the efficiency of their delivery truck fleet between 2005 and 2015, they did this through better routing, driver training and technology implementation. By the end of 2014, their fuel efficiency had improved by approximately 87 per cent, resulting in saving 15,000 metric tonnes of CO2 from being emitted, and making savings of nearly $11 million. That is shared value in action!
Moving with the market
In 2017, Deloitte and Chartered Accountants Australia found that 64 per cent of consumers in the Asia-Pacific region were willing to spend more on socially conscious brands. As a result, businesses with a reputation as a leader in environmental sustainability can expect up to a 20 per cent increase in sales and up to 6 per cent in market value. Additionally, purpose-led businesses are 83 per cent more likely to stay ahead of industry restructure and reform, and 80 per cent more likely to maintain or emerge as industry leaders in the sectors that they represent.
Businesses with a clear social purpose, that includes environmental sustainability, can expect an increase of 55 per cent in staff morale and 16 per cent in team productivity. A key component of this cultural shift is the environmental impact that the employing organisation is having, as employees increasingly want to work for companies who tread lightly on the planet. Businesses that cater to this see an overall reduction in absenteeism, a 38 per cent increase in staff loyalty and up to a 50 per cent decrease in staff turnover compared to companies with no environmental standard or purpose embedded into their work.
Two thirds of consumers are actively avoiding brands that they deem to be environmentally damaging. They are increasingly seeing straight through green-washing and are seeking greater transparency from the brands they choose to do business with. As a result, socially and environmentally conscious businesses are 91 per cent more likely to maintain customer and stakeholder loyalty. To make the case stronger, we now know that these conscious consumers are on the rise, shifting the markets they engage with toward a greener future.
About the author: Georgia Gibson works as an associate consultant as part of communications, design and social impact agency Ellis Jones. At the agency, she is contributing to the agency’s work in environment, energy, government and education; she is deeply passionate about working with sustainable and purposeful businesses. LinkedIn.