Rise of - and value of - the sustainable business agenda
Covid has created more than its fair share of challenges and changes for businesses, and perhaps one of the most pronounced shifts to emerge is the rise of the sustainability agenda.
But what has set the scene for these changes and what does the new sustainability agenda really mean for Northern Ireland businesses?
Sustainability in business refers to the effect companies have on the environment or society, and this is becoming a major driver for businesses right across the globe.
How we carry out business has changed rapidly in recent months, and what really initiated these changes was an open letter in May of last year from 155 large multinationals including Coca-Cola, Diageo, Sky and Unilever, who appealed to governments for a ‘green recovery'.
In this letter governments were asked to align economic recovery strategies with net-zero carbon targets ahead of 2050.
Sustainability is making its way on to the business agenda and, as we learned from the high-profile COP26 conference in Glasgow last November, is fast becoming a key driver for growth and innovation.
However, despite plenty of research to back up the demand and benefits associated with sustainable business practices, of the 90 per cent of executives who agree that sustainability is important, only 60 per cent of companies have a sustainability strategy in place.
In terms of financial incentives for business, the evidence is overwhelming. In 2020, IBM discovered that almost six in 10 consumers were willing to change shopping habits to reduce environmental impact and almost eight in 10 indicated that sustainability is important for them.
Nielsen revealed that sustainable product sales have grown by nearly 20 per cent since 2014, and The Harvard Business Review confirmed that sustainable businesses saw greater financial returns than their unsustainable competitors, with Unilever's “sustainable living” brands now delivering 70 per cent of its turnover growth.
There seems to be a perception that getting onboard with sustainability comes at a cost, but research continues to prove that you can do well in business, whilst also doing good for the environment.
It's not just consumers who are seeking to align personal values with purchasing habits. Evidence has also proven that employees are pursuing opportunities with sustainability focused employers.
Nearly 70 per cent of employees claim that their company's sustainability programme impacts their decision to stay in the long term, with effective sustainability agendas proving to reduce employee turnover by up to 50 per cent.
If the potential revenue gains, and cost savings associated with sustainability aren't enough to convince you, investors and financing institutions are also increasingly seeking out businesses who align with more sustainable work practices; associated environmental taxes and tax reliefs are expected to be introduced in the not-so-distant future, and large-scale procurement opportunities are also seeking out suppliers who demonstrate sustainability focused policies and practices.
Corporate leaders are becoming more aware of the value of the sustainability agenda, and this, along with the rising renewable energy market is expected to be a major area of economic growth, with a potential global market value that is expected to reach approximately £1.57 trillion by 2025.
When it comes to sustainability, a do-nothing approach is likely to mean bigger losses than gains in the future, so, if we want to continue to drive forward with business and innovation, secure investment, lead talent and enhance procurement opportunities it looks like the sustainability agenda is going to be on the radar for the foreseeable future.
:: Danielle McCormick (Danielle@Triterra.co.uk) is founder of Triterra (www.triterra.co.uk), which helps organisations on their sustainability journey