The case for environmentally conscious business.
BLOG: Why environmental sustainability must be a core part of your business’ purpose.
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% to 80%. In 2013, General Electric reduced their greenhouse gas emissions by 32% compared to 2004 baselines, and water usage by 45% 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%, 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% 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% increase in sales and up to 6% in market value. Additionally, purpose-led businesses are 83% more likely to stay ahead of industry restructure and reform, and 80% 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% in staff morale and 16% 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% increase in staff loyalty and up to a 50% 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% 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.
So what are you doing to define and action your environmental purpose? For us, it means practising what we preach with the creation of our environmental manifesto, and working with clients who are working to mitigate some of the greatest threats facing our environment, from carbon emissions to waste. Being environmentally conscious is part of Ellis Jones’ identity.