Futureproofing Business - The Green Voice

Sustainability provides a competitive edge –  it’s a source of innovation and differentiation.  Companies that lead  in sustainability set industry standards, capture new market  opportunities and strengthen their brand reputation.

It also has a direct impact on the bottom line.

According to McKinsey & Company, being sustainable reduces costs and can affect operating profits by up to 60 percent.  Employee productivity also increases. A University of California, Los Angeles study found  that companies that voluntarily adopt international “green” practices  and standards have employees who are 16 percent more productive than  average.

Matt Mayberry, founder of  Wholeworks, wants us to move beyond the notion of false tradeoffs and be  able to connect the dots that lead to sustainable value creation in  business.

In a recent whitepaper,  Mayberry writes that, “there are many ways to both do well and do good  in business, but they are often dismissed due to the inability to  effectively add these two objectives together.  As a result, managers  may fail to recognize the potential of sustainability to stimulate  innovation, increase revenues, decrease costs, reduce risks, attract  capital and strengthen the business in other ways.”

The  truth is sustainability is no longer a "luxury" or a niche concern.   Rather, sustainability is a critical business imperative for all  organizations, regardless of industry.

Let’s dive deeper into how and why this is reality.

Governments  and international regulatory organizations like the IFRS Foundation,  International Accounting Standards Board and the International  Sustainability Standards Board are introducing stricter environmental  laws and regulations to combat climate change, reduce carbon emissions,  and promote sustainability. Businesses that fail to comply face  penalties, reputational damage, and the risk of being left behind as  markets shift toward greener practices.

According to a recent EY Insights Report on 2025 ESG trends,  “the financial sector – funds, banks, financial institutions and  insurance companies are bracing as regulatory shifts reshape sustainable  banking practices worldwide.”

Today's  consumers are more conscious of their environmental and social impact.  Studies consistently show that people prefer to buy from companies that  demonstrate sustainable practices. Businesses that fail to adapt risk  alienating the growing segment of eco-conscious consumers.

Sustainability is a core expectation, regardless of industry.

It  also is a top priority for investors. Environmental, Social and  Governance (ESG) criteria are increasingly used to assess the long-term  viability and profitability of a company. Those with strong  sustainability practices often attract more investment and enjoy better  access to capital.

Despite anticipated anti-ESG regulations around shareholder rights, climate disclosure and ESG fiduciary rights, Corporate Knights sustainable business and finance reporter Eugene Ellmen cites  a recent survey by the U.S. Sustainable Investment Forum.  It found  that 50 percent of long-term ESG-oriented investors plan to maintain  their current level of ESG activity in 2025, while 29 percent said they  plan to increase it moderately and 10 percent plan a significant  expansion.  Ellmen goes on to write that “sustainable investing has  built a sufficient strength in the last decade to withstand the growing  conservative backlash.”

Sustainable  practices, such as energy efficiency, waste reduction, and resource  optimization, often lead to significant cost savings. For example,  companies that invest in renewable energy or circular economy models can  reduce operational costs while building resilience against resource  scarcity.

A recent Forbes op-ed by Forrester explains  that 2025 will see companies embracing circular economy opportunities  in reducing, reusing, repairing, refurbishing and recycling.   Implementing lifecycle assessments that help both employees and  consumers understand the environmental impact of their product choices  will also be on the rise.

Employees,  especially younger generations, want to work for organizations that  align with their values. A commitment to sustainability can help attract  top talent and foster a more engaged and motivated workforce.  And,  these employees want a voice in helping their company achieve its green  goals. A recent Deloitte report finds  that two-thirds of Gen Z and millennial employees believe in their  ability to drive organizational change and perceive that their feedback  is being acknowledged and incorporated by their organization.

All  business operates on a global stage – this is true for the kids running  a lemonade stand, the local mom-and-pop grocery store and the  multinational conglomerate, all of whom are subject to supply chain  issues. Climate change, resource scarcity, and global economic shifts  pose significant risks to all businesses. Sustainable practices help  organizations build resilience by mitigating risks associated with  employees’ wellbeing, supply chains, regulatory changes and reputational  harm.

Business leaders are very much aware of the risks.  Deloitte’s 2024 CxO Sustainability Report finds  70 percent of c-suite executives believe climate change will have a  high or very high impact on their business’s strategy and operations  over the next three years, up from 61percent in 2023.

What  does this all mean in the end?  Sustainability is intrinsically linked  to long-term business success. Companies that prioritize sustainability  are better equipped to adapt to changing market conditions, innovate and  ensure their operations remain viable in the future.

In  the months ahead, we’ll focus on best practices and realistic  strategies for organizations of all shapes and sizes.  In doing so, we  will be exposed to ideas that prepare us to face the inevitable  challenges (and opportunities) that will arise for our own businesses in  a rapidly changing world.  We will learn together ways to build a  better, more sustainable future – for our economy, our society and our  planet.

Here’s to futureproofing business.

Stephanie  Tonnesen Hornback is the founder of Hornback Partners LLC, a  woman-owned strategy and communications firm that helps businesses to  realize sustainability goals; develop and share impact stories; and,  foster deeper relationships with key stakeholders, internally and  externally. Follow her on social at @StephTHornback or visit  www.hornbackpartners.com.