A sustainable business is one that earns while enhancing societal and environmental conditions. The concept of sustainability has been around for more than three decades now.
However, it has become popular in the last five years, and the trend doesn’t seem to stop anytime soon. The sustainability industry will become a $12 trillion-a-year market by 2030.
Here are a few reasons why your business should become more sustainable.
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1. Increases sales
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People prioritize environmental and human-focused causes over price. 75% of people are likely to start shopping at a company that supports a sustainability issue they agree with.
Products that had a sustainability claim on pack accounted for 16.6% of the market in 2018, up from 14.3% in 2013. They delivered around $114 billion in sales, 29% up from 2013.
2. Keeps you ahead of your competition
According to Maryville University, more than 600 publicly traded companies in the U.S. have made institutional, formal commitments related to sustainability.
With good sustainable practices in place, you can generate more sales for your business, improve profit margins, and have higher client and staff retention than your competitors.
3. Saves costs
Sustainability practices usually mean an overall reduction in operating costs. How? In sustainability, you will always look for different ways to cut costs while benefiting the environment, such as recycling.
A brewery shop is an excellent example of it. They use grain to make beers, and in the process, lots of grains are wasted. But, instead of throwing it, they donate it to farmers to use it to feed livestock.
This saves them the fees of waste disposal while improving the company’s local image.
Another way to reduce costs while promoting sustainability in your business is by replacing basic lighting with more energy-efficient lighting. This will significantly reduce the lighting bill. Similarly, you can fix dripping faucets to save water while reducing your water bill.
4. Tax incentives
The government understands the need for sustainability in business. To encourage companies to become more sustainable, many governments offer various tax advantages to firms that go green. A few financial incentives granted by the U.S government on both the state and federal levels include:
- Tax credits for the use of alternative vehicles that meet specific fuel-efficient standards.
- 30% tax credits for solar, fuel cells, small wind.
- 10% tax credit for geothermal, microturbines, and CHP (combined heat and power).
It’s not only about tax incentives, but there are also lots of grants, subsidies, and financing programs available for companies who seek to be eco-friendlier.
5. Enhances brand image
Today’s consumers are more aware of environmental concerns. Most people feel a company should be more aligned with sustainability.
Customers say a company’s commitment to environmentally-friendly business practice (71%), social responsibility (68%), and giving back to the local community (68%) are among the most important attributes of a business.
6. Helps you attract investors
People, especially investors, like to be associated with businesses that care about the environment and other sustainability issues. They do not want to be linked with companies implicated in social welfare scandals or ecological disasters.
Besides, companies that follow good sustainability practices usually have lower financial, insurance, and liability risks, which every investor is looking for when investing in a business.
According to a 2007 study, companies that are considered as leaders in environmental and social policies outperformed the overall stock market by nearly 25%, with 72% of them getting ahead of their competitors.
7. Helps you comply with government regulations
With global warming and shrinking water resources on the rise, many government agencies are imposing regulations to save the environment.
The reason being, many companies don’t dispose of hazardous chemicals appropriately. Some businesses are negligent towards their electricity or water usage. As a result, they invite hefty penalties from their government.
Companies like Colgate ran a public awareness campaign for water conservation during the Super Bowl. A consumer product company, Unilever started selling PG Tips Tea in 100% biodegradable tea bags.
Becoming more sustainable not only helps the environment or society, but it also supports businesses financially. You get to reduce operation costs, increase sales, and attract investors. Besides, it sends out a positive image of your brand to the public. Even many governments offer tax incentives and financial programs to companies that follow sustainability practices.