Pressure from customers, investors and employees to be more sustainable is increasing. Using this pressure as a lever to make positive change will make your business more resilient.
We’re seeing large businesses asking their supply chains to demonstrate sustainability. Investors are increasingly putting their money in ESG (Environmental, Social, Governance) focused funds. Young and now even middle aged talent aspires to work for purpose driven companies who are clear on their impacts and proactively addressing them. Increasing regulatory pressure, subsidies and grants are linked to business sustainability.
Fundamental trends that every business needs to address sooner rather than later. Doing nothing is always an option. The risks that choice brings include:
- Losing customers who want to claim they are sustainable / have a sustainable supply chain
- Developing a cost disadvantage as competitors reduce their cost base through higher productivity, lower waste levels and reduced energy costs
- Losing key talent to competitors
- Failing to attract new talent
- Poor lending conditions
- Exclusion from many lenders and equity investors
- Missing out on grants and subsidies to develop your business
If you flipped those risks into strengths, you would have a strong definition for a resilient business. Strong customer retention and relationships, highly engaged staff, good financing options etc.
So what are customers and investors asking for? They want suppliers to show evidence of having developed robust sustainability and ESG strategies. You can try to game the system – identify the likely winners in the emerging ESG index measurement systems, make the right noises in your annual report. Or you can hedge your bets and start measuring what impacts your business makes, make strategies to make them positive, and record your activities and outcomes on the journey to making them happen. Giving you rich evidence for anyone who asks or cares to look.
Consider COVID. Revisiting a webinar we did at the start of the first lockdown on being resilient through the crisis, the key elements were retaining customers, retaining staff, securing finance, upgrading technology and engaging supply chains. Sustainable business is resilient business, or just good business.