In recent years, sustainability has quickly become one of the biggest and most significant trends in the global economy, affecting all industries. While many businesses want to become more sustainable, it can be a costly undertaking that requires careful planning and a detailed approach. However, the long-term profitability of adopting sustainable practices should not be overlooked or underestimated.
Implementing green business practices extends past simple recycling, energy-saving lighting solutions and eco-friendly packaging, but taking the necessary steps to invest in sustainability can result in immense advantages down the line.
Define Sustainability
Sustainability is a comprehensive term, so it is crucial to consider how you want to interpret it when adopting new practices in your business. You need to decide whether you are going to focus on day-to-day operations, the treatment of your employees, your product, or supply chains.
You may choose to focus on just one factor at a time or combine efforts that closely impact one another. However, by narrowing down your efforts, the most functional and cost-effective solution often becomes more apparent. This can often prevent you from making drastic and unnecessary decisions if a more straightforward fix is available.
Create Value, Not Just Revenue
Many businesses tend to prioritise revenue first and value second. However, the key to success is leading with your values and focusing on delivering consistent and reliable results that will build consumer trust and favour, ultimately increasing revenue.
In a study conducted by the Ashkin Group, nearly 80% of consumers reported that the sustainability of a product, brand or retailer influenced many of their purchasing habits. By vocalising your passions, values and promises as a brand, you can find a deeper connection with consumers who believe their values and beliefs align with your company. This same strategy applies to potential employees, suppliers and business partnerships.
Adopt the Circular Economy Model
Adopting a circular economy model is the perfect way to balance profitability with sustainability. This model forces companies to plan for and adapt to strategies that focus on longevity, minimised waste and consumption, and processes that incorporate reusing and recycling packaging materials and products.
By focusing on sustainable practices that utilise recycled products, optimising production methods and establishing take-back programs, companies can lower their overall costs and generate more revenue through new customers while remaining committed to their environmental responsibilities.
Invest Now to Save Later
When there is a high demand for something fast and immediate, companies tend to sacrifice quality for convenience. This is evident in fast food and fast fashion, where goods are used that are harmful to the environment but incredibly cheap to produce.
When looking for ways to save money or maximise budgets, it can be easy to default to cheaper options. However, while sustainable production methods may cost more initially, they typically result in better and less expensive long-term costs.
Various studies and polls reveal that nearly 70% of global consumers are willing to pay more for sustainable products. Higher-quality materials and extended longevity allow them to get more value for their money. Additionally, high-quality and reliable products build customer loyalty, leading to repeat purchases in the future.
Make Incremental Changes
One of the biggest mistakes a business can make when adopting new green strategies is trying to implement too many changes at once. Not only can this be highly disruptive to everyday operations, but attempting to learn, implement, and maintain too many big changes can quickly become overwhelming and unsustainable.
Instead, companies should focus on small, incremental changes that can lead to long-term cost savings, like introducing energy-efficient lighting or recycling programs to increase waste reduction. Partnering with sustainable suppliers can also enhance the credibility of a business while supporting cost management.
Additionally, organisations can leverage sustainability as a unique selling point for their business, attracting eco-conscious consumers who are willing to pay higher prices for products with lower environmental impacts.
Data Collection is Key
Data collection should be a vital component in any business strategy, project or plan. The value of up-to-date analytics should never be underestimated, as it helps you better understand the market, analyse vendor and supplier performances, allow for a more accurate demand forecast and improve the overall experience for your customers.
Every business should constantly measure three main building blocks of sustainability: social, economic, and environmental. The social factor relates to how employees are treated and affected and whether sources and suppliers are treated fairly and ethically. The economic building block focuses on the value within an organisation that ultimately translates to wealth and profits. Finally, the environmental aspect focuses on any and all environmental impacts.
Customers expect companies to know their environmental impact and have realistic plans to improve it. Furthermore, employees expect their employers to understand social equity and support a healthy work-life balance and the overall happiness of the workforce.
Keep Innovating
The modern world is constantly changing. In order to not be left behind, companies around the world need to be flexible with their processes and technology to remain competitive in their industry and favourable to their customers. It is vital to ensure that business operations can change and adapt as needed without a significant impact on the organisation as a whole.
By focusing on short—and long-term innovation, businesses become more resilient to unexpected changes and conditions that are outside their control. Some of the oldest and most popular brands in the world, including Visa and Coca-Cola, share one crucial common denominator: consistent and successful brand reinvention.
Whether they introduce new product lines, expand into brand-new markets, reinvent their image or partner with other longstanding brands, ensuring that innovation and reinvention are high on their priority list is a significant factor in their ongoing success.
