Why Sustainable Business?

No matter what your business, sustainability is your business.

Sustainability Pays. No longer is sustainable business behavior something to be relegated to an annual gesture of philanthropy, or a token recycling program. Instead, sustainability is merging into mainstream business best practices, and is reflected in a number of benefits, including improved profitability. To be sustainable, organizations must embrace a new objective: optimize operations to minimize environmental impact and improve social outcomes in a manner that also maximizes performance.

A recently released research report from MIT Sloan School of Business that states companies with sustainability strategies have measurably stronger financials than their peers who are moving forward with trepidation or do not have a sustainability strategy.

Academic studies have demonstrated a clear relationship between Corporate Social Responsibility and Sustainability and improved economic performance.

While there are different ways to frame the benefits of Corporate Social Responsibility and Sustainability because they are interrelated, they generally include the following:

• Stronger financial performance and profitability through operational efficiency gains
• Improved relations with the investment community and better access to capital
• Enhanced employee relations that yield better results respecting recruitment, motivation, retention, learning and innovation, and productivity
• Stronger relationships with communities and enhanced license to operate
• improved reputation and branding

Stronger Financial Performance and Profitability

Businesses can use CSR and corporate sustainability to produce direct benefits for the bottom line. For example, operational efficiencies can be achieved through reducing energy and materials as input factors for production. Wastes can also be reduced and materials can be recycled. These sorts of actions from eco-efficiency can produce concurrent environmental and economic benefits for the company and thereby contribute to stronger financial performance and more positive profitability. Operational efficiencies can be achieved in other facets of CSR such as streamlining the way that information is provided to the investment community as well as to other stakeholders that demand increased transparency. Managing potential risks and liabilities more effectively through CSR tools and perspectives can also reduce costs. Using corporate responsibility and sustainability approaches within business decision-making can result not only in reduced costs but can also lead to recognizing new market opportunities such as when new manufacturing processes are developed that can be expanded to other plants, regions or markets. There are various studies that have examined the relationship between CSR and corporate financial performance and most of the evidence suggests that the links are positive.

Improved Relations With the Investment Community and Better Access to Capital

The investment community has been exploring the links between corporate social responsibility and financial performance of businesses. There is growing evidence (through indices such as the Dow Jones Group Sustainability Index (DJGSI), the FTSE4 Good indices, and the Jantzi Social Index) that companies that embrace the essential qualities of CSR generally outperform their counterparts that do not use features of CSR. This information is being translated into action within the investment community (e.g. with creation of funds such as Socially Responsible Investment, Domini Social Equity Fund, EcoValue 21). An increasing number of mutual funds are now integrating CSR criteria into their selection processes to screen in sounder companies and/or screen out businesses that do not meet certain environmental or social standards. Thus, a CSR approach by a company can improve the stature of the company in the perspective of the investment community, a company’s stock market valuation, and its capacity to access capital from that community.

Enhanced Employee Relations, Productivity and Innovation

A key potential benefit from CSR initiatives involves establishing the conditions that can contribute to increasing the commitment and motivation of employees to become more innovative and productive. Companies that employ CSR related perspectives and tools tend to be businesses that provide the pre-conditions for increased loyalty and commitment from employees. These conditions can serve to help to recruit employees, retain employees, motivate employees to develop skills, and encourage employees to pursue learning to find innovative ways to not only reduce costs but to also spot and take advantage of new opportunities for maximizing benefits, reduce absenteeism, and may also translate into marginally less demands for higher wages.

Stronger Relations Within Communities Through Stakeholder Engagement

A key feature of CSR involves the way that a company engages, involves, and collaborates with its stakeholders including shareholders, employees, debtholders, suppliers, customers, communities, non-governmental organizations, and governments. To the extent that stakeholder engagement and collaboration involve maintaining an open dialogue, being prepared to form effective partnerships, and demonstrating transparency (through measuring, accounting, and reporting practices), the relationship between the business and the community in which it operates is likely to be more credible and trustworthy. This is a potentially important benefit for companies because it increases their "license to operate", enhances their prospects to be supported over the longer term by the community, and improves their capacity to be more sustainable. Companies can use stakeholder engagement to internalize society’s needs, hopes, circumstances into their corporate views and decision-making. While there are many questions about how far a company’s responsibilities extend into communities relative to the roles of governments and individual citizens, there is a strong argument that CSR can effectively improve a company’s relations with communities and thereby produce some key features that will improve business prospects for its future

Improved Reputation and Branding

A potential benefit of CSR is that it can improve a company’s reputation and branding and this in turn improves the prospects for the company to be more effective in the way that it manages communications and marketing in efforts to attract new customers and increase market share. CSR as a concept with various tools can help a company to position itself in the marketplace as a company that is more responsible and more sustainable than its competitors

Turns out sustainability strategies = financial strength!

“After you have exhausted what there is in business, politics, conviviality, and so on – have found that none of these finally satisfy, or permanently wear – what remains? Nature remains.” – Walt Whitman

CALL TODAY for a Quote that will start your business towards energy cost savings and the welcome attention from potential customers and employees who appreciate your green energy commitment and improving America’s freedom by reducing our dependence on Foreign Oil!