Sustainability is going to be the future of all businesses. People across the globe are becoming more concerned about the issue of climate change and the future of the planet. Millennials are known for having a keen interest in the topic; they are willing to pay 10 – 25 per cent more for a sustainable product (Toyota, 2021). Generation Z is also concerned about sustainable business; 81% believe businesses should be sustainable (Fout, 2021). Does this mean the future demand for goods and services will be most sustainable? And if so then supply should shift to be more sustainable to meet the demand.
1) The demand for sustainable goods and services is increasing
The success of a business is significantly dependent on the demand for its goods and services. This implies that a shift in the demand in the positive direction will require the businesses to produce more goods and services to meet the demand. The other case scenario is the business decides to maintain the supply of its goods and services; this will imply the business will lose revenue from the extra demand.
A recent study of the global market by the Economic Intelligence Unit suggested that the demand for sustainable goods and services has surged by 71% per cent (Economic Intelligence Unit, 2021). What this implies is that customers are shifting their tastes and responsibilities into more sustainable goods and services. Also, the businesses that these customers previously demanded goods and services are now losing customers. This trend is expected to continue and if businesses will not adapt to the change in tastes and preferences, then they are risking losing the customers and subsequently their business.
2) Sustainability could reduce the cost of your business.
Some companies have noticed a decrease in their costs after shifting into more sustainable solutions. An example of this case is IKEA. The company shifted to more sustainable packaging solutions by 50% on one of its products. The results were astonishing, the company saved 1.2 million euros annually (Chaudhuri, 2021).
In addition, strategically shifting into more sustainable business solutions could save your business millions while increasing efficiency. The cost reduction at IKEA was a result of the reduced weight which increased the efficiency in the transportation.
3) Save your business from extinction
Unsustainable businesses could become extinct in the future. For instance, some countries are considering having 100% zero-emission vehicles. As of 2020, Norway had 74.8 % adoption, followed by Iceland with 45% adoption and Sweden was at 32.2% (Ritcher, 2021). This trend is expected to increase in the coming years because of the continuous increase in policies to support zero-emission vehicles. Moreover, Uber announced its vehicles will be 100% electric in Canada, the US, and Europe by 2030 (Uber, 2020). This trend is expected to continue; not just for electric vehicles but also for sustainable products in general.
4) Attract and Retain Employees
In recent years, it has become more difficult to attract and retain competent employees. Especially after the pandemic, employees are quitting their jobs at a faster rate. BBC reported in an article named, “The Great Resignation” that 41% of workers are considering quitting their jobs or shifting to another profession globally (Morgan, 2021). This percentage is high and it means every company is at risk of losing competitive employees. This risk can be mitigated by providing employees with a meaningful pursuit; working for sustainable development to counter climate change. With this strategy, employees will likely be retained and also motivated to increase their performance.
5) The shift in Legislation to support sustainable businesses
There is a global call by governments and non-governmental organizations for businesses to shift into sustainable solutions. This call is obviously because of the primary concerns about climate change and the fate of our beautiful planet. Most countries are opting to take the path to sustainable development. This is the social and economic development that takes into consideration the environmental wellbeing of the country.
In addition, there have been multilateral agreements between countries to put more focus on sustainability. The Paris agreement, for example, has brought nations together with a common goal to protect the environment from the threat of sustainable change. The United Nations sustainable development goals (SDGs), are also another major reference. The 17 global goals serve as a guide for United Nations Member States in the pursuit of sustainable prosperity.
The shift in legislation should not be perceived as a threat but as an opportunity. Businesses that take advantage of this legislation will have an easy time running their businesses because they will have the full support of the government and the specific countries.
6) Business Brand and Image
The brand and image of a company play a critical role in its success. The business brand and image is a representation of what the company and what the consumers think about the company. A good perception of the company by the employees will most likely increase the demand for the product over the long run. In today’s business environment, sustainability plays a key role in determining the brand. Sustainable companies are perceived to care about the people and the problem of climate change. Research shows 73% of Americans would stop buying a product from a company that they discover does not care about climate change (Gitman, 2021). Companies should brand more attractive to be more sustainable in the future.
7) Making a Global Impact
Finally, the most critical reason why businesses should be more sustainable is to make a global impact. The climate change problem is a global problem that requires local solutions. This implies that every company has a responsibility to take part in protecting the environment and contribute to the fight against climate change. This war requires teamwork; every single effort to protect the environment contributes to the global sustainable development goals. Let us work together in love to a more sustainable world.
Chaudhuri, S. (2021). IKEA Can’t Stop Obsessing About Its Packaging. Retrieved 28 July 2021, from https://www.wsj.com/articles/ikea-cant-stop-obsessing-about-its-packaging-1434533401?mod=djemlogistics&utm_source=Chainalytics&utm_medium=Chainalytics&utm_campaign=Chainalytics
Economic Intelligence Unit,(2021). Retrieved 26 July 2021, from https://content.unops.org/publications/Thefutureofpublicspending_EN.pdf?mtime=20200623084321&focal=none
Fout, J. (2021). The Solution to Post-pandemic Burnout?. Retrieved 11 July 2021, from https://thriveglobal.com/stories/2300756/
Gitman, L. (2021). The State—and Future—of Sustainable Business in 2018 | Blog | BSR. Bsr.org. Retrieved 28 July 2021, from https://www.bsr.org/en/our-insights/blog-view/csr-sustainability-business-trends-now-and-the-future.
Morgan, K. (2021). The Great Resignation: How employers drove workers to quit. Retrieved 28 July 2021, from https://www.bbc.com/worklife/article/20210629-the-great-resignation-how-employers-drove-workers-to-quit
Ritcher, F. (2021). Chart: Which countries have the most electric cars?. Retrieved 28 July 2021, from https://www.weforum.org/agenda/2021/02/electric-vehicles-europe-percentage-sales/
Toyota, T. (2021). Why ignoring sustainability could make your business unsustainable. Retrieved 11 July 2021, from https://www.weforum.org/agenda/2018/09/sustainability-is-now-mission-critical-for-businesses-heres-why/
Uber. (2021). Retrieved 28 July 2021, from https://www.uber.com/us/en/about/sustainability/