Businesses that invest in sustainability do better financially, reduce costs, increase their brand value, attract investors and reduce risks
As sustainability is capturing the attention of consumers, regulators, activists and the media, organizations and companies can no longer afford to ignore it. Chief financial officers should consider sustainability issues more seriously, because in addition to making a positive contribution to the world, there are multiple benefits to be gained:
- Reducing costs
According to the Beyond Supply Chains report by the World Economic Forum (WEF), sustainable supply chain practices result in a 9% to 16% cost reduction.
- Increasing annual revenue
The annual returns of “green giant” companies like Toyota, Nike and Whole Foods have averaged, over the past five years, 11.7% higher than their leading competitors. Also, Grainger, a wholesaler of industrial supplies, saw a 20% increase in green product purchases even during the U.S. economic downturn.
- Improving brand image
According to the WEF study, businesses that prioritize sustainability will see a measurable rise in their brand value, to the tune of 15% to 30%.
- Attracting investors
According to a recent study by the Boston Consulting Group investors are now looking at sustainability-related data when making investment decisions: 75% of senior executives at investment firms see a company’s sustainability performance as materially important to their investment decisions.
- Reducing risks
The globalization of supply chains has, undoubtedly, increased the exposure to risk and potential sustainability issues for multinationals: lead contaminated paint, recently, cost a toy company $100 million in recalled product.
- The GRI Standards
Today, 80% of the world’s 250 largest companies are using the Global Reporting Initiative’s Standards for sustainability reporting. They are dealing with their most important impacts responsibly, taking a structured, systematic approach to improving performance and following a 4-step process: identify – measure – manage – change.
Sustainability reporting according to the Global Reporting Initiative’s Standards helps companies identify key issues to focus on and, accordingly, improve productivity and reduce costs. Additionally, through gaining access to new markets and clients, their competitiveness improves. And these are just some of the benefits.
References:
This article was compiled using an article from CFO. For the sake of readability, we did not use brackets or ellipses but made sure that the extra or missing words did not change the article’s meaning. If you would like to quote these written sources from the original please revert to the links below:
http://ww2.cfo.com/supply-chain/2016/07/cfos-need-consider-sustainability
https://www.weforum.org/reports/beyond-supply-chains-empowering-responsible-value-chains/