Why Sustainable Businesses Outperform Non-Sustainable Businesses?
Sustainability is People, Planet AND Profit, highlighting its three pillars: Social responsibility, Environmental management, and Financial success.
“Sustainability boosts your company performance in every dimension”
In today’s fast-paced business world, sustainability isn’t just nice-to-have; it is indeed a smart financial move. If you are a business leader wondering whether sustainability means sacrificing financial performance, the answer is no. Today, we’ll explore how sustainability and profitability go hand in hand, supported by research and practical examples.
Sustainable companies outshine their non-sustainable counterparts in financial terms. Sustainable businesses have a 21% higher profitability, a 20% sales boost, and up to 18% higher productivity. What does this mean for you? Let’s say you run a retail company. By going green with eco-friendly packaging and energy-efficient practices, you not only appeal to eco-conscious customers but also cut costs on waste disposal and energy bills, and boosting your profits (Gallup, 2023).
Other research further supports the link between sustainability and financial success. Sustainable companies tend to have a 7.2% higher return on equity, are twice as likely to use more green energy, and offer 18% higher salaries compared to non-sustainable ones. Let’s take for example a tech company investing in solar panels for energy. This not only reduces their carbon footprint but also guarantees long-term energy savings. Offering better pay can attract top talent, boosting productivity and ultimately leading to higher profits (NYU, 2020).
In a nutshell, being a sustainable business is not just about doing good for planet and society; it boosts your profits too. Research from Gallup and NYU highlight the financial perks of sustainability, including higher profits, increased sales, and better returns.
By aligning your values with your customers and investors, you can steer your business towards long-term success while making a positive impact on the world. Remember, it’s not a choice between profit and sustainability; They go hand in hand leading to a brighter, wealthier future for your business.
In our next article, we will show you more sustainability opportunities which directly improve your bottom line.
References:
Pendell, R. (2022, June 14). The World’s $7.8 Trillion Workplace Problem. Gallup.com. https://www.gallup.com/workplace/393497/world-trillion-workplace-problem.aspx
Whelan, T., Atz, U., Holt, T., & Clark, C. (2021). ESG AND FINANCIAL PERFORMANCE: Uncovering the Relationship by Aggregating Evidence from 1,000 Plus Studies. https://www.stern.nyu.edu/sites/default/files/assets/documents/NYU-RAM_ESG-Paper_2021%20Rev_0.pdf
Never miss a story!
Sign up for more Transformational Leadership stories, inspirations and tips