Why investing in sustainability is still crucial in times of economic and political crises
A recent study by the Capgemini Research Institute showed that most business leaders see environmental sustainability as a costly obligation rather than an investment in the future. Whilst most recognize current sustainability requirements and many have announced net zero commitments, there is still a gap between ideal long-term ambitions and realistic short-term actions. The study suggests that whilst two thirds of the 668 organizations that were investigated have sustainability on the agenda, only a third of respondents are redesigning their operating model accordingly. Many executives are still unclear as to the business case for sustainability and view it as a non-viable option. Reasons for holding back are due to fears of short-term cost implications. Sustainability is frequently seen as a cost center, rather than a value center. Amongst other barriers, what validates this argument even more is the financial pressures stemming from the current state of the economy.
Moreso than normal, businesses are contending with numerous challenges from rising inflation to supply chain issues, as well as eye-watering energy costs. A survey of chief executives by KPMG found that half of CEO’s are contemplating pausing or reconsidering their ESG efforts because of economic pressures, with 34% having already done so. The cuts to sustainability budgets reveal worrying long term risks, particularly in the importance of business in achieving net zero. Of course, both the geopolitical and economic crises are hugely important, but this shouldn’t equate in hitting pause on the environmental crisis too. In fact, in contrast to these concerns, much analysis reveals that sustainability and financial metrics can go hand in hand if the right practices are in place; it’s about having informed knowledge. The study by Capgemini, found that organizations that have exceeded their competition in implementing sustainability practices, have also outpaced them in revenue per employee.
Choosing not to invest in sustainability
Retracting from investment during a recession doesn’t leave businesses in the best position to adapt to change. Choosing not to invest in sustainability will only leave businesses lurching from one crisis to the next. Sustainable investment doesn’t always have to have a big price tag on it either. There are numerous solutions to reducing your carbon footprint that don’t cost the earth yet are still highly effective. Firstly, reducing waste will save you money and this is an easy and efficient way to reduce your carbon footprint. Audit your current waste and find ways to recycle, reuse and reduce more. Whilst reducing waste, selling unwanted materials is another way to make it cost-efficient. Becoming compliant with future regulation will keep your company ahead of the game and reduce disruption in the future, that could be costly. Being certified and in line with regulation will in turn, bring new customers as demand for eco-friendly practices for consumers, has never been higher. Business reputation can be fragile, but by proving that you’re going above and beyond demonstrates your commitment to existing and potential customers. Lastly, clarifying and honing in on your goals, whilst also getting employees involved, keeps motivation high, particularly in times of struggle. Goals can be small and incremental and will still go a long way in providing a more sustainable future.
eco-shaper has a realm of resources that teaches companies and individuals how to make positive sustainability choices, so that you and your employees can continue to learn and grow. With more knowledge, comes more power, and more influence too. Following the ‘teach a man to fish’ methodology, eco-shaper aims to help your company and others to accelerate the sustainability movement and move towards being net positive in a cost-effective way.
Further reading: 5 easy steps to net positive
Be a net-zero hero
At eco-shaper, we drive action on climate change and streamline carbon footprinting. For example, we can help calculate emissions across the entire ecosystem that companies work across and produce automated reporting based on outcomes. It’s like Xero, for sustainability. Contact us to be part of our research group on