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40+ Benefits of Sustainability

        posted by , April 11, 2013

Sustainability is a strategy that prioritizes people, planet and profit.

Done right, sustainability can dramatically improve an organization's impact on the ecology and social systems on which we all depend. Most firms who aggressively pursue sustainability also find that it's good for profits.

Many firms identify sustainability as being a significant source of competitive advantage. Commonly reported benefits include:

sustainability benefits

People & Planet

Sustainability improves the social conditions of employees, people in your extended supply chain and the communities in which you operate.

It improves the environment by reducing emissions, toxic pollution, waste and the consumption of natural resources. The following examples illustrate potential benefits.

BenefitExample
Improved HealthA cosmetics company requires the partners in its extended supply chain to provide health benefits to employees.
Safer ProductsA food manufacturer removes artificial colors, flavors and preservatives from products.
Improved Well BeingA bank runs a volunteer program that gives employees a sense of accomplishment and improves their overall sense of well being (self reported).
Safer WorkplacesA clothing manufacturer ensures that the manufacturing facilities of its extended partners follow strict fire codes.
Safer CommunitiesAn investment bank sponsors an after school program that provides music classes to underprivileged youth.
Reduced Social ProblemsA chain of restaurants provides food education to families to help reduce obesity in the community.
Community DevelopmentA hotel sells local traditional arts and crafts in its gift store in place of imported plastic souvenirs.
EducationA global shipping company sponsors a program to educate farmers in sustainable agriculture techniques in a region plagued by desertification and poverty.
Relief of PovertyA bank provides micro financing to small businesses in a developing country.
Human RightsA jewelry company ensures that its purchases of materials doesn't support or encourage human rights violations.
Reduced WasteA grocery chain changes its shipping methods to use reusable boxes.
Reduced ToxinsA food company replaces toxins in packaging with safe materials.
Reduced EmissionsAn industrial park shares renewable energy capital to reduce greenhouse gas emissions.
Resource ConservationA manufacturer reduces the amount of water used in its processes.
BiodiversityA forestry project allows a forest to return to its natural state to be harvested with sustainable methods.
Wildlife HabitatsA bank donates money to expand a wildlife sanctuary.
Reduced Water PollutionA farm uses organic farming techniques to reduce water pollution.
Reduced Environmental RiskAn energy company dramatically reduces the risks of an environmental incident at its facilities.
Improved EcologyA project uses sustainable techniques to restore recently desertified land to its natural state.


Profits

If your business is a profit making venture you'll no doubt be interested how your sustainability program can impact your profits.

A sustainability program can generally be viewed as an investment that pays long term dividends to a firm. Common benefits include:

BenefitExample
Sustainable Competitive AdvantageA shipping company reduces energy use and emissions. It's lower energy costs represent a sustained advantage over its competition.
Engaged EmployeesAn investment bank that supports employee volunteerism finds that employee turnover drops.
Improved Customer RelationshipsAn IT service outsourcing firm finds that their sustainability program helps customers reach their own sustainability targets. Sustainability becomes a key customer retention advantage.
Pricing PowerA food products manufacturer finds that products with all natural ingredients attract customers who are willing to pay more.
Improved ProductsA consumer goods manufacturer improves the quality of goods to reduce the emissions footprint of product returns.
Energy SavingsA sustainable office building uses passive solar architecture to reduce lighting and heating costs.
Less Sensitive To Resource PricesA grocery chain reduces the energy needs of its supply chain by using more rail transport. The company reduces it's sensitivity to oil prices.
Regulatory ComplianceA mining company adopts sustainable practices long before regulations force it to.
Reduced LiabilityA resource company reduces the risk of environmental incidents. This translates to reduced legal liability.
Improved ReputationA car manufacturer improves its reputation by pioneering low emission designs.
Marketing EffectivenessA food manufacturer finds that organic, all natural ingredients improve its marketing effectiveness (e.g. packaging).
Improved SalesA clothing manufacturer finds that organic cotton and sustainable materials improve sales.
New MarketsAn internet company develops innovative energy efficient data centers that utilize solar energy. They are able to productize their designs.
Innovative ProductsA solar power company develops innovative designs that transform markets.
Improved ProductivityA internet company allows employees to work from home to safe commuting related emissions. They find that employees work longer hours and are more productive.
Stronger Community RelationshipsA hotel in the South Pacific engages locals who are considered that customers of the hotel are damaging a nearby coral reef. The hotel agrees to educate its customers in snorkeling best practices. The hotel enjoys a stronger reputation in the community.
Good PressA bank sponsors a local program for healthier student lunch programs to fight obesity. The press praise the project. The project also enjoys social media attention.
Brand AwarenessA cosmetics company finds that its efforts to establish fair conditions for people in its extended supply chain leads to improved brand awareness (e.g. word of mouth publicity).
Brand ValueA food products company gains a strong reputation for its dedication to sustainable, healthy ingredients. Its practices dramatically build brand value.
Investor RelationsA chain of coffee shops known for its sustainable practices enjoys a far higher valuation on the market (PE) than its closest competitors.
Reduced CostsA manufacturing company reduces its consumption of energy and water. Costs are also reduced.
Improved MarginsA restaurant that offers sustainable, organic foods finds that pricing power drives higher margins.
Reduced RisksA resource company reduces environmental risks that threaten the survival of the firm.
Improved QualityA furniture manufacturer switches to sustainable, safe materials. It finds that customers perceive its new sustainable products as being higher quality.
Efficient Supply ChainA manufacturer diversifies its operations to produce goods closer to markets. The company enjoys a more efficient supply chain.
Improved Partner RelationshipsA retailer helps its partners to make their processes and practices sustainable. Relationships with partners improve resulting in less operational issues.
Product DifferentiationA construction company that specializes in sustainable buildings finds that it's a major product differentiation factor (makes their products unique in the marketplace).
Less Returns & RefundsA sporting goods company focuses on quality, sustainable materials and finds that customers are far less likely to return products.
ProfitA food products company identifies sustainable products as the source of significant revenue growth.




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