The Impact of Business Sustainability on Profit

Businesses have long focused on profit over their ESG impact for the benefit of shareholders, employees, and more. However, businesses no longer have to make a choice between making the largest profit or making the greatest impact on the environment. Businesses with ESG values built into their strategy, can not just avoid losses but can even drive more rapid growth.

What Qualifies a Sustainable Business?

A sustainable business works to minimize any potential negative effects it may have on the environment while continuing to make a profit and grow. Sustainable businesses believe that they can add value to shareholders and the environment at the same time. To do this, these businesses must consider a wide range of factors when making business decisions. These businesses must continuously monitor their impact to make sure that their growing profits don’t turn into societal liabilities.

Businesses choose to become sustainable for many reasons including worries about the environment and shareholder pressure to start measuring ESG impact. In addition, research by McKinsey shows that companies with high ESG ratings have a lower cost of debt and equity which can lead to ventures in new spaces as well as public support. Another McKinsey survey also stated that over 3,000 employees said that the main reason why a business becomes sustainable is to align with its goals and core values. There are many examples of sustainability in business. This can include using sustainable materials when manufacturing products like Adidas, relying on renewable energy to power facilities like Intel, and more.

Example of Sustainable Businesses

Adidas

Recently the athletic apparel behemoth, Adidas collaborated with the non-profit Parley for the Oceans to create new shoes from ocean plastic. Each pair of shoes contains the waste of approximately eleven plastic bottles. The first limited release of these shoes with 7,000 pairs sold out almost instantly. In addition, Adidas and Parley hosted runs in many major cities to raise money for the cause. These runs ended up raising nearly a million dollars to help fund Parley’s education initiatives. Forbes estimates that the brand will make more than a billion dollars in revenue from these new shoes while helping solve a large environmental problem and having a positive ESG impact.

Ben and Jerry’s

Ben and Jerry’s is another company making strides in reducing their carbon emissions and increasing their ESG impact. In 2002 the company launched a number of programs designed to offset their carbon emmissions. Many of these programs are still in place today. In addition, they ran campaigns to promote global warming advocacy and invested capital into more efficient supply chains to decrease their footprint. They have done even more since then by making sure that all their products are made only from non-GMO ingredients. Ben and Jerry’s is working on increasing sustainability at their farms and has set a goal to use 100% renewable energy by 2025.

Dell

Dell has also worked to advance sustainability while building innovative technology products. The company has started using alternative materials in products and packaging. They have specifically focused on the recyclability of their products and what happens when they are disposed of. In addition, they have worked on many improvements in energy efficiency and plan to reduce the energy intensity of their products by 80%.

Some of Dell’s notable actions include sourcing sustainable materials, only partnering with responsible suppliers, and even more.

Creating Sustainable Objectives

All sustainable businesses must set objectives to judge their actions by and to see how to improve. These can be created by judging sustainability problems an organization is currently facing. For example, businesses can set objectives by judging if they produce too much waste or if they have a negative impact on their community. Using this they can create actionable goals with set dates and criteria to reach.

All in all, the future of business is sustainable. After centuries of treating the Earth as a dumpster, organizations must become sustainable to improve their impact. As innovations drastically reduce the cost of adopting ESG values it is the perfect time for businesses to start thinking about their environmental impact.

Thanks for reading my article! I’m Krish Lulla, a 15-year-old passionate about business and finance and its intersection with technology. If you have any questions feel free to contact me at krish.lulla1@gmail.com You can learn more about me at my website krishlulla.com