Entries for Blas na hÉireann 2023
What is the Corporate Sustainability Reporting Directive and how does it affect SMEs?
You’ve probably heard about the importance of having a strong sustainability strategy for your business. But you might be wondering, do I really need one? And just how crucial is it when I already have a general idea of what I’m doing and when to do it?
In a constantly changing landscape, having a sustainability strategy is not just a good idea, it’s essential for your brand to remain competitive and relevant.
In this article we are going to cover the following 5 key areas of your business that your sustainability strategy can help you with:
- Improve Stakeholder Relations
- Improve Brand Loyalty and Attract New Customers
- Reduce Operating Costs
- Comply with Regulations
- Reduce Risk
Let’s explore why a sustainability strategy can benefit your business in five key areas:
1. Improve Stakeholder Relations
Every organisation aims to maintain positive stakeholder relations. Developing a robust sustainability strategy involves examining how your business interacts with investors, suppliers, and the local community. It also includes creating a system for transparent communication and developing clear governance policies.
Sustainability is not a single person job, it requires collaboration and engagement with all persons affected by your business. By developing a clear set of strategic actions and engaging with your stakeholders, your business will be able to identify any present challenges and new opportunities to improve your business.
This adds immense value, especially during times of crisis, as it helps build trust, effective communication, and financial resilience.
2. Improve Brand Loyalty and Attract New Customers
Research has shown that companies with a high commitment to the environment, its governance procedures and policies, as well as its social impact outperform the market in the medium and long term. Developing a sustainability strategy that covers all of these key areas allows your business to thrive in a market that is driven by conscious consumer behaviour. A Nielsen survey revealed that millennials are twice as likely as baby boomers to change habits to reduce environmental impact. Gen-Z, the sustainability generation, now leads a growing trend of ever more environmentally and socially conscious consumers with each passing generation.
With these trends at the forefront of our minds, it becomes clear that prioritising sustainability by developing and communicating a clear strategy that covers your environmental, governance and social commitments can foster brand loyalty among these conscious consumers.
3. Reduce Operating Costs
According to McKinsey, a sustainability strategy can significantly reduce costs and impact operating profits by up to 60%.
By developing and tracking sustainability initiatives, your business can identify areas where operating costs can be reduced, leading to increased profitability. For example, by tracking your energy use and identifying reduction opportunities your business could see an immediate impact on overall costs. Another example is that by completing a system audit you can identify areas in your business that require immediate attention, such as leaks in pipes, that could be currently costing you much more than you think!
Additionally, implementing sustainable practices may make your business eligible for grants and subsidies, further enhancing financial benefits.
4. Comply with Regulations
Governments worldwide are implementing more environmental regulations and directives. Having a sustainability strategy in place helps your business stay informed, reduce risk, and ensure compliance.
Once your strategy is in place and you have a system up and running to track your activities your business will be better prepared to comply with any new regulations and directives.
By committing to continuous improvement, your business can establish higher standards and mitigate potential risks.
5. Reduce Risk
By mapping out your sustainability strategy and defining action points for each objective, you create a roadmap that enables consistent data collection and analytics. Regular assessment of this data helps identify areas of risk within your organisation. Armed with this knowledge, you can take proactive measures to mitigate and minimise those risks.
Additionally, your sustainability strategy also helps you build resilience to external factors that can affect your business such as supply chain disruptions, weather events and economic conditions. By ensuring that your business has clear governance policies, risk policies and communicates transparently with its stakeholders it can reduce the impact of factors that are sometimes outside of your business’ control.
Sustainable businesses are built to last, especially when long-term strategies are implemented.
If you’re unsure where to start with your sustainability strategy, reach out to our team to learn how the ENSO platform can support you on your journey.
Overall, having a strategy is one thing, but putting it into action is what truly drives success. Remember to always include clear KPIs and monitor track your progress with actionable goals.
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Resources:
The resources used for this article include a study from Neilson and one from McKinsey.