Maximising cash flow

Why having a sustainable strategy makes good business sense

Sure, being a sustainable business sounds like the responsible thing to do, but is it right for your long-term success? We look at the benefits of sustainable practices and the best way to make an impact.

In real terms, sustainability is about taking steps to ensure that the impact you have on the world around you is a positive one. It’s a concept that has gained significant traction in the business world as companies have begun embracing everything from green manufacturing methods to ethical hiring practices.

Of course, this all sounds great in theory. But as a business owner, you may be wondering how you balance a commitment to people and the planet with the pursuit of profit, particularly with limited resources.

The good news is, whether you’re a startup of two or a company of 200, adopting a more sustainable strategy isn’t just feasible but increasingly important.

The benefits of good behaviour

With the rise of the conscious consumer and greater transparency around company conduct, people are becoming more selective about the businesses they support. According to a study by HP, consumers hold companies accountable for their impact on the environment. And the majority are willing to pay 5–10% more on sustainable products or services.

Evidence also shows that sustainable business practices have the potential to improve employee recruitment, retention and morale. Today’s workers are more motivated by mission and purpose than previous generations and will seek out companies looking to provide value to society. And when an employer is doing good things, employees are more likely to feel good about working there, which, in turn, can help boost overall productivity.

The upshot is, just as poor practice can have a negative effect, taking a responsible approach provides an opportunity to position your business more favourably in the hearts and minds of the people you want to attract.

Making a start

If you’re warm to the idea but not sure where to begin, you can take inspiration from the United Nation’s Sustainability Development Goals, a set of 17 goals designed to put the world on a more sustainable path by 2030. These include reduced inequalities, climate action, decent work and economic growth, and responsible consumption and production, among others.

Depending on the nature of your business, sustainable measures that support these goals could entail:

  • improving recruitment practices; for instance, by attracting a more diverse talent pool and boost the representation of women in senior roles
  • reducing energy consumption - small businesses can tap into a free, tailored energy advice program delivered by Business Australia. An Australian Government Initiative, Beap was designed to help reduce inefficiencies and cut rising energy costs.
  • providing better working conditions; this could involve fairer salaries and remuneration packages, more flexible hours, training/employee development, and a greater commitment to physical and mental wellbeing
  • upgrading equipment, whether it’s your heating or refrigeration system, you can find a range of new, more efficient options on the market, and there may be a scheme in your state that can help with replacement costs
  • reducing waste and pollution; Aussies generate one of the highest rates of plastic waste in the developed world. Meanwhile, e-waste is growing three times faster than the rate of municipal waste. A comprehensive recycling scheme is a must
  • supporting a local cause, whether it’s a local footy team, school or charity, giving back to a cause that reflects your values can help to boost your profile in the community.

Getting to the heart of the matter

These are all worthy measures that can help to trim waste and improve your brand perception. But just changing your light bulbs to LEDs or adopting a recycling program will only get you so far. To be truly effective, sustainable practices should embrace good housekeeping and be tailored to your core business, too.

The following steps can help to take your business forward in a more strategic direction:

1. Decide what matters most to you, and pursue effective sustainable measures you genuinely care about. Authenticity is key to winning over savvy consumers.

2. Review your vision. Perhaps you need a more ambitious goal to propel your business towards a more sustainable future.

3. Engage deeply with all your stakeholders, then aim to marry your business goals with their broader needs to create shared value.

4. Look closely at your end-to-end operations. This will help you identify which areas to focus on to support your sustainability efforts and ensure gains in one area don’t lead to losses in another.

5. Consider ways to optimise your product offering and operating models to deliver value in a sustainable way. By putting sustainability at the heart of its innovation process, Nike created the $1 billion-plus Flyknit line, generating large profit margins and 80% less waste than regular footwear.

6. Aim for clear, consistent messaging and be mindful that with increased awareness comes increased scrutiny. Coles supermarkets drew criticism for its ‘Little Shop’ plastic collectables after touting its commitment to sustainability with a ban on single-use plastic bags.

7. Embrace the concept of the triple bottom line and aim to measure your social and environmental impacts, as well as your financial performance. This will provide a more holistic view of how you’re tracking and help to foster sustainable results.

Every little bit helps when it comes to moving the world in a healthier direction. And it’s no coincidence that not only bigger, but also smaller organisations, such as Rothy’s and Pod & Parcel, have made a commitment to embedding responsibility and sustainability in their brand. Follow their lead and make sustainability a core part of your business strategy and you can help to boost your impact and fuel the long-term viability of your business.

Follow their lead and make sustainability a core part of your business strategy and you can help to boost your impact and fuel the long-term viability of your business.

Need help with your business costs?

Try our free energy comparison tool. We're identifying $808 on average in potential estimated savings* per annum for businesses. Simply join Business Australia as a free member.

Already a member? Get started
 

*Based on 958 meters switched between 1 July 2019 to 3 April 2020

Found this useful?

Subscribe to our newsletter and receive the best business tips and articles straight to your inbox.

Thank you for signing up to our newsletter. You're one step closer to receiving more insightful information to help better your business.

We take your privacy seriously and by subscribing to our newsletter you agree to the terms of our Privacy Policy available below.