We are now three months into what’s proving to be a very active year. The proposed regulatory changes laid out in the EU’s Omnibus package are raising questions, and perhaps the biggest question is whether sustainability still matters. The answer — and it’s a resounding one — is yes, it does.
Yes, sustainability still matters
Sustainability constitutes more than just a way to address environmental objectives and preserve our environment. When applied in a balanced way, sustainability creates long-term business success. The organizations that embed sustainability strategies in their operations, products and supply chains eventually emerge as clear leaders. But even before they establish themselves as leaders, they find that sustainability helps them:
- Differentiate themselves in the marketplace.
- Innovate.
- Attract investment.
- Achieve cost savings.
- Enhance customer loyalty.
- Strengthen their ability to manage climate-related risks.
When offered pathways to cost savings, improved customer loyalty or new investment, business leaders usually follow them. Sustainability can provide those pathways.
Consider these examples of reduced resource use and cost savings that were achieved through sustainability initiatives:
- Pharma giant Novartis reduced water consumption at its Stryków, Poland, site from 3,900 cubic meters per year to 320 cubic meters per year by changing the way it manufactures metformin, a drug used to treat diabetes.
- Columbia Manufacturing, a Massachusetts-based maker of school furniture, saved $3 million in water and sewer fees by upgrading its plating equipment and introducing a zero-discharge wastewater treatment system.
- Houston’s Memorial Hermann Health System achieved $47 million in utility cost savings through energy benchmarking, reprogramming of air volume controls, HVAC system retro-commissioning and other operational changes. In fact, Bank of America notes that even small businesses can reduce their utility costs anywhere from 10% to 30% through energy efficiency initiatives.
Measures like these simply make good business sense.
An effective business strategy
Society tends to take a one-dimensional view of sustainability, seeing it only as a way to tackle environmental and climate-related issues. But views are changing.
Late last year, a BDO-commissioned survey of 500 CFOs across sectors revealed that more than 75% of them planned to maintain or increase their investment in sustainability. They identified benefits such as new business opportunities, innovation, increased revenue and cost savings, among others.
As these CFOs reported, “green” initiatives offer dividends that go beyond reduced environmental impact. While the pendulum of policy-making continues to swing between a stronger and a more diluted emphasis on sustainability, companies can and should find a sweet spot in the middle. A strategic, balanced approach that integrates sustainability into the business will bring advantages in the short term and success in the long term.
— Paul
