Why are Sustainable practices, ESG and Social Impact Important for Business

Why are Sustainable practices, ESG and Social Impact Important for Business

For those businesses who are unsure about how sustainability, ESG or social impact relates to them, there are different ways you can identify your own needs and focus areas to work on. One way to develop insights is to think about mega trends that are currently occurring across the world and within your environment and community.

We find when we apply original research to the many areas of sustainable development and share this back with our clients, they immediately see many different ways to make a difference. We see that it gives clarity to their concerns about how to implement sustainable practices in their workplace, and broadens the perspectives they held about which investments they could make that would create positive value. In other words we can find the right strategy that works for the playing field they have

So we thought we would share an example of how businesses can use research to initiate ideas and assess how these trends may be affecting their progress on sustainable development within their market context.

Only around 10% of the workforce feel like they are currently thriving in their work.

We all may see this playing out differently. “The Great Resignation”…….”The Great Reset”……”The Great Re-imagination”. But you can be sure there are some people at your business re-evaluating the role of work in their lives.

For those businesses where workplace health, safety and wellbeing is a big part of their risk profile, we have seen that this trend may also be affecting the ability of workers to stay focused on the controls that should be in place to keep them safe.

With external factors associated with the pandemic, like trailing low energy levels after they have suffered from COVID-19, or anxiety about re-entering the workplace after working from home, it is harder for those workers to focus their full attention on being safe when required.

Alternatively this same affect could lead to supervisors and employers not being able to give enough support to their teams as they normally would. This can not only impact health, safety and wellbeing, but communication about business priorities, impact on the environment, performance development, and commitment to delivery of quality customer services.

To support everyone in your business that may feel they are not thriving, and first and easiest step to take is to make sure you practice positive engagement which can ultimately lead to an improved culture of inclusion that benefits both your workers and the overall aim of your business.

The rate of growth in data generation is staggering

Seen the statistics? “90% of worlds data created in last 2 years (2020)” or “The amount of digital data created over the next five years will be greater than twice the amount of data created since the advent of digital storage”. What is interesting is we are only storing a fraction (<5%) of the data created for future use.

Digital resources can improve your business resiliency, and when stored for later use, they can help you adapt to disruptions to your business, but quickly restoring your operations, but also capitalise on any changed conditions.

You can also use your stored data to assist you in development of new and innovative products or services, and expand your revenue streams.

But perhaps most useful, is that businesses can use data to assist with their engagement of employees, customers and suppliers when taking a pulse reading for where things are at - it can help create and sustain high levels of trust and empathy when done right. And that can ultimately lead to improved customer satisfaction and loyalty.

By 2030, 74% of the workforce will be Gen Z and Millennials.

Arguably the people who are best skilled in harnessing all of that data will dominate the workforce – they will be your employees, your customers and your suppliers. These and future generations will be able to assist your business discover new practices by leveraging data.

These generations of employees will have a different focus on hardware, software, security and privacy aspects of the technology your business utilises. They will probably want to know that the tech is also sustainably manufactured and procured.

Millennials and Generation Z are also actively concerned about the state of our world, and they genuinely want to balance meeting the challenges of their everyday life, with the desire to make the world a better place. As an example, when surveyed about their top 5 concerns, climate change came in as the No.2 concern, right behind cost of living.

70% of employees now demand purposeful work and their company to take a strong position on social issues.

In addition to this, 60% of jobseekers, consumers and investors will likely view a proponents EDI and ESG record prior to making a decision.

Last year a McKinsey survey found "Nearly two-thirds of US-based employees we surveyed said that COVID-19 has caused them to reflect on their purpose in life. And nearly half said that they are reconsidering the kind of work they do because of the pandemic.Millennials were three times more likely than others to say that they were reevaluating work."

This trend could likely have a profound impact on your employee retention rate as well as talent development process. Productivity can increase if workers feel they can live their purpose at work. They will probably be healthier, more likely to stay at the company and overall more resilient. Your business could achieve improved employee engagement, loyalty and even a willingness to recommend your business to others if they see that their personal purpose is aligned to that of your business.

Pathways to aligning employees purpose in life with those of your business are many

80% of consumers will buy a sustainable product over one that is not.

This speaks for itself. When comparing apples for apples, if your product is sustainable and the others are not, you can grow your customer base.

Some recent surveys completed in Australia, show this number to be even higher at 90% of consumers. They also found that 85% of consumers want retailers and brands to be transparent about the sustainability of your product or service.

Whilst the same people think that our governments should primarily be accountable for ensuring sustainable development occurs, they are also realistic in that they think that it will be really come down to the business world to make things happen.

Even if your business does not sell directly to consumers, it is most likely that the businesses you supply directly or several steps down the supply chain will. And they are going to be asking their supply chain more and more to implement sustainable practices, to ensure their customers are happy and feel as though they are being fully transparent.

Consumers will review your products sustainability

Investment in global assets contributing to sustainable development, is on track to exceed $53 Trillion by 2025.

This represents nearly a third of projected total physical assets under management. So if your business relies of investors in some way, or even utilises business loans, you are more likely to win investment by being sustainable.

The world of sustainable finance is growing fast (15% per annum growth). Investors no longer face a choice between profit and saving the planet, and so sustainable finance is prioritising businesses that help the environment, but it also focussed on inclusion, ethics and businesses that are working to improve social equity.

Even if you don't need finance right now as a business, consider this trend as a different way of validating what consumers are telling the business world. Investors don't put their money into something that wont give them a great payback, and there is mounting evidence within the investment world that ESG based assets provide better returns than their peers (in fact 5-30% better). If your business is sustainable, you will likely be more profitable in the long term.

How will these mega trends respond to the needs and innovations of future generations?

It is likely that no one fully knows how society will perceive its own needs in the future. But we would like to guess that the fundamental principles of connectedness and social equity will continue to grow through easy access to data. So it will be important that your business has a strategy to keep its knowledge up to date, allowing you to adapt the management of your processes which have a sustainability impact on the environment, your community, diversity and inclusion.

Our simplest recommendation on how to do this is by creating a simple stakeholder engagement plan, and ensure that you embed that into your culture over the long term.

What is our high level take away for you from these mega trends?

To be future focussed and successful, business needs to engage people, starting with their own employees, to identify how you can be more sustainable and improve your social impact. Otherwise, you risk being left behind.

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We are working hard on providing great free resources for our clients and our followers, because it fits with our purpose.

At everfocus our vision is that both our local and global community embrace sustainability and work collaboratively to achieve it. Our mission is to create a valuable service that enhances organisations’ focus on being sustainable.

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