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Pursuing environmental, social and corporate governance (ESG) goals and more circular systems of operation has become the new norm for world-leading businesses, but misconceptions about sustainability may still be discouraging some companies from joining in and capitalizing on the benefits sustainability can bring.
Despite the hang-ups, better systems of managing waste, energy and resources can deliver multiple rewards for the planet and for your business. Here’s the truth about five common sustainability myths that could be holding you back from implementing greener, more efficient systems of operation.
Making the changes needed to become a more sustainable business does have some initial short-term costs. However, the potential for long-term cost savings far outweighs those early investments. Conserving water, reducing waste by reusing or recycling materials and using energy-efficient equipment or alternative energy sources will ultimately reduce your operating costs and benefit your bottom line. Certain sustainable practices can also qualify your business for tax breaks, rebates, government grants and other financial incentives. Developing a well-thought-out strategy and a clear plan for execution will keep your initial expenses from getting out of control.
Businesses that believe their sustainability efforts aren’t paying off may be ignoring the real reason their products or services aren’t resonating with customers. Greenwashing, poor marketing efforts or products or services that don’t truly meet your target market’s needs could be at fault. There’s plenty of evidence showing that customers care about ESG and sustainability—and so do employees, partners and investors:
Sustainability-minded companies are more attractive to customers, employees and investors, which can mean higher valuations, new market opportunities and untapped revenue streams. Almost three-quarters of the 50 top-performing companies in the S&P 500 score above the median on ESG measures.
Sustainability can also facilitate greater access to capital from a wide range of sources, including government grants, investors and lenders. Loans linked to ESG have become the fastest-growing part of the business credit market. In 2021, lenders issued more than $681 billion worth of green and sustainability-linked loans, an increase of 275% over 2020.
Amid “doom and gloom” news of natural disasters and soaring temperatures, it may seem as if nothing your company can do will help slow the pace of climate change. Keeping global temperature increases below 1.5 degrees Celsius in this century is key to halting the worst effects of climate change. But at current greenhouse gas emission levels, temperatures will rise by more than double that figure in the next two decades, according to the U.N.’s Intergovernmental Panel on Climate Change (IPCC).
The world is in crisis, but there’s still time to make meaningful changes. Cutting emissions in half by 2030 can keep warming within acceptable limits, according to the IPCC. Rapid action, deep commitment and sound strategies will be required to achieve this goal. With more than three-fourths of emissions coming from industry, energy and transportation sources, businesses should lead the charge to save the planet.
A decade ago, touting your organization’s sustainability may have been a “warm and fuzzy” extra in your brand messaging. Today, however, the dollar value of sustainable practices is hitting close to home for corporations. Nearly 30% of organizations report feeling the impact of climate-related disasters on their operations; more than one-quarter face shortages of resources due to climate change.
Regulatory pressures are rapidly making sustainability practices essential too, even in the latest stages of product lifecycles. Investors are insisting on greater transparency into corporate ESG. In response, the SEC has proposed new disclosure and reporting requirements to create a standard methodology for companies to demonstrate their ESG actions and outcomes. Showing concrete evidence of sustainability will soon be a necessity for public companies. Even privately held firms will need to be transparent about their environmental impact if they hope to be competitive.
Nearly 60% of global executives believe the world has reached a tipping point when it comes to climate change. Fortunately, there’s still time to tip the scales in the planet’s favor.
By separating fact from fiction and committing to meaningful sustainability goals, your business can benefit both the environment and your bottom line.
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