Why all businesses should become climate leaders and embrace sustainability in 2023
Climate change is something that most of us are concerned about, in fact, it was reported last year that around 75% of adults in the UK worry about climate change. It is hard to avoid the images of the devastating effect climate change is having on our planet and its inhabitants. Increasing awareness and external pressures are resulting in more companies taking action to reduce their climate impact and become carbon neutral.
75% of UK adults worry about climate change
For many businesses, becoming carbon neutral is the first step on their pathway to becoming net zero but understanding the terminology and necessary action can become overwhelming. Positive Planet, a net zero carbon advisory, recently surveyed 568 businesses to better understand their attitudes and behaviours relating to climate change and net zero. Only 11% of respondents measure their carbon emissions, and this falls to just 9% for small businesses. SMEs are keen to do more to address climate change but share that lack of skills and knowledge (65%), funding (55%) and time (47%) as the main reasons for not doing more. The doubts and concerns that change will happen, alongside barriers to taking steps to make it happen, appear to be preventing business owners from shifting to a net zero mindset, with only 43% of business owners surveyed knew what was meant by the term ‘net zero’.
This shows that there is much more to be done to educate the general public and business owners of all sizes on what it means to be net zero. For now though, let’s take a look at just some of the reasons why you and your business should take action and embrace broader sustainability in 2023.
1. Customers are showing a growing preference for carbon-neutral brands
Environmental concerns are increasingly influencing customers’ buying decisions, leading to a fundamental change in consumer and business buying behaviour; today, customers demand more than just quality. They actively choose brands that align with their values and operate transparently. Today, most customers are more prepared to change their consumer relationships. Of those that report sustainability as an important factor, 70% would be willing to pay a premium of 35% more for sustainable and environmentally responsible brands. In this context, companies that thrive are those willing to adapt their strategies.
2. Employees prefer employers that think and act responsibly
The current generation of employee talent is evaluating their potential job offers based on a company’s positive environmental and social sustainability impact. In addition, Positive Planet clients are increasingly reporting that job candidates ask whether the company is committed to sustainability and has credentials, such as carbon neutrality, to prove it. By 2025 millennials will account for 75% of the global workforce, which means that employers need to be more aware and aligned to their needs to attract and retain top talent.
3. Incorporating sustainability into your business helps to grow your revenue and reduce your costs
Companies often wonder whether sustainability “undermines or improves financial results”. However, according to research by non-profit organisation CDP, companies who diligently plan for and mitigate their impact on climate change can gain an 18% higher return on investment than businesses that do not. Additionally, companies with sustainable products are growing 5.6 times faster than their non-sustainable alternatives.
Companies who diligently plan for and mitigate their impact on climate change can gain an 18% higher ROI than businesses that do not
4. Investors are looking for future-oriented businesses and those not afraid to move first
Sustainable investing is important because it can both mitigate investment risk and support companies taking active roles in key issues such as climate change. Sustainable investors look for opportunities and financial returns in companies with high environmental, social, and governance (ESG) priorities.
According to Morgan Stanley’s Institute for Sustainable Investing 2021 report, 79% of all investors and 99% of millennial investors, reported interest in sustainable investing. For more than 20 years, companies with high ESG values have shown consistent resilience and growth. Even through the economic stress of the COVID-19 pandemic, ESG stocks had above-market returns.
99% of millennial investors reported interest in sustainable investing
5. It’s only a matter of time until climate-focused regulations heavily impact how you conduct business
Climate-focused regulations are changing and will benefit those companies that successfully incorporate sustainability into their business practices. While some companies can still voluntarily disclose information regarding their sustainable initiatives, non-financial reporting is already mandatory for most large companies.
6. Sustainability is a long-term programme
Successful companies realise that action on climate is critical to their success. These companies reap the rewards of increased revenue, reduced costs, engaging stakeholders and reduced risks. Changing the mindset and looking at this global issue as an opportunity to be the pioneer within your industry, take that bold step and gain that competitive advantage. This is not a single step, short-term process though. Becoming more sustainable is a journey; now is the best time to start.
