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Learn how sustainable practices can lead to stronger profits and a healthier business.
As lockdowns spread across the globe in early 2020, few people or companies were safe from the devastation brought by COVID. But there was one bright spot: the environment. For the first time in decades, Italians saw fish in the Venice canals, New Yorkers heard birds all over the city, and global emissions were down 17%.
As companies paused to consider what the pandemic would mean for supply chains, consumer preferences, and new development, they also began to invest heavily into their efforts around sustainability.
Ten of the world’s largest food retailers joined together to encourage suppliers to remove food loss and waste from their supply chains. Starbucks joined with Microsoft, Nike and 7 others to launch Transform to Net Zero, a bold effort to get to net zero emissions by 2050. Unilever launched “Future Foods” to halve their food waste by 2025 by producing more vegan and vegetarian products.
Companies are investing time and money into taking serious action to become more sustainable. And customers are starting to notice.
Investments into sustainable, carbon neutral practices may seem more like an expensive distraction than a calculated business decision. But if done properly, it can contribute to lower costs, greater brand loyalty, and stronger profits.
Lower costs: While going green may have higher upfront costs in capex and planning time, you’ll find big savings in green practices. A McKinsey study that finds that up to 70% of EBITDA is at stake from climate change and sustainability issues. Citing everything from Coca Cola factories disrupted due to water shortages to a $56m quarterly loss at agribusiness giant due to unexpected flooding, the case is clear that investing in sustainable practices drives massive cost savings.
Brand loyalty: Customers want sustainability, and you’ll find proof in plenty of analytics. Forbes cites data like 68% of consumers seeking out sustainable products in buying decisions, while Newswhip shares that the number of social media engagements around the words ‘climate change’ have been growing exponentially, topping 130 million engagements in 2019. Consumers are demanding sustainable practices from the companies they buy from - and they’ll be loud about both success and failures via social media.
Price Premiums: While sustainability does mean savings that can be passed to customers, sustainable practices also allow higher revenues through premium products. Companies like Seventh Generation (a eco friendly cleaning product line) charges up to 2x more than competitive products. Real estate firms found that they can charge 8% higher rents, and sell units for 13% more, if they emphasize green practices in their buildings.
New Action: 4 Actions You Can Take Now
If lower costs, more brand loyalty, and premium products sounds like fun, that’s because they are. Here are the best ways to get started.
Assign an internal champion. This is a big task that should roll up to a C-suite executive with the ability and influence to get all company departments to contribute to the effort.
Measure your existing carbon footprint. Knowing where you stand, and understanding the biggest opportunities for carbon emissions reduction is the first step to making a change. Companies like Watershed (who will be pitching at our August 24th Sustainability Demo Day!) can help you understand your carbon footprint.
Identify the biggest area for improvement. Whether it’s in your transportation strategy, employee management, or data centers, start finding solutions for one area of focus.
Create your brand strategy. How will you communicate to current and potential employees, investors, and customers about your new sustainability initiatives? Learn more about sustainability in our upcoming demo day [Learn more about it and sign up for free]
N3 Innovation can help you start forming or expedite executing on your sustainability strategy. To learn more about how external innovation teams can drive Sustainability Initiatives, contact us today!
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N³ Innovation does not endorse the organizations or products mentioned in this newsletter. If you are interested to learn more, contact us today for a full landscape and targeted solutions.