Two-thirds of smaller Canadian companies acknowledge that sustainable business practices will improve their growth and profitability, according to data from HSBC. However, only 25% are prioritizing investment to become a more sustainable business.
“Smart sustainable business practices deliver real prosperity for everyone,” says Linda Seymour, Executive Vice-President and Head of Commercial Banking at HSBC Bank Canada. “However, while many smaller companies are trying to do the right thing, they face intense competition, tight profit margins and the costs of meeting existing responsibilities.
Most businesses hope to become sustainable, but for many, reaching that goal is problematic. The road to the finish is filled with obstacles. Below are some practical steps that firms can take to put sustainability at the heart of their business:
- Looking for efficiencies in their supply chainthat can be both green and cost-effective. For example, solutions which mean that raw materials travel shorter distance can help cut emissions and save transport costs
- Incorporating a social license to operate into business strategy refers to community members’ tacit willingness to let a company operate in their region. Finding ways of systematically incorporating the community into all strategic decisions is imperative.
- Adapting to customers’ changing preferences by changing their business model. Environmentally-conscious consumers may respond well to products sourced and produced in a sustainable way, which could boost revenues
- Creating conditions that support sustainability-related innovations. Smart companies treat sustainability as innovation’s new frontier.
- Investing in renewable sources of energy such as wind turbines and other in order to manage their environmental footprint.
- Introducing and enforcing codes of conduct and policieson issues such as human rights and relationships with local communities.
- Embedding Sustainability in Corporate Culture. Businesses need to embed sustainability into their culture, so that sustainability strategies do not lose momentum with a new CEO.
- Reporting on Environmental, Social and Governance (ESG) performance. Transparency can be an important first step in winning consumers and investors’ trust
All in all, successful companies have realized that sustainability is a key element of strategy, and are profiting from it. When sustainability is tightly integrated with the business, it is possible to achieve financial success without burdening the environment.