January 1, 2021 Sophie Mullins
Why businesses are striving for sustainability
According to estimates published by the Department for Business, Energy and Industrial Strategy (BEIS), the business sector contributed around 18% of carbon dioxide emissions in the UK in 2019. That is a 42% decrease since 1990.
However, while their collective carbon footprint has shrunk over the last two decades, evidence suggests that businesses have been growing increasingly climate-conscious over recent years.
Commissioned by HSBC in 2019, the ‘Made for the Future’ report revealed that almost half of UK companies were planning to increase their environment-related spending by the summer of 2021.
So, why the sudden desire to go green?
Out of the 2,500 organisations surveyed by HSBC, 63% said they planned on updating buildings and equipment – hinting that a growing number of them recognise the operational benefits of taking a greener approach.
It’s often said that sustainability comes at a cost; that it doesn’t stimulate enough growth to be prioritised by businesses; but many continue to find that better conservation and use of energy results in a more streamlined operation and decreased costs.
In another survey, this time conducted by Barclays, one third of businesses reported lower business costs as a result of their green investments.
While implementing green infrastructure can be costly to begin with, the expense is often more than covered by the economic benefits.
Keeping up with competitors
One of the ways in which businesses can keep pace with their competitors is by retaining a loyal customer base; but this is becoming increasingly difficult to do for those with their heads in the sand with regards to sustainability.
According to research conducted by The Natural Marketing Institute, consumers are 58% more likely to buy a product or service when they know the business selling or providing it actually pays attention to its impact on society and the environment.
But not only do a large percentage of people prefer to buy from sustainable businesses, they would also be willing to pay 20% more for something which is environmentally friendly.
Millennials and Gen Zers, in particular, have grown up with increased awareness on this subject, and many of them expect companies to reflect their values and aspirations.
Research suggests that a business’ dedication to sustainability has an indirect effect on its net profits, with 75% of UK businesses surveyed by Barclays claiming to have benefited commercially after going green.
The eco credentials they attain by putting sustainability at the heart of what they do is also helping them to attract the best talent.
Growing numbers of employees want their employers to do the right thing by the planet. In 2020, Unily commissioned a survey of 2,000 UK office workers, 72% of whom stated that they were concerned about environmental ethics; and an astounding 83% of the multi-generational respondents felt that their workplaces were not doing enough to address climate change.
As sustainability and ethical practices become increasingly important for consumers and employees alike, businesses will need to adapt in order to stay ahead of their competitors, both in terms of recruitment and client-retention.
At the moment, all businesses – from offices and shops to those in sectors like agriculture and chemicals – have legal environmental obligations that they must meet; but it’s more important than ever that decision-makers prepare for stricter environmental legislation and increased energy costs.
In January 2020, the UN heralded the start of a “decade of action”, underpinning their sustainability objectives and setting the bar for member states. But the Coronavirus pandemic has provided governments around the world with a unique opportunity to accelerate measures.
For example, the UK recently announced a new greenhouse gas emissions reduction target of at least 68% by 2030 compared to 1990 levels. The previous target was a 53% reduction.
This, as well as the introduction of the UK Emissions Trading Scheme (ETS), could result in tighter regulations – an eventuality which businesses of all sectors and sizes need to prepare for.
Seizing the opportunity
From saving money through operational efficiency to retaining climate-conscious clients, there are numerous reasons why businesses across the UK are striving to become more sustainable.
But going green isn’t just good for business; it benefits employees, customers and the wider society – and should therefore be a priority for all of us.