Climate change is one of the biggest threats of our time. Fossil fuels and poor waste management have led to the degradation of ecosystems around the world. It is the responsibility of businesses today to be mindful of how their actions affect people and the environment, but there are still those who haven’t adopted a sustainability strategy. In this blog, we’ll be going over five benefits of sustainable business practices in 2022.
Improving risk management
For businesses that have global supply chains, the climate change crisis poses many threats to their operations. Climate change increases the risk of natural disasters that can damage assets, slow down production, or displace employees. One source reports that in 2021, the overall economic losses from natural disasters worldwide was $280 million US dollars. Climate change has also led to water scarcity, drought, wildfires, and land degradation. In a study on climate change conducted with 8,000 supplier companies, 72% of respondents said that climate change posed a risk to their operations, revenue, and expenditures.
As we can see, climate change can do more harm to businesses than they may realize. If businesses adopt sustainable practices, then these risks can be mitigated or reversed.
Fostering innovation
When businesses try to adopt sustainable practices, it actually pushes them to be innovative. Sustainability can help businesses come up with new products and other ways of operating. For example, Nike created the Flyknit line, which used a yarn system that required little labor and reduced waste by 80% compared to other footwear.
Another innovation that was brought about by the pandemic was remote work. In one of our previous articles, we talked about how this innovation has improved worker productivity. We encourage you to check it out!
Improving financial performance
A common misconception is that sustainable business practices are expensive, but in reality, they can bring costs down. Think of it this way: by managing resources better and conserving resources like water and energy, operational efficiency increases and costs go down. For example, Walmart invested in better routing, truck loading, technology, and training between 2005 and 2015. As a result, they improved fuel efficiency by 87% in 2015.
Building customer loyalty
Moving towards sustainable business practices can improve brand perception and increase customer loyalty. If asked, most consumers would buy a product if they knew it was made sustainably. In fact, nearly two-thirds of consumers worldwide have said they feel a sense of responsibility to buy eco-friendly products. By adopting sustainable business practices, businesses today can experience more respect and brand loyalty from these consumers.
Increase employee retention and recruitment
Employees of today care about doing the right thing, and so they look for businesses that care about the environment and stopping climate change as much as they do. Businesses who adopt sustainable practices can increase employee morale and loyalty, as well as attract top quality talent.
Conclusion
Climate change is a serious issue, but by adopting sustainable business practices, businesses today can lessen this threat and create a better world for all to live in. For more information on climate change, visit the NASA website to learn more: https://climate.nasa.gov/
