If you’ve ever performed an act of kindness like picking up someone else’s litter or donating to a charity, you’ll have experienced that little rush of dopamine that comes with doing a good deed. “Giving back” is not only good for society but good for you as well. While individuals make a New Year’s Resolution to give back more, businesses can do so on a company-wide scale by making 2020 the year your organization takes meaningful action on supply chain sustainability.
Businesses have been talking the sustainability talk for some years now, but pressures to implement meaningful changes that transform the way businesses operate are mounting. The Sustainability Consortium’s Impact Report revealed over 60% of greenhouse gas emissions, 66% of tropical deforestation and 80% of global water use are a direct consequence of global supply chains.
Why is Sustainability Important?
The moral motivations for making sustainability a number one business priority are obvious – if we want to save the planet and reverse the impact of climate change, businesses cannot continue to operate as they have been doing. Between 2001 and 2018, climate researchers logged sixteen of the hottest years on record, natural disasters (including wildfires and flooding) are on the rise, and it’s predicted that the Arctic Ocean will be ice-free by the middle of this century.
Fortunately, companies today no longer need to choose between profit-making and do-gooding, because sustainability makes real business sense. In fact, it’s proven that green organizations grow faster than their non-eco-conscious counterparts. Here’s why:
- Customers care. Consumers today are far more sensitive to environmental issues, demanding green products that are produced and packaged using sustainable methods. Millennials and Gen Z are particularly eager to support sustainable brands with 73% and 72% respectively willing to splash extra cash on sustainable products. If your business isn’t operating sustainably, customers will vote with their wallets. On the other hand, being a champion of environmental responsibility is great for brand awareness and reputation.
- It saves money. Fossil fuels are becoming more expensive, scarcer and more contentious year on year. Renewable energy sources, such as solar and wind energy, could reduce costs because they require far less maintenance. Sustainability initiatives such as waste reduction schemes in manufacturing can drastically improve efficiency, product quality, and benefit the organization’s bottom line.
Boards and CEOs are also increasingly aware that companies like JP Morgan publish Environment, Sustainability, and Governance (ESG) ratings, which impact stock prices.
- Employee satisfaction. Businesses focused on sustainability are more likely to hire and retain top talent. A LinkedIn survey found that almost 75% of job-seekers want to work for companies where they feel their work matters. Studies have also found that employees are happier, more motivated and more productive in workplaces with leading sustainability programs.
- It helps manage and mitigate risk. Disruptive technologies and natural disasters are making business today unpredictable and uncertain. Focussing on driving efficiency and profit at all costs doesn’t best equip leaders to manage and mitigate risk. Sustainability initiatives are, by definition, long-term initiatives, which can better equip companies to deal with problems as they arise and adapt to the shifting landscape.
How to Make Your Business More Sustainable
Companies must evaluate their production, shipping, and waste management processes, considering how these impact both the environment and the communities in which they operate. Optimizing business operations, for example, will significantly reduce the use of resources and waste. For manufacturing companies, this means fewer defects, better product quality, greater efficiency, and fewer project delays.
Sustainable shipping requires manufacturers to collaborate with local suppliers and companies, which also provides employment opportunities for the local community.
Revaluating how products and parts are packaged, and investing in reusable packaging, will reduce waste and save money.
Recently, there has been an uptick in green architecture, with the global green building materials market size expected to grow to $364 billion by 2022. Features including green roofing, sustainable wood, low-water bathrooms, and recycled rainwater can help conserve energy, lengthen a building’s lifetime and contribute to the local community.
How to Implement Sustainability Measures at Your Industrial Business
Making real, lasting change in your organization will require buy-in from employees, stakeholders, suppliers, and the local community. It takes ambition, effective communication, and patience, which means big changes won’t happen overnight. Here are some important tips to keep in mind.
- Utilize new Technology: Tech could be a major enabler in driving supply chain sustainability with big data accurately predicting demand, 3D printing reducing transportation costs, and machine learning reducing empty truckloads. Over 80% of manufacturing executives are actively investing in tech for sustainability reasons.
- Think in the long-term: Prioritizing short-term needs over long-term sustainability strategy won’t save your company money in the long run. The value created and risk reduced are a worthy reward for long-term investments.
- See the bigger picture: Companies shouldn’t implement major changes without considering all sustainability factors including environmental, economic, and societal impacts.
- Harness the power of the crowd: No single organization has all the sustainability answers. Many companies are opting to partner with environmental NGOs who can provide expertise and talent that would otherwise be inaccessible.
- Be positive: Employees won’t respond well to negative communication about how terrible their company’s sustainability efforts are. Hopelessness and guilt don’t drive action, whereas positive messages about the impact individuals can make, do.
- Be formal: Companies who want to see real change will need to formalize their approach to sustainability, outlining and clearly communicating goals, priorities, and strategies across the entire company.
Finally, keep in mind that an employee who has made a genuine commitment to “give back” more to society may struggle with the fact that they work for a company with a poor environmental or social record. Sustainability is good for the planet, good for business, good for employee retention, and is, therefore, a worthwhile project to tackle in 2020.