Submitted by: Sam Upton September 18, 2020
For many businesses, there has never been a more uncertain time than now. Aside from fears over the Covid fallout and possible second spike, there’s the spectre of a Brexit no-deal to contend with. Companies are having to examine every single aspect of their business to maximise efficiency and boost their bottom line.
One of the ways a company can become stronger and better prepared for the future is through sustainability. Long thought of as a box-tick exercise or sideline CSR initiative, sustainability is now regarded as important as marketing or branding. Companies now understand that their sustainability values and practices define them as a business, and ultimate success can depend on how seriously you take them.
Sustainability is an investment, not a cost
The importance of sustainability in business has been laid out in a survey by Smurfit Kappa. Working with the Financial Times, the global packaging company has found that consumers are continuing to drive companies to have clear sustainability practices and values, with the majority of businesses regarding environmental responsibility as an investment rather than a cost.
The Balancing Sustainability and Profitability Survey interviewed 200 senior executives and 1,500 consumers across the UK and found that 61% of consumers expect the brands they buy from to have clear sustainability practices. The research also found that businesses are taking sustainability seriously, with 82% of executives treating sustainability as a long-term investment, 72% of businesses seeing sustainability as a lasting trend, and 83% describing sustainability as an opportunity to be exploited.
As an example, furniture giant IKEA already base 60% of their range on renewable materials, with 10% containing recycled materials. By 2030, the company is aiming for its range to be 100% renewable and recycled. IKEA isn’t the only company to be moving towards increased sustainability: according to the Smurfit Kappa report, 86% of businesses are also investing in using recycled materials in their products and packaging.
Sustainability has the power to boost innovation
The increased investment in sustainability is driven by a number of factors, the largest of which are an improvement in efficiency and a reduction in waste – two of the largest influences on a company’s sustainability strategy, with 49% of respondents citing these two factors. Close behind is climate change concerns (41%) and cost savings (35%), which is the most anticipated benefit of a company’s sustainability practices (46%).
One of the more interesting outcomes of increased sustainability is a company’s ability to boost innovation and discover new revenue streams. Upon launching their Zero Irresponsible Drinking initiative, Carlsberg discovered that offering their customers alcohol-free beer opened up a new opportunity to tap into lunchtime drink sales.
“That’s one of the things that can come out of having a global corporate sustainability target,” explains Simon Boas Hoffmeyer, Senior Director, Group Sustainability & Communications at Carlsberg Group. “You unleash inventiveness and give your innovators, brand marketers, and supply-chain colleagues license to step out of the status quo.”
Time is ticking
While innovation and new opportunities are welcome boosts to business, ultimately it’s a company’s effect on the environment that will have the biggest impact on climate change. Whether the reason is profitability or consumer pressure, all businesses need to make a significant investment of time and money into their sustainability practices if real change is to be made.
“Globally we have faced one of the biggest challenges to our health and livelihoods in recent months,” said Tony Smurfit, Group Chief Executive of Smurfit Kappa. “But climate change and sustainability will remain the existential challenge of our time. People are realising that time is running out to address the issue. Sustainability must remain at the heart of the global business agenda as we look to the future.
• To read the full Smurfit Kappa report, go to www.smurfitkappa.com/uk/sustainability-survey