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How companies benefit from sustainability

In a world increasingly characterized by extreme weather events, sustainability is one of the most important issues for companies. In addition to ethical responsibility, political guidelines such as the CSRD or the ESG criteria are pushing for corporate climate protection. The good news: Those who act holistically and honestly secure a clear competitive advantage.

The urgency for more sustainability in business also becomes clear with a view to society, as 89 percent of Germans would like companies to operate more sustainably and in a more environmentally friendly manner ¹. Sustainable action is therefore increasingly demanded by consumers, but also by other stakeholders.

Increased customer loyalty and positive corporate reputation

Companies that are committed to sustainability meet this requirement and thus promote the trust and loyalty of their customers. Because also specifically related to consumers, 71 percent consider climate change to be a serious problem. Around 90 percent of consumers would like to buy explicitly sustainable products ² and would even be prepared to pay more ³.

The positive impact on corporate reputation can be deduced from this, because corporate commitment to sustainability leads to a high degree of emotional brand loyalty ² and enhances the company's reputation: More than two-thirds of Germans have a more positive opinion of brands that are committed to sustainability ⁴. This, in turn, is crucial for success in the market. 89 percent of companies with sustainability standards benefit from sales- and marketing-related advantages ⁵.

Access to new markets and investors

With an enhanced corporate reputation comes easier access to new markets. Many countries and regions impose stricter environmental requirements, and companies that meet these requirements can expand in these markets. In addition, sustainable companies are often more attractive to investors because they are seen as more stable in the long term.

Increased employee satisfaction 

Sustainable companies often have committed and satisfied employees. This is because employees who experience their company's sustainability goals as challenging rate their employer better overall (81 percent) and are more involved in their commitment (67 percent) ⁶. Employees appreciate working for companies that share their values and are committed to positive change in the world. This is also shown in a study by StepStone, according to which three out of four employees would like to have a sustainable employer. Labor market expert Tobias Zimmermann even says that climate protection is one of the most important factors for the attractiveness of an employer ⁷. This becomes clear in the Königssteiger study, according to which for 83 percent the environmental awareness of the employer is even as important or more important than the company's success ⁸. The resulting advantage for companies: higher employee loyalty leads to lower staff turnover and increased productivity. 

Advantages in employer branding

In addition to the company as an employer, this naturally also has an impact on employer branding and the job market. More than 60 percent of Germans say that information on sustainability in job advertisements or on career pages is a particular incentive for them to apply for a job. More than half say that environmental protection and sustainable action is one of the three most important incentives when deciding for or against an employer ⁸. This makes employers who are committed to sustainability pioneers on the labor market and reach the best talent.

Profit through cost savings

Sustainable business also often means using resources more efficiently. Companies that reduce their energy and water consumption, minimize waste and optimize supply chains can achieve significant cost savings. These savings can add up to a significant financial advantage in the long term.

Risk mitigation

The global challenges related to the environment and social responsibility can also pose significant risks for companies. On the one hand, legislation relating to environmental and social issues is becoming stricter, so companies that fail to comply with these regulations face legal consequences. For another, a single incident of negative environmental impact can lead to a serious reputation problem and shake the confidence of customers and investors. This in turn leads to loss of sales or market share. Another issue is dependence on non-renewable resources, which makes companies vulnerable to price fluctuations and potential shortages. Through an ESG assessment, companies can test their vulnerability to such potential vulnerabilities and take countermeasures. Companies that act sustainably are better equipped to avoid or respond to risks. As a result, financial losses and reputational issues are avoided, and companies are more resilient.

It is therefore clear that holistic sustainability is not only an ethical obligation, but also a clear competitive advantage for companies. By building a positive reputation, saving costs, accessing new markets, being innovative, improving employee retention and mitigating risk, companies can benefit from sustainability in many ways. In a world where sustainability is becoming more than just a trend, companies should leverage these positive side effects to ensure long-term success.

With Planted, we support companies in the implementation of their individual and holistic sustainability strategy through to ESG reporting. Would you like to find out more? Book your no-obligation demo here.

Sources:

¹ Trend study: 89 percent of Germans want companies to be more sustainable - business-on.de 

² Sustainability - the turning point of marketing (markenartikel-magazin.de)

Greener business: Green IT may cost more (wiwo.de)

IAS study shows: Advertising in a sustainability context increases brand value, Integral Ad Science, Press release - PresseBox

isealalliance.org/sites/default/files/resource/2019-05/Summary - Business Benefits of Standards Report.pdf.

Sustainability activities promote identification and commitment (greatplacetowork.de)
So important is sustainability for employers - Stepstone - Fill vacancies with Stepstone

Whitepaper-Jobfactor-Climate.pdf (koenigsteiner.com)

Job search and climate protection: Sustainability worth a lot (merkur.de)‍

¹⁰ Innovating-for-a-sustainable-future (global.ntt)

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How-to: Sustainability in the company