Sustainability is a business imperative: Embrace it or fall behind

Michael Worth
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For business owners, leaders and decision-makers, it's time to step up on sustainability - or risk falling behind your competitors. In an increasingly cutthroat economic environment, businesses with strong sustainability credentials win contracts and customers. Sustainability is no longer an optional extra or a warm fuzzy for picky consumers. It's a business imperative.

‘Is your organisation implementing sustainable or environmentally friendly business practices?’ We asked that question in our latest Grant Thornton biannual survey – and an encouraging 79% of respondents are taking action. However, most were starting with the easy wins. That’s understandable. It can be hard to keep up with all the ways in which businesses can tackle sustainability as they continue to advance way beyond reducing travel and recycling, and they require an investment of our time and money - both of which are scarce in tough economic times. 

However, if you’re not tackling sustainability to truly future proof your organisation against the challenges of climate change you’re falling behind. 

Low hanging fruit can save your business money

More than half (57%) of survey respondents selected ‘reduction of energy consumption’ as one of their sustainability actions. Another 49% said they were reducing travel-based emissions. Using less energy is an absolute no-brainer, because you’ll save money at a time when energy costs are high and rising. Swap to LEDs, turn everything completely off at night, have more online meetings – once you set yourself up for lower energy use, the savings pile up automatically every month.

Encouragingly, 37% of respondents were reusing materials in their products or services. This is another cost-saver, as is use optimisation (such as using sharing platforms and second-hand goods) which is being implemented by 16% of respondents.

These are easy wins that can be implemented by almost any type of business. Money saved by these tweaks can be invested into next-level sustainability actions. 

It's the perfect time to re-engineer for the future 

To secure a long-term future for your company, you might need to re-engineer it with deep sustainability in mind. We're living in a period of turmoil and disruption, in every aspect of our lives. What better time than now to think about making wholesale changes all the way up the value cascade?

Ask yourself how you can step up to a future-proof sustainable business:

  • Can you extend the life of your product or switch to product-as-a-service?
  • Can you use recycled resources in your products?
  • Can your service business become emissions neutral or negative?
  • Could you install smarter energy technology or be part of more local energy generation and sharing?
  • Can you transition all your ICE vehicles for EVs?
  • Can you move logistics to rail and coastal shipping?
  • Can you reduce waste throughout your business?

Funding is available – even for small businesses

The cost of investing in sustainability can be a barrier, particularly when business confidence is low. There is funding available for sustainability projects, and while it's been on offer for big businesses for several years, there are several products now aimed at small businesses.

You no longer need to be turning over tens of millions to get funding. All the major banks are offering sustainability-linked loans for small business, which will lend money for projects like installing solar panels, buying EVs, or planting native trees. 

If you have a plan to make your business more sustainable, take it to your bank and get the funds you need to make it happen. And for bigger sustainability projects, like swapping a fossil fuel boiler for an electric one, you may be able to access Government or local council funding. 

Public sector spending is driving the shift toward sustainability

Businesses providing services to the Government or other parts of the public sector will already be thinking hard about sustainability. A few years ago this category had a small weighting in most RFPs, but that weighting has increased to become a pretty big chunk.

Construction companies, for instance, know they simply can’t win tenders without strong sustainability credentials in place. And simply ticking boxes isn’t enough - they need to be able to tell the story of how they’re positioning their business for long-term sustainability. You can no longer get away with ‘We bought some forestry offsets last week when we saw the RFP come through’. It’s demonstrating an understanding of the risks and issues throughout the supply chain and taking steps to address them wherever possible. 

This kind of thinking has become business as usual in the construction sector. If they stopped thinking about sustainability, they wouldn’t win any contracts, and they would soon lose out on business to another company that was prepared to make the effort. Standing still doesn’t cut the mustard either, because procurers expect continual improvement, so the standard keeps rising. It’s the Red Queen effect: ‘We must run as fast as we can, just to stay in place. And if you wish to go anywhere, you must run twice as fast as that.’

A perfect point between urgency and innovation

Here in Aotearoa New Zealand, we’re extremely fortunate. We can drive an energy transition and become much more self-sufficient in energy. We can also tap into some incredible energy innovations which will help us speed up this transition. For example battery technology, and other storage solutions to manage more intermittent energy generation are rapidly accelerating and will be a gamechanger for Kiwi businesses and households.

Despite all the bad news in the world, I believe it is actually a good time to be alive and to run a business. We have both the awareness of how urgent the situation is, and know we have a small window of time to react to the environmental crisis before it’s too late. The decision is clear: we can’t procrastinate any more. This is the perfect time to achieve an energy and materials transition at a national level to create the bio-driven, circular economy our mokopuna will need. It’s also the perfect time to play your part, by positioning your business to survive and thrive in a new zero-emissions future.