Why is Environmental Sustainability Important in Business?

by Contributing Author

IBM surveyed 10 major economies, and according to the results, 51% of respondents believe that environmental sustainability is more significant than it was a year ago. This shift towards sustainability has presented a challenge to business leaders who must balance the interests of their companies with those of society and the environment. 

Why is Environmental Sustainability Important?

Environmental sustainability is critical because it ensures that the natural resources and ecosystems we depend on for survival are protected, preserved, and regenerated for future generations. There are numerous examples of why environmental sustainability is critical, some of which include:

• Climate Change
  Climate change is an urgent global problem that can have catastrophic consequences for the planet and its inhabitants. To minimize the impact of climate change, it is critical to prioritize environmental sustainability by reducing greenhouse gas emissions, using renewable energy sources, and promoting sustainable practices.
  
• Biodiversity
  The term biodiversity refers to the wide range of life forms on our planet, including plants, animals, and microorganisms. To protect and preserve biodiversity, it is important to prioritize environmental sustainability by preventing the destruction of ecosystems and promoting the sustainable use of natural resources.

• Natural resources
  Water, air, and soil are important natural resources necessary for the survival of all living organisms. To conserve and protect these resources, it is important to prioritize environmental sustainability by avoiding their depletion, pollution, and overexploitation and ensuring their sustainable use to facilitate natural regeneration.

• Human health
  Promoting human health is an essential aspect of environmental sustainability, which is achieved by minimizing exposure to pollutants, preventing environmentally related diseases, and ensuring the safety of food and water sources.

• Economic growth
  Promoting environmental sustainability can drive economic growth by creating new markets, job opportunities, and prospects in the green economy. In addition, by adopting sustainable practices, businesses can save money by curbing waste, reducing energy consumption, and optimizing resource use.

Top 5 Reasons Why Sustainability is Important in Business

Environmental sustainability is important in business for several reasons, including:

1. Regulatory Compliance
   Environmental sustainability has become a legal requirement in many countries. Companies that fail to comply face penalties that can lead to financial losses and a damaged reputation.
   In 2015, Volkswagen was found to have cheated on emissions tests for its diesel engines, leading to a scandal that resulted in billions of dollars in fines and legal fees and a significant decline in the company’s reputation.
2. Cost Savings
   Adopting sustainable practices can help companies save money by reducing waste, minimizing energy consumption, and optimizing the use of natural resources.
   Walmart, a leading retailer, has implemented a number of sustainable practices, including reducing waste, optimizing logistics, and investing in renewable energy. These efforts have helped the company save on energy costs and improve its reputation among environmentally conscious customers.
3. Brand Image
   Consumers are increasingly aware of the environmental impact of the products and services they consume. Companies that embrace environmental sustainability can improve their brand image and reputation.
   Tesla, an electric vehicle and clean energy company, has become synonymous with environmental sustainability and has built a strong brand through its commitment to reducing carbon emissions. The company’s innovative products and sustainable practices have helped it earn a loyal customer base and a positive reputation.
4. Competitive Advantage
   Environmental sustainability can give companies a competitive advantage in the marketplace by setting them apart from the competition and attracting environmentally conscious customers.
   Seventh Generation, a household cleaning and personal care products company, has built its brand on environmental sustainability and social responsibility. The company’s commitment to using plant-based ingredients and reducing waste has helped it attract environmentally conscious consumers who prefer sustainable products.
5. Risk Management
   Businesses face risks associated with environmental factors such as climate change, resource depletion, and pollution. Adopting sustainable practices can mitigate these risks and ensure the company’s long-term success.
   IKEA has set itself the goal of becoming a circular and climate-positive company by 2030. To achieve this, IKEA has invested in renewable energy, sustainable materials, and responsible sourcing. IKEA also offers a take-back program for used furniture and is experimenting with furniture rentals.

Companies around the world are striving to rely entirely on renewable energy sources for their operations. A number of companies have systematically invested in manufacturing technologies to streamline operations and make the transition to sustainable production and long-term growth. 

Retail stores and supermarkets not only emphasize the production and marketing of “green” products, but also use environmentally friendly materials and packaging instead of nylon and disposable plastic. Some retailers use AI-based solutions for recycling that help them to increase brand loyalty and engage more customers.

Conclusion  

Incorporating environmental sustainability into business practices is critical not only for protecting the planet, but also for the business’s own benefit. It can lead to increased profitability, brand reputation and employee engagement.