Corporate sustainability has been a global trend for quite some time, but in terms of environmental sustainability, much of the focus has been on relatively simple interventions such as recycling, saving water and electricity, and carbon offsetting.

While essential, businesses will have to go further and do more to strengthen their responsible business credentials, especially now that customers and clients are taking a closer look at business practices and ethics in the wake of Covid-19. How a company handles these four areas are increasingly put in the spotlight.

Scrutinise your supply chains 

To call your business truly sustainable, you will have to ensure your suppliers adhere to the same environmental and social principles. Internally, you and your team may do the right thing to avoid, eliminate and fight environmental degradation, but what good does that do if your suppliers don’t? According to one McKinsey report, 90% of companies’ environmental impact comes from their supply chains.

Cleaning up your supply chains will likely result in financial benefits: various reports have identified a positive correlation between more sustainable business operations and higher profits. Today’s customers, especially millennials, prefer responsible brands and products, and are willing to pay more for them, too.

Invest responsibly

Being a responsible company should trickle down to everything you do, including your investment strategy. Would you be comfortable calling your business sustainable if you know it invests heavily in polluters and entities that contribute to climate change?

Speaking about responsible investment: this is no longer a niche sector. According to Bloomberg Intelligence’s Head of ESG and Thematic Investing (EMEA), global ESG assets are expected to exceed $53 million by 2025. It will therefore make up more than a third of total assets under management, which is expected to be $140.5 trillion four years from now.

This makes sense as investors are increasingly discovering that ‘green investments’ do not offer lower returns. Jon Duncan, Head of Responsible Investment at Old Mutual, puts it in no uncertain terms: ‘The data is showing that that’s not necessarily true.’

Listen to your customers

Your most important asset, besides your staff, is your customers. Their sustainability concerns should be considered if you are serious about improving your environmental performance, which includes your business’s performance. A 2020 study by IBM suggests that nearly eight in 10 respondents consider sustainability important, and 70% of those who said it is very to extremely important to them indicated they would pay a premium of 35% for sustainable and responsible brands.

Younger consumers are driving this trend, and 81% of millennial consumers expect companies to make a public commitment to good corporate citizenship, including sustainability. Almost three-quarters (73%) are willing to pay extra for sustainable offerings.

Admit, don’t spin, your mistakes

Everyone makes mistakes, and businesses are not exempt from this. Instead of hiring spin doctors and shifting the blame, it is better (and cheaper) to own your mistakes, show genuine remorse, and take tangible action to prevent similar issues in the future. This shows your customers you care, keeps them on your side, and saves your business reputation. ‘When leaders admit to making mistakes, they create an opportunity to earn respect, strengthen their teams and lead by example,’ Forbes wrote in 2015 already. ‘It ultimately builds a culture of trust.’

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