Sustainability as a key factor for the future of business

Over the past two years, sustainability has increasingly become a necessity for companies due to changing perspectives and requirements around the world. It is becoming even more critical for companies to address the gap between knowing and doing by embracing sustainable business practices. Sustainability can be defined as meeting present needs without compromising the needs of future generations to meet theirs, and there are three fundamental pillars: economic, environmental and social.
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Although 90% of leaders believe that sustainability is fundamental to the future of organizations, only 60% of companies have a defined sustainability strategy. Often, companies that talk about wanting to be more sustainable, with low levels of carbon emissions and a controlled carbon footprint, fail when it comes to implementation. One of the reasons for this is that boards of directors are not as committed to sustainability strategies as they initially assume.
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The truth is that currently, according to the Taxonomy Regulation as part of the so-called European Green Deal, companies in the banking sector are already obliged to present sustainability reports and evidence, and these obligations will not be restricted to this sector alone. This means that, in a short space of time, organizations that don't adapt to the business context by including technologies that can help companies "be more sustainable" will certainly not succeed.
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The world is currently facing the over-exploitation of resources and, according to McKinsey, having a sustainability strategy allows a company to look to the future through long-term investments. It is essential that business leaders become aware of the need to reduce, reuse and recycle, moving towards the circular economy - which is expected to reach 2.15 trillion euros by 2025.
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In this sense, I identify 3 reasons why Sustainability strategies will impact the future of business:
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1. A competitive advantage

Nowadays, organizations are increasingly exposed to society and to the demands of customers and potential customers and, in this sense, it is important to realize that the time for companies to be "neutral" to the social, political or economic context that surrounds them is over. Millenials are a case in point. A Nielsen survey shows that Millenials are twice as likely as Baby Boomers to say that they are changing their habits to reduce their environmental impact. Generation Z, meanwhile, is also becoming a generation concerned with the issue of sustainability.

This shows that brands can tremendously increase their business values by focusing on issues such as sustainability and reducing their carbon footprint, since today, more than ever, customers are looking to organizations that reflect their values and principles.  

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2. Increased efficiency

According to McKinsey, a sustainability strategy can substantially reduce costs - energy and water consumption - and affect operating profits by up to 60%. Implementing sustainable practices in business units can increase an organization's chances of profiting from that same sustainability. It is essential to be transparent about sustainable practices. For example, when Puma published data on water used and carbon emitted through its supply chain, it helped identify ways to reduce water, energy and fuel consumption by 60%. Being sustainable can also improve relations with the government and the local community as it leverages tax incentives and subsidies for companies.

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3. Attracting talent

At a time when there is talk of a shortage of qualified professionals, especially in the IT sector, being sustainable is the first step towards combating this weakness. Almost 40% of Millenials accept a job because of the company's sustainability and are even willing to take a pay cut to work for a company with a responsible environmental commitment. With Millenials becoming the largest workforce, not having a sustainability strategy could mean losing out on a lot of good talent. Being sustainable can also lead to employees being more motivated to work, as the value the company is generating is for the common good.

Source: Observer