New research has found that sustainability and other responsible business practices have great potential to deliver financial returns on investment (ROI).
Project ROI draws its conclusions from an analysis of over 300 studies and reports, supported by interviews with businesspeople and CSR practitioners.
It finds that the potential ROI stemming from doing business responsibly includes:
Being able to raise revenues by as much as 20%; being able to charge a price premium of up to 20%; being able avoid revenue losses of up to 7% of a firms market share; being able to reduce staff turnover by up to 50%; being able to increase staff productivity by up to 13%; and being able to increase employee engagement by up to 7.5%
In essence, what this report is telling us can be summed-up quite neatly in a single sentence: businesses that do good also do well.
The impact on sales and revenue
There is absolutely no doubt that in today’s highly connected world, consumers and businesses increasingly recognise the importance of conserving resources, reducing waste, saving energy and enhancing the natural world around us.
Moreover, this increased sustainability awareness is beginning to affect buying habits.
According to research commissioned by Social Enterprise UK and the Cabinet Office in 2014, consumers are now seeking out ethical brands, with 1 in 3 people surveyed saying they felt ashamed when buying from businesses perceived to be socially irresponsible.
Additionally, more and more businesses are starting to demand that their suppliers uphold high environmental, social and governance (ESG) standards too.
For companies that genuinely embrace responsible business values, these changes in buyer behaviour create a host of opportunities to boost competitiveness, increase profits and grow.
Recruiting and retaining top talent
Separate research reveals thatÂ people increasingly want to work for companies that are committed to sustainability and corporate social responsibility.
For instance, the US non-profit group Net Impact found that 53% of workers said â€œa job where I can make an impactâ€ was important to their happiness.Â Whatâ€™s more, 35% of respondents said they would take a 15% pay cut to work for a company committed to CSR, with 45% saying theyâ€™d take a 15% pay cut to work for a job that makes a social or environmental impact.
What all this is telling us is that people increasingly want to work for companies that have a purpose beyond profits.Â Project ROI even demonstrates how this can boost employee productivity.
Given how important it is to have the right people on your team, itâ€™s clear that being a good corporate citizen can help you find and keep the best talent.
Green light your growth
If youâ€™re not already embracing corporate social responsibility and sustainability principles in your business, now is the time to start.
See also: Embedding CSR
It is clear from the growing body of research and experience that doing so can significantly increase your chances of success, and that more and more business leaders are recognising this â€“ in fact, in a global survey of executives in 2009, 87% of respondents said that sustainability issues were very or somewhat important to future growth plans.
The adoption of responsible business practices shouldnâ€™t be limited only to large companies â€“ SMEs can and should also be incorporating sustainability and CSR strategies into their operations, and actually may even feel bigger benefits from doing so.
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