What does sustainability mean to you and your business?

Why should a business become more sustainable?

Why should a business become more sustainable? There’s no “one-size-fits-all” answer. For some entrepreneurs, sustainability is about managing risks. Governments are passing stricter regulations to limit adverse environmental, social, and governance effects from business. The cost of non-compliance is on the rise, with the US Environmental Protection Agency collecting around USD 470mn in penalties and fines in 2019. ¹

But is there a bigger opportunity for business owners? A growing number are building sustainable business plans that go well beyond risk management. They’re putting social and environmental outcomes—including positive impacts on people and the planet—at the core of what they do and how they work.

Why is sustainability in business becoming a “want-to-do” strategy? The answer lies in the swelling commercial opportunities. Did you know that 66% of consumers—and 73% of millennials—would pay a price premium for a sustainable product? And that companies with a proven commitment to sustainability grew sales four times faster than non-sustainable peers? ²

Explore our latest research to find out more about how entrepreneurs can define sustainable business practices. Learn why private business owners are becoming more sustainable and uncover their biggest barriers to success. And contact us for more information on how to start your journey.

¹ US Environmental Protection Agency “EPA Announces 2019 Annual Environmental Enforcement Results,” 13 February 2020, accessed 16 October 2020. URL: https://www.epa.gov/newsreleases/epa-announces-2019-annual-environmental-enforcement-results.

² The Future of Humans, UBS Chief Investment Office GWM, September 2020.

What sustainability factors influence your profits most?

You’ve established why your business needs or wants to become more sustainable. But which environmental, social, or governance issues should you tackle? It might not be enough to focus on the sustainability issues closest to your heart if those topics aren’t topical for your business’s profits and purpose.

Commercial success depends on finding the sustainability issues that matter most to your business—its operations, its costs, and of course its profits. The COVID-19 pandemic has pushed social topics like education, health, and inequality higher up on the agenda. But entrepreneurs may focus first on the “material” sustainability issues that move the profit needle the most.

Take a deeper dive into our research for more details on how to look at your existing business through a “sustainability lens.” Learn how business networks and peers can help you narrow down the sustainability issues to address in your business. And sign up to take a look at how UBS CIO has adapted its sustainability data methodology to help you identify the sustainability issues that matter most for your business.

How can you measure corporate sustainability?

When you decide which sustainability factors you want to focus on, you’ll likely face the thorny question of how to measure your impact on the financials…and society at large. It’s true that small and mid-sized firms have hurdles to overcome, with a lack of common standards serving as one such obstacle. A small-scale study of 14 small and mid-sized manufacturing companies in Germany found there was a lack of consistency in their sustainability reporting. They used as many as 671 different sustainability indicators between them, and large variation in the indicators made it impossible for stakeholders to compare sustainability performance across firms. ³

When you add in the shifting sustainability demands of your different stakeholders and the difficulties in collecting data from across your supply chain, the temptation to skip sustainability and impact measurement can be overwhelming. But measuring your firm’s sustainability and impact does not have to be complicated or expensive. It doesn’t even have to require external help to begin. That said, measurement does require careful thought and planning.

Check out CIO’s latest research to learn how your employees, investors, and customers can contribute to measuring sustainability and impact. Find out why organizations like B Lab think measurement can only feed into your business success. And register if you’d like to start a conversation about sustainability and your business.

³ E.Steinhoefel, M.Galeitzke, H.Kohl, R.Orth (2019) “Sustainability Reporting in German Manufacturing SMEs” Procedia Manufacturing (33), pp.610-617. URL: https://doi.org/10.1016/j.promfg.2019.04.076, Creative Commons license.