5 Ways to Make Sustainability Work for Your Business

It’s more important than ever for companies to get serious about sustainability. However, while 64% of leaders say that a transition to environmentally friendly practices is on their C-suite agenda, real, tangible action is hard to see.

One key barrier to companies following through on net-zero ambitions is the perception that they’re too expensive. According to new research by Capgemini, more than half of executives believe that the costs of pursuing sustainability outweigh any potential benefits to their company’s bottom line. The research shows that only 21% of executives clearly understand the business case for sustainability, which explains the global lack of motivation for launching green initiatives and redesigning operating models.

To fight climate change, leaders must change their mindset

For corporate leaders to fully embrace transformation and effect real change, they must learn to spot the unique business opportunities offered by going green. While a sustainability transition may incur initial costs, the long-term benefits are not just for the planet. Capgemini’s study found that companies with mature sustainability practices saw 83% higher revenue generated per employee than the average from 2020 to 2021. Meanwhile, for sustainability “beginners”, the revenue per employee during the same time period was 13% less than the average.

Some organizations are getting ahead by investing in technologies such as artificial intelligence (AI) and the Internet of Things (IoT) to reduce their carbon footprint, but these initiatives are often implemented in silos, with little collaboration between functions. To have an impact, both digital transformation and sustainable transformation must be strategic and companywide. This is only possible if decision makers understand how sustainable practices can help the entire business.

The business case for sustainability: 5 key drivers

To drive real action, leaders must communicate the business benefits of sustainability and encourage collaboration across functions. But it all begins with seeing the specific ways in which the business can benefit from being sustainable.

1. Become resilient

Implementing thoughtful adjustments can help companies avoid scrambling to comply with regulatory changes while also staying aligned with consumer values. Governments are increasingly demanding that businesses reduce emissions to operate within their borders, and consumers are making purchase decisions based on a company’s environmental impact. Accelerating sustainability now will enable companies to be ahead of the curve, rather than force them to chase competitors.

Sustainable design and manufacturing should be a primary focus to become resilient. This includes designing products for durability, repairability, recyclability and the sharing economy (such as ride sharing or coworking), which is still not the norm. While 23% of executives say they’ve seen costs decrease due to the adoption of sustainable design practices, less than half of organizations are currently redesigning products and design processes to be more sustainable.

2. Retain talent

Just as consumers look for sustainability, so do workers. Companies committed to sustainability have the edge when trying to attract and retain top talent, who increasingly want to work at a sustainable organization. Employees who care about sustainability and embrace green solutions can also accelerate a company’s transition.

In Capgemini’s study, among motivating factors for adopting environmental sustainability initiatives, “To align with the demands of employees and potential employees” ranked second, just behind “Sustaining the planet for future generations”. To match their motivation with action, leaders should identify knowledge gaps and upskill their workforce, while embracing remote working and new technologies. For example, using virtual reality (VR) can make remote training sessions more engaging.

3. Expand market share

Because consumers are increasingly making purchase decisions based on a company’s environmental impact, sustainable practices can carve out new opportunities. Even when an initial investment may seem costly, it can pay off in the long run: 51% of organizations that reported an increase in costs due to sustainable design said that it had been outweighed by benefits such as increased market share.

Companies should seek emerging areas where they know they can make the most impact. A particularly fruitful route can be found in the bioeconomy, which refers to employing biological resources, processes, and methods to sustainably produce goods and services. A strong bioeconomy approach that respects biodiversity can improve sustainable sourcing while addressing some of the most pressing challenges caused by climate change.

4. Increase efficiency and cut costs

Many sustainable solutions offer cost, time and employee efficiencies. Process redesign, greener waste management, better water stewardship and development of the principles of the circular economy are all measures that can benefit an organization’s profitability.

Looking at organizations that have reached sustainability maturity, it’s clear that new technologies and robust data are imperative to driving efficiencies. For example, among companies furthest along in their sustainability transformation, 65% have implemented smart systems to monitor and reduce energy consumption. In this group, 72% encourage employees to work from home, reducing operating costs as well as emissions.

5. Secure returns

Impact investing is an excellent way to diversify a company’s portfolio. It uses environmental, social and governance (ESG) metrics to identify growth opportunities, and can simply mean backing companies that have solid ESG strategies. “Green investment”, meanwhile, is set to be one of the most disruptive investment trends in the next two to three years, encompassing green bonds, companies with outstanding sustainability initiatives and more.

The hardest part of investing in a new industry is understanding the sector well enough to make prudent decisions. Luckily, AI advancements enable financial advisory services to provide accurate automated analyses that consider a wide array of factors, even filtering out companies engaged in greenwashing. This is yet another reason companies should stay on top of their non-financial metrics.

An outlook for the planet

Framing sustainable choices as opportunities can clarify which approaches are most suitable for a given organization and enable its leadership to make a persuasive case for sustainability—which, ultimately, is about continuing successfully as conditions change. Business-driven sustainability is the natural and essential course forward for companies and our planet.

This article concludes a series by Capgemini exploring the role of data, people and systems in building a sustainable future. Visit Capgemini’s website to download the full report, “A World in Balance: Why sustainability ambition is not translating to action”, and its related Executive Digest to access more insights, research and solutions."