Tanja Hildebrandt – 8. February 2024
Business, Re.Frame
Our planet and our current economic system are facing enormous challenges: Global warming, resource scarcity and the lack of qualified employees make it clear that we urgently need a change towards a sustainable economy. This puts businesses under tremendous financial and personnel pressure and presents them with major challenges. In this article, you can find out why the path to transformation is worthwhile for every business, especially in economic terms.
The times when it was all about maximizing profits for businesses are over. Consumers today demand radical transparency from the brands and companies they buy from. Whether in the fashion, food or consumer goods industry: around 73% of consumers believe that companies have a responsibility to act for the good of our planet (source: HAVAS, meaningful brands report 2022). Sustainability is therefore no longer a marginal phenomenon and businesses have a responsibility to think, design and implement products and services more sustainably – on all three levels of sustainability: ecological, social and economic. Integrating sustainable development into the business brings a number of (economic) advantages:
1. Resilience:
Pandemic, energy crisis, changing climate conditions – resilience is the word of the 21st century to prepare businesses for major challenges. Resilience includes aspects such as flexibility, long-term strategic orientation and a focus on innovation. On average, resilient businesses were able to cope with the challenges of the pandemic three times better than non-resilient businesses (source: Building The Resilient Organization – Deloitte Global Resilience Report 2021 by Deloitte). In concrete terms, resilience means being adaptable and flexible, promoting teamwork and collaboration and, above all, creating trust and taking responsibility beyond pure profit. Resilience is therefore a decisive competitive factor nowadays.
2. Customer loyalty:
These days, customers are no longer satisfied with the role of passive consumers; they demand absolute transparency. Around 26% of consumers between the ages of 16 and 29 have boycotted brands, if these companies are associated with greenwashing or lack transparency. The trend is clearly rising (source: “Sustainable Consumption 2021“ study by Statista). Businesses that do not integrate sustainability into their own corporate DNA run the risk of losing customers and therefore market share. The Green Claims Directive adopted in 2024 also creates the necessary legal framework for this: it obliges businesses to communicate the impact of their products and services in a transparent and scientifically sound manner. This enables customers to make a conscious and informed purchasing decision, while at the same time transparency builds trust and loyalty on the part of the customer.
3. Greater efficiency:
Sustainable companies are generally also more efficient. The use of renewable energies, recycling and waste avoidance can save enormous costs. Above all, however, the social aspect of sustainable development can play an incredible role: a good work-life balance for employees ensures greater satisfaction and fewer absences due to illness in the workforce. Those who trust their employees and communicate with them openly and respectfully increase the efficiency of their own business, because employees are a business’s most valuable resource.
4. Lower financial risk:
Businesses that do not address sustainability can be exposed to higher financial risks. Around half of all investors are increasingly looking at sustainable development efforts and using them as a basis for investment decisions (source: PwC Global Investor ESG Survey). In addition, environmental damage or breaches of labor standards can also lead to civil penalties for companies under the European Green Deal.
5. Attractiveness for employees:
Employees are placing more and more value on sustainability in the workplace, as illustrated by the study conducted by Great Place to Work in collaboration with the Centre on Sustainable Consumption and Production (CSCP). Unfortunately, only 32% of respondents feel that they receive a great deal of support from their own company when they want to drive sustainability efforts forward. In order to increase their own attractiveness as an employer, businesses should place sustainability at the center of their strategy. Social sustainability is also a major factor here: flexible working time models, fair pay, appreciation and open communication. This makes a company attractive to specialists and new employees. Satisfied employees see themselves as an active part of the company, they feel connected to it and naturally communicate this to the outside world.
6. Good reputation:
Social sustainability in the business and the associated good working atmosphere and satisfied employees have a further advantage: employees will speak positively about the business and this generates unpaid advertising. Customers also keep a brand in mind if they can identify with its values and know they can trust the brand.
7. Responsibility for society:
Businesses have a responsibility to society and the environment. Integrating sustainability into the business can help to solve social and environmental problems and thus enhance its social standing. According to the Edelman Trust Barometer 2019, 67% of clients want CEOs to take the lead on change, not wait for the government to enforce it.
All in all, it is clear that sustainability not only benefits businesses ecologically and socially, but also offers enormous economic advantages. Businesses that fail to adapt to this trend reversal will jeopardize their competitiveness in the long term. Many of the approaches to greater sustainability have their origins in the business core and in the way products and services are designed and communicated to the outside world. With a value-driven strategy and sustainable and well thought-out design, we can find creative, environmentally friendly, socially acceptable and economically successful solutions. Here, creatives are valuable stakeholders on the path to transformation.
Is your business ready for more resilience to successfully face future challenges? At Re.Frame Studio, we position and design your company or brand sustainably. Book your 30-minute get-to-know-each-other meeting with us now.
