The United Nations has defined 16 areas for sustainable development – each with specific goals we as a planet should work towards within 2030. This is a library of ideas for how we can make sustainability our business – in business. Climate change is a major challenge, but we cannot forget other areas of development. We need to build communities supporting the people who live in them. We need to strengthen human rights, and allow everyone to reach their full potential irrespective of who they are or where they come from. We need to make sure we do not destroy the habitats of animals and plants – whether on land or under water. Politicians have shown that they cannot solve these problems by legislation alone – consumers and businesses share a big responsibility for moving the world towards a more sustainable future.
To read more about the sustainable development goals, visit the UN SDG webpage: http://www.un.org/sustainabledevelopment/sustainable-development-goals/.
Bizplan.one is all about building sutainability into businessm models, and we have defined 3 overarching sustainability topics:
- Environmental protection and sustainability
- Human rights development
- Strengthening our democracies
The UN sustainability goals all fit within these 3 areas of development, and can serve as an inspiration for a business attempting to analyze its impact, and how it can contribute to a positive development.
Consumers or B2B buyers – do they care?
According to a study done by Unilever in 2016 (press release), about 1/3 of consumers choose to buy from brands based on their social and environmental impact. It is estimated that more than a Trillion US dollars of value can be unlocked by clarifying sustainability credentials and actually living up to promises.
This was focused on consumer behavior. How about B2B buyers – are they starting to value sustainability as well? According to McKinsey, this is in fact the case. Businesses have for a long time included sustainability in their communication about values, but in many cases this has been mostly a reputation management issue. Current surveys, however, indicate that businesses are starting to take sustainability management seriously, seeing it as a strategic strength as well as a core social responsibility. You can read more about the McKinsey study here: http://www.mckinsey.com/business-functions/sustainability-and-resource-productivity/our-insights/the-business-of-sustainability-mckinsey-global-survey-results. One of the most interesting aspects of the McKinsey study is their comparison of sustainability based value creation across business sectors. The key sustainable practices expected to create value for the firms also vary across sectors. For example, the top sectors for each of these strategic choices show the different priorities and expected impact areas:
- Committing R&D Resources to sustainable products: energy, high-tech & telecom, manufacturing
- Improving employee retention due to increased motivation from a sustainable strategy: finance, healthcare
- Reducing energy consumption in operations: extractive services (oil & gas, mining, etc.), retail and transportation
- Reducing wate from operations: retail, transportation
- Managing corporate reputation for sustainability: energy, extractive services, finance, healthcare high-tech & telecom, manufacturing, retail, transportation
This was just an excerpt of the McKinsey findings (see the complete data set here) but they reveal something interesting about sustainability in the B2B world: it is still an emerging strategic concern, and many businesses still haven’t really incorporated sustainability into their business models across all functional areas. In spite of this, almost every sector will value reputation management. This means that businesses understand that the market expects them to run a sustainable operation – which will undoubtly drive positive change.
Another story confirming the McKinsey indications is this from GreenBiz, showing a large increase in the number of Fortune 500 companies investing in sustainable products development (increasing from approximately 40% in 2010 to approximately 60% in 2015).
Consumers move faster than businesses when it comes to changing priorities behind their buying decisions. However, businesses are following suite, primarily influenced by social demand. This social demand is manifested through lawmakers creating more stringent requirements for businesses (such as taxing emissions, increased focus on labor market regulation and equal opportunities, etc), as well as a cultural shift affecting the values of the consumers in general, employees and investors.
- The UN sustainability goals serve as a starting point for reflection about how your business operations can contribute to improving society and the environment
- Consumers and B2B buyers both care about sustainability when making purchasing decisions. Enormous value can be unlocked by clarifying the sustainability credentials of businesses, and living up to expectations.
- Sustainability is about energy and waste – but it is also about building good communities, supporting human rights and strengthening democracy. Build the strategy where you can have greater impact.