By Bruno Berthon, Accenture
Over the past five years, we’ve seen sustainability steadily move from the periphery to the heart of business. Companies have adopted sustainability practices for a host of reasons depending on the industries and geographies in which they operate. By now, it’s safe to say that most companies acknowledge that sustainability is good for business.
Today’s economic downturn, driven in large part by the frozen global credit markets, has placed an immediate premium on liquidity. As a result, companies are casting a critical eye towards all investments and initiatives, including those focused on environmental sustainability initiatives.
But high performing companies know that this isn’t the time to be shortsighted. It makes sense that amid continuing economic uncertainty companies scrutinize all investments, but not at the risk of eliminating or suspending sustainability investments because they would be viewed as superfluous.
Sustainability investments are closely aligned with critical moves companies need to make in a downturn—moves like “doing more with less”, returning to basics and investing prudently. Our research is proving that sustainability is a critical success factor for companies today and for how they set themselves up for the future. This is most visible in environmental programs that reduce emissions whilst simultaneously shrinking operating costs. To put it plainly, sustainability solutions and programs are a good proxy of high performance in companies.
Also, the key drivers of sustainability are independent of the present economic context. And they aren’t going away. The growing scarcity of natural resources will continue. So do consumer preferences for sustainable products and services. Employees are more aware of sustainability issues vis-à-vis the strategy and actions of their companies. In capital markets, we see not only more references to sustainability indexes, but also investments in sustainable technologies—demonstrating that investors still consider sustainability a wise investment option. Regulatory bodies at national, regional and global levels are not backing off. In fact, there seems to be an almost unanimous recognition among regulatory agencies to keep the pressure on.
Based on our most recent research and work, we recommend that companies follow five low-cost sustainability principles to gain an edge now:
- Growth: Even today, there’s at least one place that companies are capturing the type of growth that the investment community craves—the growing market for sustainable products and services.
- Profitability: More and more firms are finding that initiatives that reduce environmental effects also reduce operating costs.
- Positioning for the future: By linking arms with stakeholders and competitors alike to showcase their sustainability actions and impact, companies can influence the direction of public debate about sustainability and prepare themselves for forthcoming environmental regulations.
- Longevity: For companies seeking to stay current and capitalize on demand for sustainability products and services, the current downturn provides an attractive opportunity to acquire quality assets at below-market prices.
- Consistency: Companies should make extra efforts to remain aligned with sustainability’s ongoing evolution while they attract and retain customers and boost employee engagement to ensure predictable results period after period.
It’s more important than ever to demonstrate the value of sustainability, not only for long-term success but also as a part of the effort to survive or even thrive in the downturn.
Bruno Berthon is Managing Director, Growth & Strategy at Accenture, the global management-consulting, outsourcing and technology company. Mr. Berthon is also the global lead for the Accenture Sustainability Practice.
