Creating and growing sustainability in business is good for many reasons. It goes without saying, but the main reason is to simply do the right thing. We need to take care of our planet for the benefit of all. However, good conscience aside, a sustainable business model can also be a successful business model.
The World Economic Forum’s Future of Nature and Business Report found that prioritising nature is a $10 trillion business opportunity that could create 395 million new jobs by 2030. Mix this (and other similar report findings) with rising pressure from investors, consumers, regulators and other stakeholders, more and more companies are scrutinising the environmental effects of their business. Investing in sustainability is becoming a more mainstream idea for businesses as a result.
While we all have a responsibility to live sustainably, steps taken by businesses couldn’t be more meaningful. True business sustainability means more than selling eco-friendly products and reducing emissions. It’s about operating with purpose via business models that value social and environmental impact as much as financial profit.
So, what is the world looking to achieve when it comes to sustainability? What are the goals?
In 2015, world leaders at the United Nations (UN) agreed on 17 goals that would create a better world by 2030. These goals focus on eradicating poverty, fighting inequality, and ending climate change.
Businesses can do more, and should do more – from responsible consumption and production, to affordable and clean energy. With only eight years left until the deadline, we’re seeing some key trends starting to emerge. Here are some examples of sustainable business trends:
1. Increased focus on ESG principles
ESG is a collective term for a business’s impact on the environment and society, as well as how robust and transparent its governance is in terms of company leadership, executive pay, audits, internal controls, and shareholder rights. It measures how your business integrates Environmental, Social, and Governance practices into operations, as well as your business model, its impact, and its sustainability.
Smaller companies are also encouraged to embrace ESG. Even if your business isn’t looking for investment, adopting an ESG framework has benefits – from reducing risk and lowering costs to improving reputation and attracting new employees and customers.
2. Moving towards a circular economy
This is a model in which economic growth does not go hand-in-hand with the exploitation and consumption of natural, non-renewable resources. The aim of a circular economy is the resource-efficient and sustainable use of natural resources, their reuse and recycling within a circulatory system and the prevention of waste.
To understand the concept, take a look at this useful video illustration, which outlines its definition and gives visual examples:
3. Increased conscious consumption amongst consumers post-pandemic
Having a purpose beyond profit is an opportunity to drive meaningful connections with consumers, whose attitudes and behaviour are increasingly moving towards sustainable lifestyles. This trend accelerated in 2020, with 55% of people in the UK saying that it has become more important for companies to behave more sustainably because of the impact of COVID-19.
According to data from Google’s Search and Maps apps, people in the UK are proactively taking steps to live more sustainable lives by making greener and cleaner choices, with 75% of the UK public agreeing that if we don’t change the way we live in the next 10 years, the state of the planet will put the survival of future generations in jeopardy.
Consumers expect businesses to also play their part, with 72% saying that having a brand’s values reflect their own beliefs is a deciding factor in what they buy.
4. Consumers expecting businesses to lead on climate
There are various reports and surveys online that show consumers are increasingly favouring businesses with a commitment to environmental sustainability.
For example, an independent study commissioned by SmartestEnergy reveals exactly this, with 4 out of 5 people describing themselves as likely to choose a brand with a positive approach to environmental sustainability, with 90% agreeing that it’s vital that society becomes more energy-conscious. 87% of consumers want brands to act now to encourage future sustainability.
However, despite finding considerable consumer interest in environmental issues, the study reveals that 45% of consumers are unaware of practices that consumer brands have adopted to encourage environmental sustainability. Companies are therefore either not executing eco-friendly practices, or not adequately publicising their environmental impact. To remain competitive, it is important for businesses to not only adopt environmentally sustainable practices, but to ensure that they communicate this to potential customers.
2022 has seen a number of household-names move towards greener initiatives. For example, as part of its effort to reduce waste and become more sustainable, Apple released several new products made from 100% recycled aluminium, including the iPhone 12, MacBook Air, Apple Watch, Mac mini, and all iPad devices. Apple has also vowed to reduce its carbon footprint by using green energy for all of its data centres. The company is carbon neutral across its corporate operations and is on the way to making carbon-neutral products by 2030.
5. Businesses ‘building back better’ after the pandemic
It goes without saying that the COVID-19 pandemic has impacted UK businesses and the economy. However, with businesses back open, there’s an opportunity to question whether we should be returning back to ‘business as usual’. Now is a great opportunity to ‘build back better’ and make operations and workplaces more efficient and sustainable.
While most small businesses are focusing on their immediate needs and recovery from the pandemic, it’s important not to lose sight of sustainability. According to a survey by Edie, four in 10 SMEs are unsure how to prepare for the government’s commitment to net zero by 2050 due to lack of in-house expertise, costs of carbon accounting and new technologies.
While larger and medium-sized organisations will have greater flexibility in their sustainability strategy, smaller businesses should still strive to keep sustainability on the agenda. This will support future activities that may align with government net zero policies and can help mitigate risk to your brand value, as consumers become increasingly aware of the climate emergency.
6. Revisiting supply chains
As part of the UN’s responsible consumption and production goal, more supply chains are being reassessed to ensure they support a business’s environmental goals. From areas such as climate action to life below water to life on land, every part of the supply chain has a responsibility to play its part.
According to CDP, an international non-profit that promotes environmental disclosure, the impact of end-to-end supply chains on emissions is more than five times that of companies’ direct operations. But greener supply chains – including direct operations – can also translate into sizable financial and commercial benefits for companies, especially over the longer term. Such benefits can include lower operating costs, a stronger brand and improved access to resources.
7. Eco-friendly and sustainable packaging
A recent survey found that 74% of consumers indicated they would pay more for products that were contained within environmentally safe and sustainable packaging. This means that in 2022 (and beyond), your packaging could be the deciding factor between a consumer supporting you over your competitor. Not only will eco-friendly and sustainable packaging protect the environment, but it creates a positive brand image.
Many companies are starting to use biodegradable, compostable or recycled materials in their packaging designs in response to customer demand (and hopefully their consciences as well!).
Examples of sustainable packaging trends:
- Paper void fill: To protect your product from too much movement during the shipping process. No more unsustainable plastic bubble wrap, styrofoam peanuts or plastic air pillows required.
- Self-adhesive paper tape: Eco paper tape is made from renewable kraft paper, not from plastic – offering an eco-friendly, micro-plastic free alternative to conventional petrochemical-based plastic adhesive tapes.
- Biodegradable packing peanuts: As an answer to protests over the environmental impact of the petroleum-based foam packing peanut, manufacturers in the ’90s began experimenting with starch-based packing peanut alternatives, thereby creating the biodegradable packing peanut! These are made from naturally derived starches like wheat and cornstarch. Entirely plant-based, they dissolve in water, making it impossible for them to wind up polluting oceans, lakes, rivers, or waterways.
8. Innovative product design
Sustainability can drive innovation by introducing new design constraints that shape how key resources are used in products and processes.
And it’s not just about new ideas but challenging traditional ones. For example, Beyond Meat’s meat replacement products use 99% less water and 93% less land, and emits 90% less greenhouse gases, compared to the production of traditional meat-based products. The company created massive market value through its IPO and is experiencing booming product sales.
9. Green transformation for UK small businesses
Sustainable working is a key trend this year, and beyond. Following COP26, the UN summit on climate change hosted in Glasgow in 2021, it’s clear that UK SMEs are making significant progress in their commitment to tackling climate change.
New research from Aldermore has found over half (53%) of UK SMEs have invested in sustainability over the last year – spending an average of £61,250 on sustainability initiatives, with the average SME business planning to spend a further £78,392 on sustainability in the coming year (an increase of 27%!).
10. Green energy
One of the easiest ways to make your business greener, is to switch your energy to a green or renewable tariff. Green energy is generated from natural resources, such as sunlight, wind or water and often comes from renewable energy sources. The key with these energy resources is they don’t harm the environment. In order to be deemed green energy, a resource cannot produce pollution, such as greenhouse gases.
Multiple energy suppliers offer green business energy tariffs. These tariffs mean some or all of the electricity you use is matched with the amount which the supplier buys from renewable energy generators. Your business receives the same gas and electricity through the same pipes and wires as if you were on a standard tariff – the only difference is your money is being spent on feeding ‘green’ electricity into the national supply.
11. More affordable and accessible eco-friendly products
We’ve all been there – two similar items are in your basket; however the eco-option is more expensive. As the cost-of-living crisis continues, choosing the eco-friendly option just isn’t possible for many.
There are many reasons why sustainable products can be more expensive. The production process involves using quality raw materials that are more expensive, higher manufacturing costs due to the more complex process, following green practices, plus a lack of demand.
But as the stats show, consumer demand is increasing, which will in time lead to more affordable eco options being offered by businesses. And let’s not forget about increasing consumer awareness around the value in opting for the eco alternative – yes, the upfront cost is higher, but sustainable products can be reused multiple times, making them work out cheaper in the long term.
By purchasing an eco-friendly product, conscientious consumers are increasing the demand for that item, helping to make it accessible for more people in the future.
12. Demand increase for more sustainable employers
A recent report from intranet company Unily revealed that 83% of workers thought their employer was not doing enough to be more sustainable and tackle climate change. What’s more, 65% said they would be more likely to work for a company with a strong environmental policy.
The reasons for this include the belief that a more sustainable employer is more likely to care for them, a desire for more meaningful work, and a realisation that such work will make them more satisfied and engaged. It’s no wonder that young people today are actively choosing to work for employers with sustainability at the forefront of how they operate, with many even willing to take a pay cut to do so.
13. A credible, certified climate plan
A credible climate plan is now mission critical for businesses. Whether you’re a sustainability pioneer or just getting started, there are a number of organisations you can look to for guidance and certification.
For example, Climate Neutral is an independent nonprofit with a vision to create the world’s most recognised and trusted climate label, paired with accessible, action-focused tools and resources.
To become Climate Neutral Certified, a company must show that it is working to reduce the greenhouse gas emissions from making and delivering its products and services – and compensates for all of them, every year. The Climate Neutral Certified label is a badge of carbon accountability.
An example of a business playing its part is British-born brand, Stubble & Co, which designs durable backpacks and holdalls. “Since day one, we wanted to be a brand that puts the planet first, upholding ethical and sustainable practices at every stage of every process,” comments Co-Founder and CEO Ben Watkiss. “Whether it be our employees, our community, or the environment, at Stubble & Co we will always strive to Do. More.” Stubble & Co is Climate Neutral Certified, and part of the 1% for the Planet, meaning it’s committed to giving 1% of annual sales to approved environment non-profits.
14. Reduction in business travel
With remote working proving its worth to many businesses during the pandemic thanks to software such as online video conferencing and collaboration tools, a business case has certainly been made when it comes to questioning the value of regular business travel – particularly long haul.
While there’s still a requirement for CEOs / key executives to travel for business, many are cutting back on non-essential business travel – particularly flights – in favour of video calls to conduct long distance business.
Not only is this reduction in business travel kinder to the planet (90% of business travel carbon emissions come from flights), but it’s also kinder to a business’s finances! Many eco-conscious employees are also in support of avoiding unnecessary travel where possible.
15. Challenging a system that doesn’t support your sustainability efforts
For many businesses, implementing sustainable solutions can prove expensive. If a system is in place that doesn’t allow you to run a financially sustainable business, while trying to also do the right thing, then there’s a problem – and this is where the barrier lies for many. But, as environmental engineer and sustainability consultant, Georgia Elliott-Smith, outlines in her TEDTalk, you need to identify these barriers and take them to the decision makers.
As you can see, there are a number of sustainable business trends that are gathering momentum as part of the ‘now we have to act’ consensus. However, whether these trends (and others) shape the future comes down to a number of varying factors. Doing the right thing might not necessarily mean it’s the easiest thing to do, with many small business owners having to do some creative thinking in response to any ‘computer says no’ barriers along the way, such as affordability and feasibility.
But with an increased awareness and expertise around business and its responsibility to the environment, it’s a truth universally acknowledged that when businesses take sustainability seriously, it can have extremely meaningful repercussions – both now, and in the future. And that’s worth the fight, right?
Jenny Lambert is a freelance writer, interiors blogger and Etsy shop owner with extensive experience working in marketing, digital and publishing roles.