Beyond Profit: Embracing Sustainability for a Brighter Business Future

By Sarah Hill, July 18, 2023

The benefits of sustainability for businesses include reduced expenses (such as less waste generation), increased profits and financial/brand competitiveness, and better relationships with stakeholders. 

With all the threats society and business faces from climate change, as discussed last week, sustainability is of the greatest importance – not just for governments and individuals, but for businesses to practice too. If businesses are not already aware of why they should be practicing sustainability, or need a bit of convincing, that is where it is extremely helpful to understand something called the “business case for sustainability”. The benefits of sustainability for businesses, and thus the business case for sustainability, include reduced expenses (such as less waste generation), increased profits and financial/brand competitiveness, and better relationships with stakeholders. 

One of the most well-recognized benefits of sustainability for businesses is the decreased expenses a business incurs when using sustainable practices. Even before the term “sustainable development” was coined, businesses tried to more efficiently use resources and use less material and energy inputs to save money. Waste reduction and prevention is now a major area of sustainability, as well as a great way for businesses to save money. Another way of saving money comes from an improved relationship with one type of stakeholder in particular: employees. Sustainability practices often lead to improved employee retention, eliminating the costs associated with employee turnover which include severance pay, lost productivity and opportunities, and expensive recruitment and training processes. A way that sustainability reduces costs that may be harder to see is the risks companies are avoiding by engaging in sustainable practices and trying to avoid climate catastrophe, which brings higher costs of insurance and diminished supplies, as talked about more last week.The idea of saving money allows many businesses to see why they should move to be sustainable, but this is not the only tool to persuade businesses who need a push in the right direction.

Another major point of motivation for recognizing the business case for sustainability is increased brand and financial competitiveness, including the greater profits businesses see when they engage in sustainable practices. Customers are more likely to purchase from companies, perhaps exclusively, that engage in sustainable business practices as the value of sustainability has grown in recent years. Along with this, companies engaged in sustainability will have more leverage and, therefore, be more competitive for financing and funding, as sustainability performance is becoming an important factor in gaining access to funding. Investors are increasingly assessing sustainability factors in investment decisions, which is reflected by the fact that even in 2017 about $1 out of every $8 invested in the U.S. supports sustainability. Companies leading in sustainability areas will also have a financial advantage as they are much less likely to violate regulations and incur penalties, as these companies have greater awareness and understanding of policies related to sustainability and are better positioned to deal with them. This relation to regulations and policy also relates to the final part of the business case for sustainability: improved relationships with stakeholders.

The third part of the business case for sustainability is the improved relationships with stakeholders, including shareholders, consumers, employees, government agencies, communities (such as the surrounding community where a business operates), and business affiliates. As introduced in the previous paragraph, regulations and policy can lead to an improved relationship with government agencies because government agencies related to the environment and sustainability will hold companies leading in sustainability in higher regard. This can help those companies have more of a voice when those same government agencies are making policy decisions. Another very beneficial relationship that often is improved when companies engage in sustainable practices is with their employees. As mentioned previously, sustainable practices can improve employee retention, recruitment, engagement and satisfaction. Sustainability aids recruitment as many job seekers, especially Millennials, want to work for companies that are tackling environmental issues as part of their culture and business strategy. In terms of engagement and satisfaction, employees often feel a greater sense of purpose when they can help the sustainability initiatives of the company they are working for and so will be both more engaged and more satisfied. While these two types of relationships are not the only ones improved by companies engaging in sustainable practices and initiatives, they are a very large and important part of the business case for sustainability.

As this article has discussed, with sustainability practices and initiatives companies save money, are more competitive with other companies, and enjoy improved relationships with important stakeholders. The idea of saving money should appeal to any company regardless of if they are aware of issues affecting the environment, along with the opportunity to be more competitive. Relations with stakeholders are essential for any business to successfully operate and sustainability initiatives are important to stakeholders, so sustainability initiatives should be considered essential to business. Utilizing the business case for sustainability, consumers and employees can convince businesses to practice sustainability – if they need the extra push – and our society can more effectively combat the climate crisis.


Change The Chamber is a bipartisan coalition of over 100 student groups, including undergraduates, graduate students and recent graduates.

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