Sustainability programs not only provide environmental and brand benefits but offer value to the stakeholders in a company. Managers not directly involved in overseeing social and environmental sustainability initiatives at their company often have too narrow an understanding of how much value it brings to their corporation.
Focus is often put on the cost of the initiative and less attention is given to the full value.
As with any major business decision, management must consider the ramifications to the major stakeholders as they debate the impact on the bottom line.
Will this decision lead to a higher share price for investors?
Will this decision lead to new or happier customers?
How will it impact how regulators view the firm?
These are just a few of the many stakeholders concerns that management must consider when reviewing a new strategy of sustainable product manufacturing in the UK.
In this blog, we will look at each of a business's major stakeholders - investors, customers, employees, and regulators - and describe how environmental initiatives, in particular, deliver value to each.
The priority of an investor is maximising the return on their investment. With this in mind, an increasing number of investors are realising that the environmental performance of their investments is a real contributor to better returns. A key component to any environmental program is delivering energy and resource efficiency improvements, simply doing the same or more with less. This reduces costs, increases profits, and ultimately drives shareholder value.
Savvy investors also care deeply about a company's ability to mitigate long-term risks, including market and regulatory risks. Correct sustainable product manufacturing in the UK is working hard to manage these risks and the environment and investors are benefiting.
Just as more investors are taking into account environmental impact when investing money, more customers are considering the environmental footprint of various products when making a purchase. According to the reports, “The world's largest retailer, Walmart is pushing its suppliers to adopt sustainable practices through its Walmart Sustainability Index. While many have criticised this action as an unfair abuse of power by the large retailer, it is undeniable that it is forcing suppliers to reduce the impact of their operations.
The resulting cost savings are passed on to Walmart and consumers. These gigantic corporations are driving green innovations to gain even more market share”. It will be necessary for other businesses, suppliers, and direct competitors, to adapt or be left behind.
Often overlooked is the value that employees place on working for a sustainable company. Sustainability can help attract talented new hires as well. A survey conducted in the United States found that 63% of individuals believe a company's environmental impact is vital when evaluating a new workplace. This strong preference may not yet be as high elsewhere just yet; but this is changing, and sustainability can be a positive differentiator to help your company attract top talent.
Now knowing that virtually everyone important to a company cares about the company's sustainability performance, how do we make sure all these stakeholders know what that is?
The following are a few recommended tips:
- Engage stakeholders in sustainable product manufacturing in the UK sooner rather than later to ensure you have the right latitude to develop an effective strategy and you develop a reputation for transparency.
- Nobody and no company are perfect, you will develop more trust with stakeholders if you share the bad with the good.
- Your strategy to engage stakeholders should include a range of channels including ubiquitous but informal social media, face-to-face direct meetings, and detailed protocol-based reporting that makes the full story available to anyone interested in looking at your performance at any time.
Tiger Global is a sustainable product manufacturing company in the UK that engages stakeholders in all its processes thus communicating better business sustainability commitments. Let's talk.