Sustainability is a topic that is very much at the forefront of social consciousness, so aligning it with your business practices can attract potential investors.
It may require significant costs to be sunk into your company, but the payoff can make it extremely beneficial – for your business, your investors, your customers, and the wider public.
Consumers have become more discerning in recent years, with climate change forcing many to look at how they can live a more sustainable life. According to research by Deloitte, 40% of consumers have made a conscious effort to buy from brands with environmentally sustainable practices and values.
That percentage is likely to only grow in the coming years, so if your brand is greener it will be better set up to capitalise. You also won’t be forced into wide-scale changes to your business model in order to keep up with more sustainable competitors.
So, in effect, a business with an environmentally friendly approach is a futureproofed one – and that is comforting to an investor.
Brand reputation and customer loyalty
A commitment to sustainability can show the human side of your company. It demonstrates that you have goals and values that customers can agree with, bringing a degree of trust and authenticity to your brand that can be hard to attain by other methods.
This can be particularly beneficial if the industry you operate in is responsible for significant pollution – like the fashion sector, for example. Committing to air pollution solutions or partnering with conservation projects can enhance your brand’s reputation with consumers and therefore make it more of an attractive proposition for investors.
Cost savings and efficiency
The unfortunate fact is that, at the moment, implementing sustainable business practices may not be best for the bottom line. Whether it’s installing solar panels and wind turbines or restructuring a supply chain to only partner with firms with shared values, it’s a costly process.
However, the long-term benefits are undeniable. If renewable energy sources are installed, for example, over time they will pay for themselves and then only provide savings.
And, of course, reduced costs and streamlined supply chains are more attractive to investors as it is easier for them to see a return on the capital they put in.
Access to capital
There has been a rise in the number of investment funds that focus on firms with strong environmental, social and governance (ESG) policies. And because, unlike traditional funds, they aren’t solely looking at the bottom line, it makes it easier for businesses that focus on these areas to gain investment.
Such investment can allow your business to fund new research, partner with additional environmental projects, or simply power growth, expansion and development.