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Does Big Business Care About Sustainability?

By Mark G. McLaughlin

May 02, 2018 - 4:18 pm

The days of polluters and those whose companies hurt the environment may not be numbered—not yet, anyway—but such companies are definitely losing the long game to sustainable businesses when it comes to attracting new customers, new investors and new talent. Millenials in particular weigh how sustainable a company is when deciding where to shop, where to work and where to invest. As that age group matures, they are becoming more important to those companies who are concerned about their market share and where to look for new sources of capital.  

So, while most of Wall Street treats sustainability as a secondary concern, companies focusing on becoming more sustainable are reaping the benefits—and not just on the public relations front, but in the battles for attracting and retaining customers, talent and investors.

Sustainable on purpose (and for profit)

There are companies, big and small, for whom being sustainable is a moral imperative. These businesses and their investors make money, but also reap a “feel good” profit. Unlike companies that are not environmentally friendly (or worse), the people who own, run, work at and invest in eco-friendly firms are often as passionate about doing something that is ecologically positive. These companies and people, as the Swiss-based international investing firm UBS calls them, measure their work and projects based on three scales: People, planet, and profit. All three have to balance out for the good. While some firms and projects are backed by philanthropists or their foundations, most sustainable firms were created from the start to be just that, whether it is a business that grows vegetables or nourishes minds or one that harvests fruit or harvests energy.

Sustainable to attract customers, investors and talent

Some companies have taken the sustainability path because by doing so they have found they can attract an entirely new, expanding pool of customers, investors and talent. Consumers are more likely to shop at stores, buy from companies or dine at restaurants that are following a sustainable path. They are also more likely to seek work at such places. In fact, 76 percent of Millennials said they would take a pay cut given the chance to work for a socially responsible company.

The way of the future

Many experts and think tank organizations believe that sustainability is the wave of the future – and that future is approaching at light speed. Both the Harvard Business Review and Schroders Global Investment, for example, note that investment in sustainable businesses is on the rise – and not just because they make money, but also because they make money doing things that match the beliefs of their investors. The choice of whether to invest in a company that has sustainable practices over one that does not is no longer just about the bottom line for Millennials, or for others who have either long-supported or have come to believe in the need for companies to adopt more sustainable ways of doing business. That is why when given the choice, more and more investors and consumers are choosing sustainability.

Content sponsored by PNC Bank