Why should Businesses care about Sustainability?
Part 3/13 of the Business Sustainability in Nigeria Series by Adiya Atuluku and Jennifer Uchendu
From the parts one and two of our Business Sustainability series, we explained the general idea of business sustainability as well as some of its very important concepts. Today, we want to make a case for business sustainability and discuss why it is necessary for businesses (both small and large) to incorporate sustainability into their framework, strategy and decision-making process.
Business sustainability depicts a general idea of doing good for the environment you operate in and the various stakeholders you interact with. But perhaps, more importantly, the business itself gets to benefit more in both short and long terms. That way, even in this era of globalization and cut-throat competition, businesses stand the chance of success.
For businesses barely trying to stay afloat amidst highly challenging economic times in Nigeria, sustainability is usually not the first thing they think of, but we have come to realize that being distinct from business as usual (through sustainability) can open up many new and better opportunities which can increase profit margins and other benefits.
Below we have discussed four (4) key cases for why businesses should care about sustainability, and its incorporation is helping local companies do better.
Saving and making more money has never been so achievable
Thinking sustainably means you’re thinking differently and innovatively. This helps you be more creative about your products, services and processes, and so, giving you that competitive edge every business needs in this market and opening you a whole world of better opportunities which can increase profits.
A good example is Etisalat Nigeria’s 2014 sustainability report, their CEO stated that “We have also developed an innovation strategy that prioritizes the needs of customers – present and future – keeping us steps ahead of our contemporaries.”
The company has credited several of their new innovative telecommunication products to their sustainability thinking – e.g. easycliq, easy wallet, talkzone, easyblaze, etc., enabling them to achieve a triple bottom line and increasing their reach at the bottom of the pyramid.
Your organization also has the opportunity to save lots of money when you think sustainably, there are lots of low-hanging fruits like reusing paper, recycling waste and efficient energy use (e.g. switching off light bulbs); Diamond Bank has been able to achieve this so brilliantly!
To their credit, all Nigerian banks have gone digital with their services thus saving money, reducing their environmental footprint (less paper means less deforestation and less waste) and improved satisfaction for their customers (no need to queue, less money spent on transportation to the bank branches, etc.).
Another good example of sustainability thinking that has reduced so much cost in the Nigerian telecommunications industry is IHS’s tower co-location solution! Gone are the days when network and internet service providers have to raise their own towers to operate. Now, all they need to do is share.
Your brand image will benefit
According to research carried out by Cone Inc, 79% of consumers would switch to a brand associated with good cause. Honestly, thinking sustainably is a good way to gain market share from your competitors.
For most people, what comes to mind when they think of Unilever is their sustainability practice. This is because Unilever is incorporating sustainability at every part of their business – supply chains, factories, product design, waste management, etc., and they let people know about it. They launched their Sustainable Living Plan around their practice as well to the constant declaration for supporting a sustainable Nigeria and a sustainable world. This plan is a core part of their brand, and it inspires trust in people, and helps them win customers, which directly translates into profit! They have even reported that their brand is a key way to achieve their financial goal of doubling profits!
This brand image also attracts talent! People who are looking for a place that will enable them make an impact will want to work with you. Only last year, Unilever was ranked second in the Nigerian Best Place to Work ranking by Great Place to Work Institute. Unilever responded that this came at ‘no surprise’ because they actively work to consider the social arm of their bottom line. This means that for Unilever, human resources which is a vital factor in business success, is not in short supply.
You can ensure that your Business survives in a struggling environment
We are living in a world where global and local environmental problems have started affecting the way virtually anything works. The climate is warming, and it’s negatively affecting every industry, whether it depends on natural resources or is solely service oriented. Water is getting scarcer – some areas on the planet are getting too much (floods) and others are getting too little (droughts), all of which are disrupting supply chains!
To survive, and perhaps even thrive, you have to now find ways to reduce your environmental impact by using resources more efficiently and by reducing your carbon emissions. Some businesses are also exploring ways to trade their carbon so as to offset their emissions. For example, Unilever Nigeria ‘s partnership with Wecyclers, the Nigerian recycling company allows them to trade their carbon, thereby still doing their bit to reduce carbon emissions. What’s more, they are reducing their use of water in their factories through new technologies and more efficient processes.
It’s great to also see so many SMEs who are providing renewable energy and energy efficiency solutions to businesses, thereby helping them reduce their carbon emissions. A few of these companies are Go Solar, Solynta, Blue Camel Energy, Barefoot Power, Consistent Energy, and many more. Nigerian businesses are recognizing that thinking sustainably can help manage environmental risks and ensure that businesses can better adapt to a changing climate.
Partner with Governments and other Businesses to further both your goals and the SDGs
As you may already know, in January 2016, the SDGs replaced the MDGs – becoming the new global goals the world sets to achieve over the next 15 years. These highly inclusive and ambitious goals will help any forward thinking company to practice sustainability whilst contributing to its country’s sustainable development plan.
The Federal Minister of Environment, Amina Mohammed in her lecture just last week to the Chartered Institute of Bankers Nigeria (CIBN) said that “for the SDGs to be reached, everyone needs to do their part, government, civil society and the private sector.” A company like Unilever solves a social problem, iron deficiency by simply fortifying their Knorr stock cubes with iron, thereby supporting the global goals 2 and 3.
With this in mind, the last thing you want to do as a business is to act against global societal interest and cause reputational damage as companies like Volkswagen have painfully realized. Doing this can directly and immediately hurt your profits. Sometimes, these environmental and social infringements can even lead to legal actions against you. It’s simply good business to consider global and national interests.
When you do it right, you build good and profitable business partnerships with governments In Nigeria, Etisalat has credited a lot of new business opportunities to their good business relationships with government, which they built while implementing their sustainability agenda. They have also gotten good recognition from the business community when they won the Best Company in Partnership for Development in the 2014 Social Enterprise and Reporting Awards (SERAs). This certainly didn’t hurt their business.
In light of all of the above, we can definitely agree that there are a million and one reasons why businesses should think, act and be sustainable. Businesses need to see sustainability as a good way to, not only prove their ethics and integrity, but to make money.
In our next article, we will talk about what a business should do to be seen as sustainable.