Many businesses around the world are eager to reduce their environmental footprint in the face of a major cultural shift, recognizing that it’s ultimately good for business. Customers increasingly want to spend on brands that prioritize sustainable behaviors such as reducing waste and carbon consumption. But many businesses still struggle to translate sustainability commitments into tangible action. A Visa Global Sustainability Research study, in partnership with EY Consulting, interviewed 9,000 businesses, small and large, in 18 countries to get a better sense of their motivations when it comes to business, people and the planet.
The findings? Small businesses want to do the right thing for the environment, yet many don’t know where or how to start. For instance, 89% of small businesses believe they are acting in a way that is environmentally sustainable, yet only 33% have actually taken the step to measure their carbon footprint. And while 70% of small businesses say environmental sustainability is important for strategic decision-making, only 42% have achieved any kind of environmental milestones.
There’s a gap, it seems, between perception and reality. And the reality is that sustainability isn’t a passing fad. Here are three reasons why SMBs should prioritize sustainability efforts:
1. Customers care
Consumers are loyal to brands that align with their values. Two thirds (66 percent) of consumers believe CEOs should take charge on climate change rather than wait for government action¹ while 43 percent of customers say they would stop buying from a company that acted in a way that was not socially or environmentally appropriate.² Focusing on sustainability efforts — efforts that your customers care about — as part of your daily business practices can give SMBs a competitive advantage.
2. Investors and regulators are noticing
How companies address issues around sustainability can be the difference between getting funding and getting overlooked. The Visa research study found that 78 percent of institutional investors are conducting structured ESG evaluations of potential investments, up from 32 percent in 2018.³ Regulations are also becoming a critical business risk, said 46 percent of boards,⁴ making initiatives that focus on sustainability a proactive way to mitigate that risk.
3. Employees demand it
Workers care more and more about sustainability, with 62 percent of employees saying that they believe they have the power to force change.⁵ Half (50 percent) of employees are more likely to voice their objections to management or engage in workplace protests too.⁵
Not sure where to begin? Start with what you know.
To be clear: sustainability efforts don’t have to mean reinventing your entire business. A lot of times they can be incorporated into everyday business practices, from manufacturing and production, to travel and operations, to employee and customer initiatives. For instance, retailers can look to customer-facing initiatives like offering sustainable returns, digital receipts, and secondhand marketplaces to put the planet first with every purchase. All of this together can have a direct impact on customer loyalty.
Sustainable business practices can ultimately impact your bottom line — both through reducing the cost of things like energy consumption, for instance, and attracting and retaining customers. At the end of the day, it’s good for both business and the planet.
- EY CEO Outlook Survey, 2022
- https://www.ey.com/en_gl/consumer-products-retail/future-consumer-index-in-crisis-but-in-control
- EY Institutional investor Survey, 2021
- EY Board Risk Survey, 2022
- Edelman Trust Barometer, 2022