Sustainable business practices provide a positive impact on business performance. Significant cost reductions can result from improving operational efficiency and managing sustainability risks. Sustainable businesses create value for all stakeholders, including employees, shareholders, supply chains, civil society, and the environment. There is a significant opportunity for companies on ESG matters, and investors are beginning to value them more highly.

Sustainability is not just a corporate social responsibility but enlightened self-interest. Michel Porter and Mark Kramer pioneered the idea of “creating shared value.” Much of the strategic value of sustainability comes from the need to continually talk with and learn from key stakeholders. Through regular dialogue with stakeholders and continual iteration, a company with a sustainability agenda is better positioned to anticipate and react to economic, social, environmental, and regulatory changes as they arise. Companies need to redefine their value proposition to create shared value.

Managing risks requires making investment decisions today for longer-term capacity building and developing adaptive strategies. Supply chains today extend around the world and are vulnerable to natural disasters and civil conflict. Climate change, water scarcity, and poor labour conditions in much of the world increase the risk. Companies need to have an ESG risk management strategy that protects their operations and supply chains. Companies can invest in interventions to build resilience in their operations and supply chains to reduce risk and enhance productivity.

Investing in sustainability is not only a risk management tool; it can also drive innovation. Companies can redesign their products to meet environmental standards or social needs, offering new business opportunities. Sustainability needs to be embedded in its innovation process to create value and sustainability opportunities. Sustainable innovation can also help companies improve their resource efficiency and achieve significant cost savings.

Companies are realising significant cost savings through environmental sustainability-related operational efficiencies. They are also unlocking opportunities for process and logistics savings. High performers on ESG (environmental, social, and governance factors) deliver better financial performance. By managing ESG matters, companies can lower costs and improve their bottom-line.

Consumers expect transparency, honesty, and tangible global impact from companies. Sustainability is good for business and meets the growing consumer interest in sustainable products. Companies need to create sustainable products that meet consumers’ needs and expectations. They need to integrate environmental and social considerations into their branding, marketing, and sales efforts. Companies can charge higher price premiums based on positive corporate responsibility performance.

Companies should redefine their value proposition to create shared value. They need to have an ESG risk management strategy that protects their operations and supply chains. They should invest in interventions to build resilience in their operations and supply chains to reduce risk and enhance productivity. Sustainable innovation can help companies improve their resource efficiency and achieve significant cost savings. High performers on ESG deliver better financial performance. Companies need to create sustainable products that meet consumers’ needs and expectations. They need to integrate environmental and social considerations into their branding, marketing, and sales efforts to build customer loyalty.