Businesses Must Be Convinced Of The Commercial Case For Sustainability If Green Targets Are To Be Achieved
New research finds that sustainability is catching up to factors affecting profitability in the list of biggest challenges for large organisations.
Large and medium-sized organisations report improving sustainability among the three biggest challenges they face. Greater focus is being put on bringing social and environmental concerns in line with factors affecting profitability, according to new research undertaken by one of the UK's leading business energy suppliers, Gazprom Energy.
The pressures of the recent pandemic and events such as Brexit have meant that factors affecting profitability are a key challenge for businesses. However, sustainability challenges are creeping up on the business agenda, highlighting greater ethical business thinking and an emphasis on people and the planet, alongside profit.
The research, published in the Road to Net-Zero report, found that ‘identifying ways to reduce energy consumption’ (75%) and ‘working to reduced budgets’ (73%) were the top two energy-related challenges organisations are up against. Despite the obvious concern for budgets, ‘trying to meet sustainability targets’ still managed to make an appearance near the top of the list, chasing closely behind at 69%.
While promising, this still means that almost one third (31%) of businesses do not consider sustainability a key challenge, despite possible effects on commercial performance and a big push by the UK government in recent years for businesses to go net-zero. As a result, just 40% of businesses have made a net-zero commitment.
With sustainability high on many organisations’ agendas, particularly in light of the recent COP26 conference in Glasgow, UK businesses should consider both the environmental and financial benefits of taking their first steps on the road to net-zero. Not only are many sustainability initiatives inexpensive, making more sustainable energy choices could also reduce costs and boost profit. There are multiple reports that cite the direct correlation between sustainable practices, share prices and business performance.
Dan Sullivan, Head of UK Sales at Gazprom Energy comments: “It is important that businesses understand that financial and sustainability priorities do not necessarily contradict each other – in fact, just the opposite. Sustainability initiatives can help to deliver profit and create new business opportunities.
“Taking a sustainable approach to energy usage by conducting an energy audit and implementing measures to improve efficiency can reduce energy costs while also helping businesses to achieve their sustainability goals. Whether the reasons are financial or ethical, the result is the same – a more sustainable organisation.
“Customers, employees and investors are expecting organisations to behave more sustainably, and by responding to the need for sustainable products and services, organisations have the power to create a foundation for sustainable profits.”
Advanced sustainable energy measures, such as onsite power generation, can reduce a business’s reliance on power from the grid, while measures such as power purchase agreements (PPAs) allow these organisations to sell excess power generated on site for a direct and regular financial return after the initial equipment outlay.
Dan continued: “Though more substantial sustainability measures may take longer to deliver commercial returns, these should be viewed as investments organisations can make to demonstrate a long-term and proven commitment to sustainability. Businesses with ESG principles built into their long-term growth strategy can mitigate risk and drive profitable growth, whilst positively impacting the environment.”