Sustainability, future viability, and “fit for our grandchildren”—these terms, used almost to the point of overuse, are diverse but reflect a significant shift in social consciousness: Protecting the environment and living sustainably are everyone’s responsibility. An increasing number of investment firms and rating agencies are also looking at the future viability of business models and corporate leadership when evaluating companies. They analyze the extent to which companies incorporate social and environmental factors (so-called ESG criteria) into their corporate governance.
Quite a lot—society is not only increasingly favoring sustainably produced and traded products and services, but it also penalizes companies that turn a blind eye to this necessity. And indeed, Accenture’s Top 500 study proves that the 500 German companies with the highest revenue—which have incorporated adaptation to current developments (including digitalization and sustainability criteria) into their brand essence as part of their corporate culture—are more successful in the long term.
“According to recent studies, companies that have embedded sustainability management particularly deeply into their processes generate, on average, 21 percent higher earnings before taxes, interest, and depreciation. And, in all likelihood, this gap will continue to widen in the future against the backdrop of the current energy debate,” according to a report in the Süddeutsche Zeitung.
A company’s value is determined, on the one hand, by the future financial surpluses available to shareholders. If a company wants to operate successfully in the long term, it should consider not only present-value-based valuation methods but also so-called “soft facts”—such as customer and employee relationships, future market opportunities, and ESG criteria.
Operating sustainably—but how?
The fact is: Even small steps lead to the goal—it may take a little longer, but the direction is what matters. Companies would be well advised to scrutinize their operations and processes to identify potential for optimization in terms of environmental, economic, and social factors. Whether this involves reducing resource consumption, introducing new work-time models, or optimizing transportation routes—in every case, employees, the environment, and the company all benefit together. The result is effectively a win-win-win situation. This requires a decision at the highest level of management: Company leadership is called upon to prioritize sustainability just as much as the generation of profits.
Internal Activities: Let Actions Speak for Themselves
Working groups, expert committees, certification audits—if companies want to live out sustainability, management should engage and motivate employees. The goal: for sustainability to become a corporate value practiced daily and an integral part of the corporate culture. The best way to win over employees is through collaborative projects and activities that link environmental and social aspects to the company’s values and goals. The effort pays off in every case, as it not only boosts motivation but also strengthens team spirit and employee retention.
External Activities: Do Good and Share It
Customers, business partners, and suppliers should be made aware that sustainability is an integral part of the company’s goals and values—and how it is put into practice. In corporate communications—including marketing—this focus on sustainability and corporate social responsibility (ESG) is a powerful tool that contributes to corporate value in a variety of ways: both in terms of image and in monetary terms.
Conclusion: Sustainability as a Business Necessity
Even if the specific contributions companies make toward protecting the environment and society may seem small at first, they definitely pay off in the long run! Increase the value of your company by setting the course for responsible action today and incorporating innovative environmental technologies into your planning.
In doing so, you’ll ensure a livable future for future generations while simultaneously increasing the value of your company. The valuation and analysis tools of the aumento value® system take into account the future viability of business models from social and environmental perspectives. The topic of sustainability is given special consideration. For more information, visit www.aumentovalue.com.
