“Corporate social responsibility is a hard-edged business decision. Not because it is a nice thing to do or because people are forcing us to do it… because it is good for our business”
– Niall Fitzerald, Former CEO, Unilever
A Sustainability Committee is responsible for the sustainability strategy and performance of the business. Not only is it a core part of good governance in any company, its role is also to integrate both business and sustainability priorities so that the company is able to thrive.
Having a Sustainability Committee has many advantages that can apply to any business, regardless of its size or sector. Below are 5 reasons why your business should establish a Sustainability Committee:
1. Increased Consumer Demand
A 2014 study by Nielsen revealed that “55% of global online consumers across 60 countries say they are willing to pay more for products and services provided by companies that are committed to positive social and environmental impact.” Additional research from Cone Communications/Echo Global showed “91% of global consumers are likely to switch brands to one that supports a good cause, given similar price and quality”
2. Cost Savings
By reducing resource use, waste and emissions, you can help the environment and save money too. A great example of this is PepsiCo, which has saved $17 million in annual expenses by decreasing its water consumption since 2014. Waste diversion has also allowed PepsiCo to reduce some of its costs. Shipping less waste helped the company reduce expenses by $3.5 million annually since 2014.
3. Increased Innovation and Collaboration
When employees engage in social good activities, they are proven to become more innovative and collaborative leaders. By engaging with social causes in a variety of ways, your company can also learn about new geographies, cultures, markets, and product applications. McKinsey released some great case studies showing that sustainability activities can be easily measured to show benefits to new markets, products, customers, market share, and innovation.
4. Attract and Retain Top Talent
A company’s greatest asset is its people. Companies with published impact initiatives have an easier time recruiting talent. According to the Net Impact’s What Workers Want report, 45% of employees would take a 15% pay cut for a job that makes a social or environmental impact. Another 51% of workers say that helping “make a better world” and making a “contribution to society” are essential for their ideal job.
5. Improved Access to Finance
Investors are more likely to back a reputable business. A 2011 study published in the Strategic Management Journal clearly showed that CSR helps firms increase access to finance. This is largely because the impact investing field is growing dramatically. Some reports estimate that the size of the impact investing market will grow to over $500 billion by 2020. Investors also feel that there is a shortage of impact-worthy social impact investments. This means that if your business is healthy and can prove social impact, there is a large pool of capital waiting to be deployed.