Some may think that companies’ efforts in social sustainability are a preference for society, but this is a misunderstanding, as these companies reap many advantages by adhering to environmental rules, whether in the medium or long term.
This is why it is not surprising that social sustainability becomes a vital part of any organization. CSR affects everything; From customers and employees to investors. Business leaders who understand how to integrate sustainability into their operations can set their companies up for long-term success.
In addition to the above, sustainability may help companies promote innovation, growth, and the ability to meet environmental and societal challenges. The more a company cares about society, the environment and its employees, the more successful it will be in the long term.
The importance of social sustainability
• Cut costs
Reducing the environmental footprint often means considering efficiency measures at every stage of business operations (energy, raw materials, factories, etc.), and many companies are moving towards a circular economy that conserves and recycles resources.
Changing habits, reducing waste, reducing energy, and implementing more cost-effective systems and supply chains show that moving towards sustainability goes hand in hand with cost savings and operational efficiencies.
• Attracting customers
It is no secret that today’s consumers are more aware of the environment than ever before. They consider a company’s social and environmental impact when deciding whether to purchase a good or service and are more likely to buy from companies that practice sustainable habits.
According to the latest survey conducted by Deloitte UK on social sustainability and consumer behavior, 28% of consumers stopped buying certain products due to ethical or environmental concerns; Rather, this percentage reached 45% among Generation Z (people born after 1997 AD). This trend is likely to continue to increase in the coming years. Hence, companies must meet new consumer expectations.
• Raising the rate of employee retention
People’s needs to think about both the personal and the public future are constantly increasing, especially among the younger generations; Therefore, they do not want to be associated with companies involved in environmental disasters or cause damage to society.
Consquently, companies that do not show any interest in dealing with the social and environmental impact of their activities will be excluded by qualified youth and talent, and vice versa. Thus, the retention rates of qualified employees will increase, if the company enhances its social sustainability practices.
• Improving the brand image
The ubiquity of the media and the power of social media means that companies are increasingly subject to public scrutiny. Unethical practices and irresponsible operations are becoming increasingly difficult to hide.
Corporate entities are now under constant pressure to show a positive image of their environmental, social and ethical responsibility, and if they adhere to environmental and social standards, this means that their brand reputation will improve greatly with consumers.
• Ensured long-term viability
For organizations around the world, incorporating sustainable innovation, inclusive growth, as well as social and environmental impact into corporate strategy now makes business sense and ensures the company’s long-term survival.
A study by professors at Harvard Business School and London Business School tracked companies that voluntarily adopted social sustainability policies by 1993.
Compared to companies that did not focus on as many sustainability policies, the most sustainable companies outperformed significantly over the next 18 years from a stock market and accounting perspective.
• Attracting investors and funds
Investors are increasingly scrutinizing companies’ social sustainability efforts. Whether in terms of general practices, or internal efforts.
According to the American SIF Foundation’s 2020 report on sustainable investment trends and impact in the United States, as of the end of 2019, one out of every three dollars was invested in professional departments in what is known as sustainability, responsibility, and impact (SRI).