What is sustainability and what does it mean to your business?

What is sustainability?

Simply put, sustainability is a business approach to creating long-term value by considering the social and environmental aspect connected to the business. A sustainable business is one that generates profit while at the same time improving societal and environmental conditions.

Social and environmental concerns have typically been considered as hurdles to the profit maximisation agenda. This, however, might not always be true. Businesses that integrate sustainability into their strategy can create a win-win situation where profitability is further improved while having a positive impact on the community and environment. 

How does being sustainable drive your business?

For a business, being sustainable enables value creation and value protection. Let’s explore this idea from a few angles:

1. Financially:

Businesses are able to have more efficient operations and lower operational costs by adopting sustainable practices. Companies could improve on resource efficiency to reduce wastage or to engage in facility upgrades to enhance safety and reduce accidents. These efforts increase productivity which then translates into lower operating costs and higher profits.

For example, solar power is sustainable and cost effective as an alternative energy to substantially reduce utility bills in the long run. Businesses could get a financing limit that covers up to 100% of the cost to purchase and install rooftop solar PV systems on their premises through CIMB’s financing facilities.

2. Social and Workforce relationship:

Being sustainable leads to improvement in brand value and reputation as it strengthens stakeholder relations. 86% of millennials would take a pay cut to work for a company whose mission and values align with their own. Hence, by sharing a common agenda of sustainability with employees, a company may achieve better talent attraction and retention through a purpose-driven mission.

With a motivated workforce, the quality of goods and services provided will indirectly be elevated and this enhances the reputation of the brand among the community it serves.

3. Resources:

Business longevity can be achieved via sustainable practices such as focusing on responsibly sourced material or inputs. By using sustainably sourced inputs, businesses are able to prevent major disruption to their supply chain caused by new regulations, climate change and litigation on unethical labour practices, to name a few.

The use of responsibly sourced materials also helps businesses capture more of the increasing market share of well-informed consumers that pay close attention to a product’s environmental and social impact. As a result, businesses are more resilient towards both demand and supply side shocks.

The benefits of sustainable business practices are not limited to only the above. It may also help your business differentiate your products or help you penetrate into new markets more easily. The result is that your efforts may help bring you more profit.

Kick start your SME sustainability journey today with GreenBizReady

Research shows that companies with sustainability initiatives can drive business success. To start this journey, business owners have to take a longer term vision by aligning business strategy and value chain to match the agenda of sustainability.

If you're eager to start your sustainability journey, CIMB's GreenBizReady is a one stop sustainability solution to help SMEs and business owners grow towards the green economy. Through this solution, you can gain access to financial solutions and incentives such as sustainability -linked financing benefits, access to sustainability service providers, training and capacity building, certification and advisory services and business support from our industry leaders and government agencies. Learn more and visit our GreenBizReady page here. 

Take this opportunity to take charge of your business successes and seize the opportunity to build trust with the community that you serve.

This article is brought to you by CIMB as part of our ongoing efforts to raise the level of financial literacy among Malaysians. Financial knowledge and understanding are key to making well-informed and meaningful financial decisions that will improve our well-being. This, in turn, achieves CIMB’s purpose of advancing customers and society.