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Entrepreneurs are naturally focused on profitability, but that doesn’t mean they can’t also focus on sustainability. Company founders are increasingly launching organizations with strong environmental, social and governance (ESG) components.
And private equity and venture capital firms are taking notice and supporting startups and existing organizations that demonstrate a commitment to sustainability, such as those in the renewable energy industry. In the third quarter of 2022, Morningstar reports that US sustainable funds were worth $272 billion.
Even giant legacy companies like General Mills have created venture capital groups that are expected to make strategic investments, taking into account ESG principles.
And it’s not just profitability that has attracted companies to ESG policies. Employees want to be happy, engaged and productive. Purpose-driven companies help them achieve those goals. Customers also want to support mission-based brands that align with their sustainability and environmental beliefs. Doing good has changed from the right thing to the profitable thing to do.
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But integrating ESG into an organization’s ecosystem can be challenging and costly. As an australiabusinessblog.com or manager, you don’t have to feel that you have to sacrifice sustainability for profit. Here are three steps to success.
1. Rebalance your focus
You can’t completely change your company’s goals, but you can rebalance your focus.
An excellent way to do this is to adjust your marketing strategy to talk more about your sustainability initiatives. That’s one way to get ESG traction and attention.
Think of this as creating a self-fulfilling prophecy. The more you talk about your sustainable benefit, the more interesting you can make your business while raising money. You don’t have to stop what you’re doing – you need to emphasize where you’re making a social impact.
2. Confirm your desire to be profitable and sustainable
Speak loudly and proudly about your desire not to put profit before goal. There is no reason to choose one over the other. You can do both. However, your team members and other stakeholders cannot read your mind.
First, take the time to sit down and define how you plan to leverage your sustainability to drive sales. Draw a Venn diagram with two circles: one is profitability and the other is sustainability. Then fill in the circles with your activities, products, etc. Where the circles overlap, you make a profit and you are sustainable.
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Once you’ve identified these places, consider making those points your competitive advantage. Showcasing how your company adds unique value through transparent sourcing, circular product development cycles and other sustainable practices can help you stand out. Consequently, you can benefit from the billions of dollars flowing into the sustainable investment economy mentioned above.
3. Hire experts aligned with your sustainability mission
Moving forward is a challenge if a durable North Star isn’t leading your team. When you include employees in the herd, make sure they align with your vision.
A Gallup a poll found that younger employees who feel connected to their company’s mission, vision and purpose are more likely to stay. The longer you hold on to your solid performers, the more expertise (and heart) they can bring to your business.
You are more likely to achieve your goals if you have a team you can rely on to lead your organization to sustainability and profitability. If you have people but don’t have a good idea of how to steer your purpose-profit ship, consider reaching out to ESG advisors or experts such as NGO professionals. They can show you what you’re missing and identify gaps.
Related: Creativity a prerequisite for building sustainable business: SustainKart’s Kanthi Dutt
Remember: you can’t do everything yourself. Surround yourself with colleagues who believe capitalism is compatible with green and have strong ideas to get there.