{"componentChunkName":"component---src-templates-articles-index-jsx","path":"/articles/sustainability-changing-how-we-do-business/","result":{"data":{"props":{"adsense":false,"adsenseMobile":null,"byLine":"","canonical":"https://staging.business.com/articles/sustainability-changing-how-we-do-business/","content":"

Patagonia. TOMS. Warby Parker. REI. Everlane. Sustainability has become almost synonymous with credibility in business. Consumers, investors and regulatory agencies are more demanding than ever before when it comes to socially and environmentally responsible business practices.

\n

The idea of going green to succeed in business is a relatively new one. In previous generations, it was enough to simply sell a quality product or service. Customers didn't ask about supply chains, livable wages or carbon footprints. Whether a company was run ethically was entirely up to its board of directors.

\r\n

This all changed once millennials began to flex their buying power. And, yes, millennials actually do have buying power – they may often be labeled as perpetually broke, but millennials make up one-quarter of our population and are expected to spend $1.4 trillion in 2020.

\r\n

While our nation's avocado-loving youth has been accused of killing everything from cereal to homeownership, millennials have undoubtedly brought sustainable business practices into the spotlight. Their penchant for living green and buying local, compounded with growing concerns about climate change and social equality, has prompted a growing number of businesses to find more ethical, sustainable ways to be successful.

\r\n

Here's how sustainability is transforming business all the way from the consumer to the investor.

\r\n

Consumers are supporting their values with their credit cards.

\r\n

From the great straw ban of 2018 to the backlash against Nike's Kaepernick campaign, consumer spending is increasingly tied to personal beliefs about everything from environmentalism to fair trade to political loyalties. An Edelman study spanning eight countries found that 64% of consumers are belief-driven buyers, meaning \"they choose, switch, avoid, or boycott a brand based on its stand on societal issues.\"

\r\n

While it might feel polarizing to find your business on the downside of a controversial issue, it could be a boon for your business and your cause if your stance resonates with your customer base. In fact, 89% of consumers are likely to switch brands to one that is associated with a good cause, and 66% are even willing to pay a premium for more sustainable goods.

\r\n

Insincerity will get you nowhere, though. It's crucial to choose a mission or cause that you feel passionate about and can support through your business. If you choose well, your impact will feel like a natural extension of your business. Take Patagonia, for example. The company specializes in quality apparel and packs for outdoor sports and is one of the biggest proponents of environmental programs. Since 1985, Patagonia has given over $100 million to grantees supporting the preservation and restoration of natural environments. Supporting causes that tie in directly with its products enables Patagonia to raise awareness and share its good work without sounding inauthentic.

\r\n

Sustainability is changing how we do business.

\r\n

Ever heard of a B Corp? More than 2,500 companies in 64 countries are now certified B Corporations, meaning they meet standards of verified social and environmental performance, public transparency and legal accountability.

\r\n

The B Corp framework is often known as the triple bottom line (TBL or 3BL), a model that balances an organization's financial performance with its commitment to meeting social and environmental goals. This three-pillar approach – profit, people, planet – redefines how success is measured.  Meeting fiscal objectives isn't enough – a company must also make a positive impact on its staff, community, industry or even ecosystem.

\r\n

B Corps aren't just the hippies next door either. Ben and Jerry's, Kickstarter, Hootsuite, and Tom's of Maine are all B Corps. 

\r\n

But do B Corps perform as well as their less sustainable counterparts? You bet they do. An in-depth Nielsen study found that sales of consumer goods from brands with a commitment to sustainability grew more than 4% globally over the previous year, while brands without sustainable claims grew less than 1%. Sustainable companies also tend to perform better in a bear market: Although the S&P 500 lost 4.2% during 2018's volatile market, Barron's 100 Most Sustainable Companies lost just 3.2%.

\r\n

Investors are jumping on the bandwagon with ESG investing, a strategy centered on buying stock in environmentally and socially responsible companies. In early 2018, $11.6 trillion of all professionally managed assets were under ESG investment strategies. ESG investing continues to grow. An October 2018 Deutsche Bank study noted that managed ESG-focused assets are expanding at 20% each year, and BlackRock has predicted they will swell to $400 billion in the next 10 years.  

\r\n

Sustainability isn't just a corporate initiative. 

\r\n

It's time to go sustainable. And whether your business is big or small, there's no shortage of environmental causes, community organizations, and charitable opportunities to support. It's easier than ever to make a positive impact.

\r\n

The buy-one, give-one model popularized by companies like TOMS and Warby Parker has become a mainstay in sustainable organizations. Every time Handsocks sells a pair of mittens, the Virginia small business donates to Orphan's Promise. And Washington, DC-based Soapbox gives a bar of soap to a person in need for every bar purchased.

\r\n

If a one-to-one model isn't manageable at this stage of your business, start small and simply do what you can. There are countless ways to help your community or protect the environment: Sponsor a local sports team, donate items to a nonprofit, offer discounts for senior citizens, fund the new playground at your local park, switch out Styrofoam containers for paper-based products, organize a beach cleanup event, streamline your distribution processes to be more eco-friendly.

\r\n

The future looks green.

\r\n

There will always be differing opinions about how to start and grow a business, but one thing is certain: Implementing sustainable practices will never be wrong. Leaving a legacy of equality, environmentalism, and purpose for the next generation of business owners is a far better achievement than just hitting a lucrative bottom line.

\n","docType":"article","guid":"articles_4fc266577645da55f8c570945e6e221e","lastModified":"2019-05-23T12:00:00.000Z","published":"2019-05-23T12:00:00.000Z","structuredData":null,"subtitle":"Whether your business is big or small, it's easier than ever to make a positive impact.","template":"v1","title":"Sustainability Is Changing How We Do Business ... For the Better","type":"article","author":{"avatar":null,"bio":"Melissa Zehner is a Small Business Finance Editor at Lendio, the nation’s largest business lending marketplace. In addition to reporting on business finance trends, she studies the intersection of culture and business to find compelling stories about everything from grassroots movements to game-changing tech to government policy.","name":"Melissa Zehner","image":null,"slug":null,"social":{"facebook":"","linkedin":"https://www.linkedin.com/in/melissazehner/","twitter":null,"website":"https://www.lendio.com/"},"status":"enabled","title":null,"type":"New BDC Member","user":{"imagePath":"https://staging.business.com/images/uploads/user/profile/bb3063c8a59689aced6a566549c3b38aafde6.jpg","profile":{"company":"Lendio","jobTitle":"Senior Small Business Finance Editor","website":"https://www.lendio.com/"}}},"breadcrumbs":null,"channels":{"primary":{"name":"Business Basics","slug":"business-basics"},"sub":{"name":"Entrepreneurship","slug":"entrepreneurship"}},"meta":{"robots":"index, follow","description":"As consumer preferences shift toward sustainable products, businesses are embracing the B Corp model and finding ways to make a positive impact.","title":"4 Ways That Sustainability Is Transforming Business - business.com"},"parsedContent":{"toc":[{"id":"consumers-are-supporting-their-values-with-their-credit-cards","title":"Consumers are supporting their values with their credit cards."},{"id":"sustainability-is-changing-how-we-do-business","title":"Sustainability is changing how we do business."},{"id":"sustainability-isnt-just-a-corporate-initiative","title":"Sustainability isn't just a corporate initiative. "},{"id":"the-future-looks-green","title":"The future looks green."}],"json":[{"component":"p","children":["Patagonia. TOMS. Warby Parker. REI. Everlane. Sustainability has become almost synonymous with credibility in business. Consumers, investors and regulatory agencies are more demanding than ever before when it comes to socially and environmentally responsible business practices."]},{"component":"p","children":["The idea of going green to succeed in business is a relatively new one. In previous generations, it was enough to simply sell a quality product or service. Customers didn't ask about supply chains, livable wages or carbon footprints. Whether a company was run ethically was entirely up to its board of directors."]},{"component":"p","children":["This all changed once millennials began to flex their buying power. And, yes, millennials actually do have buying power – they may often be labeled as perpetually broke, but millennials make up one-quarter of our population and are ",{"component":"a","props":{"href":"https://www.accenture.com/us-en/insight-outlook-who-are-millennial-shoppers-what-do-they-really-want-retail","target":"_blank","rel":"nofollow"},"children":["expected to spend $1.4 trillion"]}," in 2020."]},{"component":"p","children":["While our nation's avocado-loving youth has been accused of killing everything from cereal to homeownership, millennials have undoubtedly ",{"component":"a","props":{"href":"https://www.nielsen.com/ma/en/insights/news/2015/green-generation-millennials-say-sustainability-is-a-shopping-priority.print.html","target":"_blank","rel":"nofollow"},"children":["brought sustainable business practices"]}," into the spotlight. Their penchant for living green and buying local, compounded with growing concerns about climate change and social equality, has prompted a growing number of businesses to find more ethical, sustainable ways to be successful."]},{"component":"p","children":["Here's how sustainability is transforming business all the way from the consumer to the investor."]},{"component":"h2","props":{"id":"consumers-are-supporting-their-values-with-their-credit-cards"},"children":["Consumers are supporting their values with their credit cards."]},{"component":"p","children":["From ",{"component":"a","props":{"href":"https://www.nationalgeographic.com/environment/2018/07/news-plastic-drinking-straw-history-ban/","target":"_blank","rel":"nofollow"},"children":["the great straw ban of 2018"]}," to the ",{"component":"a","props":{"href":"https://www.entrepreneur.com/article/321130","target":"_blank","rel":"nofollow"},"children":["backlash against Nike's Kaepernick campaign"]},", consumer spending is increasingly tied to personal beliefs about everything from environmentalism to ",{"component":"a","props":{"href":"https://www.sciencedaily.com/releases/2015/08/150827083653.htm","target":"_blank","rel":"nofollow"},"children":["fair trade"]}," to ",{"component":"a","props":{"href":"https://www.nytimes.com/2018/07/24/business/ivanka-trump-brand-clothing.html","target":"_blank","rel":"nofollow"},"children":["political loyalties"]},". An ",{"component":"a","props":{"href":"https://www.edelman.com/sites/g/files/aatuss191/files/2018-10/2018_Edelman_Earned_Brand_Global_Report.pdf","target":"_blank","rel":"nofollow"},"children":["Edelman study"]}," spanning eight countries found that 64% of consumers are belief-driven buyers, meaning \"they choose, switch, avoid, or boycott a brand based on its stand on societal issues.\""]},{"component":"p","children":["While it might feel polarizing to find your business on the downside of a controversial issue, it could be a boon for your business and your cause if your stance resonates with your customer base. 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The company specializes in quality apparel and packs for outdoor sports and is one of the biggest ",{"component":"a","props":{"href":"https://www.patagonia.com/actionworks/about/","target":"_blank","rel":"nofollow"},"children":["proponents of environmental programs"]},". Since 1985, Patagonia has given over $100 million to grantees supporting the preservation and restoration of natural environments. Supporting causes that tie in directly with its products enables Patagonia to raise awareness and share its good work without sounding inauthentic."]},{"component":"h2","props":{"id":"sustainability-is-changing-how-we-do-business"},"children":["Sustainability is changing how we do business."]},{"component":"p","children":["Ever heard of a B Corp? 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This three-pillar approach – profit, people, planet – redefines how success is measured.  Meeting fiscal objectives isn't enough – a company must also make a positive impact on its staff, community, industry or even ecosystem."]},{"component":"p","children":["B Corps aren't just the hippies next door either. Ben and Jerry's, Kickstarter, Hootsuite, and Tom's of Maine are all B Corps. "]},{"component":"p","children":["But do B Corps perform as well as their less sustainable counterparts? You bet they do. An in-depth ",{"component":"a","props":{"href":"https://www.nielsen.com/content/dam/nielsenglobal/dk/docs/global-sustainability-report-oct-2015.pdf","target":"_blank","rel":"nofollow"},"children":["Nielsen study"]}," found that sales of consumer goods from brands with a commitment to sustainability grew more than 4% globally over the previous year, while brands without sustainable claims grew less than 1%. Sustainable companies also tend to ",{"component":"a","props":{"href":"https://www.barrons.com/articles/these-stocks-are-winning-as-ceos-push-for-a-sustainable-future-51549657527","target":"_blank","rel":"nofollow"},"children":["perform better in a bear market"]},": Although the S&P 500 lost 4.2% during 2018's volatile market, Barron's 100 Most Sustainable Companies lost just 3.2%."]},{"component":"p","children":["Investors are jumping on the bandwagon with ",{"component":"a","props":{"href":"https://www.fool.com/investing/2019/04/03/what-is-esg-investing.aspx","target":"_blank","rel":"nofollow"},"children":["ESG investing"]},", a strategy centered on buying stock in environmentally and socially responsible companies. In early 2018, ",{"component":"a","props":{"href":"https://www.ussif.org/files/2018%20_Trends_OnePager_Overview(2).pdf","target":"_blank","rel":"nofollow"},"children":["$11.6 trillion"]}," of all professionally managed assets were under ESG investment strategies. 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There are countless ways to help your community or protect the environment: Sponsor a local sports team, donate items to a nonprofit, offer discounts for senior citizens, fund the new playground at your local park, switch out Styrofoam containers for paper-based products, organize a beach cleanup event, streamline your distribution processes to be more eco-friendly."]},{"component":"h2","props":{"id":"the-future-looks-green"},"children":["The future looks green."]},{"component":"p","children":["There will always be differing opinions about how to start and grow a business, but one thing is certain: ",{"component":"a","props":{"href":"https://www.forbes.com/sites/forbesbusinessdevelopmentcouncil/2018/05/30/why-your-company-should-be-more-socially-responsible/#2979fd1c2c32","target":"_blank","rel":"nofollow"},"children":["Implementing sustainable practices"]}," will never be wrong. 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