Per this article, sustainability can impact profit in at least these nine ways. We like the article, but take the points further:
- Lower costs – Although the article does not give a percentage, a study by BAR shows 99% of certified sustainable companies under our standard enjoy lower costs.
- Increased revenues – The article talks about green buildings, but a better study, by Unilever, shows sustainable brands within the same parent organization exceeding their non-sustainable peers by a +30% revenue increase. More recent studies show the gap being larger.
- Higher capital value – Again, the article talks about real estate, but a BAR study of businesses shows a +11% increase in EBITDA for certified sustainable companies. Conservative trading multiples of 4x – 8x would deliver a 44% – 88% value differential between certified sustainable companies and their non-certified peers.
- ROI – The article included ROI with capital value and did not give a number. MIT did a study that shows a +67% investor ROI increase for certified sustainable companies versus their non-certified peers.
- Leveraging broadband investment – The article speaks to this but we will not, as it is not a relevant issue for most businesses.
- Brand – Now we are getting somewhere with the article, as it talks about sustainable brands outperforming their non-sustainable peers by 120%. NYU/Stern says it is 7x. Symbola put the number at 20x.
- Customer engagement – The article speaks to longer customer visits in retail stores, but gives no hard study data. We have received reports back from our clients (however, this is a small sample size and certainly not a tight research study) on how their conversations with new prospects are over twice as long and produce (an average over the clients reporting) a 6x conversion to a follow on discussion when they incorporate their sustainability certification status early in the presentation. Again, this is not a large, 3rd-party-run study.
- Recruiting – The article talks about younger workers caring about an employer’s reputation. We have reported on multiple studies that show +60% of all prospects want to work for a certified sustainable company. That new hire may accept your job offer, but if you are not certified sustainable, odds are they will not stay, costing you the time and money of hiring/training.
- Health and wellness – The article talks about energy-related items positively impacting health and wellness. We take it much further and an entire part of our service (A Better World Starts With Me and Gym For The Brain) focused on the performance, health and happiness of your employees, which helps drive profitability.
The data supporting sustainability driving higher profits is consistent, strong and from many sources.
If you are interested, read this on what you want in a sustainability program, watch this master class, and contact us