Competitive advantage: corporate sustainability

Kik, the textile discounter par excellence, proclaims to act sustainably. [1]

Background: In contrast to other textile giants from Adidas to Gucci, everything on Kik ends up on sale. All items are discounted until they are sold. This means that there is no surplus product that is incinerated or ends up as river waste. What kind of signal does this send for other companies in different industries? It is high time for companies to address their own sustainability efforts. Because sustainability is not just a trend. It opens up much more opportunities that have a positive effect on your company and the world in the long term. Let's take a look at the status quo together and why it's worthwhile making corporate sustainability an integral part of your corporate strategy.

‍Energy efficiency & Co. — the reasons for greater sustainability

The responsibility that rests on the shoulders of companies cannot be underestimated. Society's expectations are decisive, as they make a major contribution to sustainable development. The reasons for dealing with this do not only exist from the legal side. Regulatory obligations are one thing, growth, future prospects, demands from customers, employees and stakeholders, and the other. The integration of sustainable business practices, for example, meets customer expectations, which can only strengthen customer loyalty. Companies are also fulfilling their social responsibility by acting and doing business in a sustainable manner. And which company is not happy about falling costs and the efficient use of resources?

According to a recent study, 33 percent of companies in Germany have already implemented sustainability projects. [2] However, this does not mean that they are automatically successful. Success depends on external conditions, the determination of companies and the commitment of employees. Crisis-related scarcity of resources and energy, as well as supply chain disruptions, are weighing on companies across national borders. The motivation to intensify sustainability goals in the company is correspondingly high. While the goal of improving energy efficiency is at the top of the list, external regulatory requirements, such as the Corporate Sustainability Reporting Directive (CSRD), play a subordinate role:

The ranking varies by sector. But all the companies surveyed have one thing in common: They are striving for Net-Zero, i.e. the rapid achievement of climate and greenhouse gas neutrality. On average, they expect this to be achieved by 2030 at the latest.

‍Take responsibility — ecologically. Economically. Socially.

“The influence of the economy and that of companies on human life and on the ecosystem of planet Earth is significant, and their responsibility is correspondingly high.” [3]

Corporate sustainability is more important than ever; there is no alternative to it. Companies are not only an essential part of the economic cycle, closely linked to suppliers and the state, they are above all social systems and social actors. They are employers, training centers, producers, service providers and cooperation partners. They are important players in all three dimensions of sustainability: social, ecological and economic.

In order to integrate the issue across the company, management in particular plays an important role as the main driver.: “If a change is to be implemented quickly and also persist, it is not effective to simply arrange it. The commitment should come from management, be credibly communicated and lived authentically (“walk what you talk”) so that there is a green “spill-over effect” (transfer effect) on employees and can thus find its way into the corporate culture.” [4]

Managers should set a good example, but an understanding of corporate sustainability among all employees is also crucial. Professional development, for example through sustainability training, is a decisive factor for employees to gain this understanding. This is the only way to actively practice sustainability in the company.

‍Avoiding managers as a bottleneck

Managers in all departments play a key role when it comes to promoting and establishing corporate sustainability. They can serve as role models and multipliers that employees are guided by. However, good and committed managers are a rare asset that is usually already entrusted with many tasks and has to face a variety of challenges. Companies are required to find multipliers across the workforce and at various levels of hierarchy, so that responsibility for change processes can be distributed across multiple shoulders.

‍Sustainability as a competitive advantage

For a long time, sustainability initiatives were seen less as a basis for competitive advantages and more as a cost driver or marketing tool. But the benefits are obvious:

1. They meet the demands of customers.
2. The reporting requirement on ESG issues for capital market-oriented companies will be provided for sooner or later by the EU action plan.
3. Companies that are committed to sustainability, drive innovations and thus open up new business opportunities have an enormous competitive advantage.
4. Investors demand funding for sustainable projects
5. They meet market requirements by gradually expanding portfolios and offerings. After all, competition stimulates business — and it never sleeps.
6. Focus on employees: Within and outside the “green” sector, there is a shortage of skilled workers and career starters also have expectations: According to a study by the European Investment Bank, sustainability plays a role in choosing an employer for just over fifty percent of young professionals. [5]
7. They retain employees through environmentally friendly and socially responsible action.

Seize the moment: benefit from sustainable business

If even a company that is particularly known for its low prices wants to solve one of the biggest sustainability problems in the textile industry, it becomes clear that investing in sustainability is worthwhile. Building a sustainability strategy means a significant competitive advantage. Responsibility does not only lie with management, but should be distributed across all levels. However, employees must also develop the appropriate understanding of this. One way to do this is through e-learning and training on all topics related to sustainability: from social to economic aspects. Companies that regard sustainability as part of their DNA can thus be successful in the long term and increase their attractiveness for customers as well as investors. It is high time for all companies to reconsider their sustainability efforts and actively commit themselves to a better future.

The good news: Your company is on the road to greater sustainability in good company. On your way, you will find various companions and preparers, such as the Haufe Academy. Discover how you can grow sustainability in your company and with our digital solution, the Sustainability College, promote your employees' understanding of sustainability and the resulting competitive strength of your company.  

sources

[1] https://www.zeit.de/2023/37/kik-nachhaltigkeit-textilindustrie-abfall

[2] Horváth study on the status quo of sustainability transformation in 2023.

[3] Kambly, 2016.

[4] Lichtenthaleru. Fronapfel: Sustainability as a competitive advantage, 2022.

[5] https://www.eib.org/de/press/all/2023-123-81-of-young-germans-say-the-climate-impact-of-prospective-employers-is-an-important-factor-when-job-hunting