There’s no doubt that sustainability expectations of brands and businesses are increasing rapidly to match the urgency of the climate crisis, with 81 per cent of Australians believing that businesses have a responsibility to improve social or environmental issues.
Most small-business owners know that taking responsibility for their company’s environmental impact is the ‘right thing to do’, however, there are also a number of commercial benefits of building a brand that’s known for its sustainability credentials.
Here are three key benefits that building a climate-conscious brand can have on small businesses that extend past saving the planet.
It helps attract and retain employees
Every small-business owner right now is acutely aware of how tight the talent market is, both in Australia and abroad. In this environment, keeping good staff and being able to attract new talent is critical to every SME’s success. At least 60 per cent of employees want their employers to take action on social and environmental issues like climate change. Building a climate-conscious brand can help staff feel a higher sense of purpose which in turn can be a key driver of employee engagement, and can lead to higher retention levels. It is, therefore, important that businesses demonstrate their commitment to climate action today if they want to attract and retain the best talent employees for tomorrow.
It supports selling
It shouldn’t come as a surprise that customers are also increasingly taking a brand’s sustainability credentials into account before making a purchase. It is estimated about 78 per cent of Australians consider a brand’s social and environmental impact before making a purchase, and people reward those brands that are acting by making purchases.
When it comes to sustainability, be transparent about what the business is doing to help and why it is doing it. Don’t be afraid to openly communicate where you’d like to improve on your efforts and what you’re doing to work on those areas alongside celebrating your successes. You’ll find that honest communication helps build trust which in turn, builds more credibility leading to customer loyalty.
It future-proofs your business as a preferred supplier
In recent years, banks, private and institutional investors have all introduced requirements for their portfolio companies to report on their carbon emissions and climate-related exposure. This is something that is likely to become commonplace in the next few years, with businesses prioritising working with suppliers who are measuring, reporting and reducing their emissions. This inevitably impacts SMEs who sit within the value chains of larger companies (contributing to what we call ‘Scope 3’ emissions) because in order for large businesses to achieve their emissions reduction goals, they will need their suppliers to be decarbonising their operations too. It is, therefore, wise that small-business owners get on top of emissions today, rather than leaving it to the last minute, in order to remain a preferred supplier.
For small businesses with limited time and resources, it might sometimes feel like the bar for what a ‘good’ climate-conscious brand is constantly being raised and will forever be out of reach. However, there are an increasing number of tools and resources available to small businesses to help them build climate action into their brand. The businesses that evolve and build climate credentials into their offering are the businesses that will thrive in the future.
