Investing in a sustainable future
Updated: 4 days ago
Author: Duc Huy Nguyen
Date of Publication: 08/04/2023
Sustainability is a concept that has been gaining attention in recent years. Apart from that, it's becoming increasingly important for businesses to incorporate and align themselves with Sustainable Development Goals (SDG goals).
More specifically, sustainability is a way to meet your current needs without affecting future generations to meet theirs. It looks at the long-term potential of a company instead of focusing on short-term gains. So, sustainable practices can help businesses become more efficient and reduce their environmental impact.
By investing in sustainable businesses, investors can help support companies that are making an effort to improve their sustainability practices. In fact, sustainable investing can help businesses become more environmentally conscious and in turn, help reduce the global environmental footprint. Therefore, sustainable investing is becoming increasingly popular and more accessible to everyday investors.
Why companies should incorporate sustainability in their strategies
A new upcoming world
The growing population of Millennials and Gen Z are more sustainable-minded than the
previous generations. This is according to a survey done by Nielsen. In particular, this
generational shift in attitude presents an opportunity for companies to increase their brand value. What’s more, they can gain a competitive advantage. So, companies that have incorporated sustainability into their business models and governance can see benefits in the long run.
Another benefit that is shown by a study done by Nielsen indicates that customers are willing to spend more on a sustainable product. Many companies caught on to this trend and started to formulate their sustainability strategy. Thus, this is a long-term investment. However, not investing in a sustainable future might translate into a bigger loss in the long term. As the world is faced with overexploitation.
It cost less in the long run
Companies that are formulating their sustainability strategy often identify ways to become more efficient. Not only can they reduce costs, but they can increase operating profits. In fact, they can do so, up to 60%, by identifying ways to lower energy and water consumption.
Improves shareholders relationships
More advantages to being more sustainable can mean improving your shareholders'
relationships. For example, this could be the local community and the government. Actually, this benefits you in return as you might obtain tax incentives and subsidies.
Furthermore, a company's sustainability attracts millennials to work for them. So not having a good strategy might result in the loss of future talents. Therefore, sustainability has many economic benefits for companies. So, investing in more sustainable companies might benefit your wallet as well.