6 Reasons Investing in Sustainability is Key to a Secure Future (2024)

Meet legal demands (local, regional & international)

Today regional organizations are implementing measures to standardise and integrate the varying sustainability and environmental regulations from across the world. With the new European Green Deal, all member states have to follow disruptive environmental directives. The Renewable Energy Directive requires that by 2030 40% of their energy production comes from renewable sources. Globalization won’t be of any help to countries reluctant to obey the European law as the EU has already put a carbon price on imports to compel disinclined countries to come round. As a result, the whole market is affected, and both public and private companies are faced with the choice of taking concrete action to reduce their carbon footprint – which can require a fast turnaround – or risk paying the price. A decision that becomes all the more pressing when you consider how many stakeholders, from clients to suppliers, will evaluate their future business behaviour against these new rules to only support compliant companies.

Relocate costs, save money

When companies try to find ways to reduce their impact they start questioning their consumptions, processes and naturally implement optimization and rationalization strategies. In that way sustainability is strongly linked to cost optimizations, and thus money saving. When it comes to Green IT, which consists of approaches to reduce the global CO2 footprint of IT of a company, specialists sometimes need to apply a FinOps approach. Indeed, to reduce the footprint, first they need to identify the impact on each scope (1,2,3) but some may be blurry, as for data centers footprint for instance. As hyperscalers don’t provide companies with a clear vision of their data centers’ impact on scope 3 the only other way to get the information is to calculate it with a Finops approach. Because of the link that exists between cost and consumption. The more we consume the more we pay for what we consume. Based on this approach, the IT department will try to find out where they pay the most to identify where they consume the most and thus have the biggest CO2 impact. By cutting or reducing this expenditure item they will also reduce their CO2 footprint (not always proportionally but still).

Meet stakeholders’ demands & new needs

More and more organizations are starting to realize the wider impact of not acting more sustainability. One company even estimated that if it hadn’t acted proactively when investing in sustainability initiatives, it could have lost 10% of customers that demand sustainability data in their renewal contracts.” (“Assess Your Own Sustainability ROI,” Forrester research). Similarly, all stakeholders are increasingly conscious of the impact of their consumption choices on both society and the environment.

Be attractive to your employees and new candidates

In addition to meeting new desires from clients and stakeholders, companies also need to take candidates and employees’ desires into consideration.They need to understand what their candidates are looking for to better attract them, but also what their current employees need to be fulfilled in their work environment to retain them. These desires are really different from one generation to another but various studies show the growing importance of “purpose” and sustainability in the population. It seriously concerns the millennials whom two in three would be ready to quit their job if they don’t find a purpose (beyond profit) in their position (The 2016 Deloitte Millennials study), but it’s a broader tendency when it comes to value. If people from the other generation would not quit their jobs “for sustainability” they are more and more aware and attentive to companies’ plans for sustainability. Think about the millennial’s parents, they are being educated by their children every day on Sustainability. Their children are being taught how to recycle waste at school and then they show their parents, making them feel guilty if they do not put the plastic bottle in the right bin!

Let sustainability initiatives fuel innovation

“The whole history of humanity shows that it is when it is confronted with considerable constraints that it achieves the appropriate changes, in particular technological and cultural,” wrote Jacques Attali, a famous French economist, for the “Investir, Les Echos” newspaper. Sustainability standards, achieved through social, environmental and economic constraints, force people and companies to innovate and create value. The Forrester research “Factors driving the ROI of sustainability” gives us concrete examples on the tech side: “From the use of automation and machine learning, which limits human intervention on the factory floor, to recapturing heat in a data centre, sustainability and decarbonization initiatives can lead to innovative internal R&D. Efforts to meet sustainability goals have resulted in breakthroughs in optimising cooling systems, power, water usage, and networks”. But constraints are only the starter buttons; companies need the right engine to fully support their change of direction. And this powerful tool is technology. As we’ve touched upon already, a growing number of start-ups have already developed tech solutions to reach their Sustainable Development Goals (Edtech, Healthtech, Cleantech).

Become resilient

Each year the Earth Overshoot Day (EOD) the date marking when humanity’s resource consumption for the year overtakes Earth’s ability to regenerate those resources – comes round earlier. And, with this date falling on 29 July this year, this means that for the last five months of 2021 we’ll be going even further into the red. As global resources keep decreasing, the stark dilemma facing all our planet’s stakeholders is adapt or die. At an individual level it means we must all change and streamline our consumption. But to achieve the UN’s universal Sustainable Development Goals and, ultimately, survive, the market must evolve towards a more sustainable economy. If the current trend continues, the only companies which will survive and thrive are those who have rethought their products, adapted their business model and introduced more circular economy practices to respect the planet’s limited resources. In other words investing in sustainability is the only path towards economic resilience.