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Commercial Question

The business case for sustainability

updated on 10 November 2020


How can making a business more sustainable be beneficial?


Encouraging businesses to become more sustainable not only benefits the environment, it can also have benefits for the business itself. From higher retention rates and reduced costs, to increased profit margins, it can be a real win-win. This article explores why this is the case and what firms can do to increase their sustainability.

What it means to be a sustainable business

A sustainable business is one that does not have a negative impact on the local or global environment, or the society within which it sits. Sustainable businesses will often incorporate principles of sustainability into business decisions and commit to environmental principles within their business operations, as well as supplying environmentally and socially friendly products or services where possible.

The importance of becoming a sustainable business

Individuals and organisations are becoming more conscious of the environment and the impact their decisions have on the planet. As a result, they are increasingly choosing to look for sustainable businesses that can supply them with the goods and services they require to help them reduce their impact on the environment. In order to keep up with their competitors, businesses may need to start considering how the provision of their goods and services, and their ethos and practices, meet the sustainability test.

A recent study found that, since 1988, just 100 companies are responsible for more than 70% of the world's greenhouse gas emissions. If businesses start taking responsibility for their impact on the environment, we can take big strides toward a greener planet. The drive of businesses collectively will have a vast impact on the environment and will enable and encourage individuals to make changes more readily.

Benefits of becoming a more sustainable business

By becoming more sustainable, businesses can reduce business costs and, as a result, increase profitability. For example, using more efficient lighting, reducing waste and reusing existing materials can all contribute to a reduction in business expenses. Unilever claimed that its portfolio of 26 sustainable brands, including Dove, Lipton, Knorr and Vaseline, grew 46% faster than the rest of its business in 2019. This shows the benefit that sustainability can have on business growth.

Customers and clients are increasingly looking to invest in, and work with, businesses that value sustainability. By increasing a business's sustainability, the business can also benefit from a stronger, positive reputation and increased customer and client base. This, in turn provides the business with a competitive advantage.

Law Firms and Sustainability

The Chancery Lane Project is an initiative which encourages lawyers, law firms and their clients to come together to tackle climate change. The people behind the project state that "no one organisation can solve the issue alone, the challenges are too big, complex and interconnected". With lawyers working together and with their clients, they are able to initiate changes which will have a wide-reaching positive impact.

The project aims to provide practical legal solutions to reverse climate change by collaborating with lawyers and businesses. As part of this aim, it supports the UN's Sustainable Development Goals relating to climate action and the UK's emissions reduction target to reach net zero by 2050, which is now enshrined in law. The project looks to empower and encourage businesses to transition to net zero emissions. 

How can businesses become more sustainable?

The Chancery Lane Project's playbook includes a huge number of suggestions for helping businesses become more sustainable. Incorporating green initiatives within employment contracts, such as the provision that an employee can take paid sabbatical leave if they undertake volunteering activities at an environmental organisation during this period, can have significant environmental impacts.

Ensuring that loans, construction projects, new developments and acquisitions are linked to a culture of sustainability can have a wide-reaching effect on the business’s impact on the environment. One way of creating this culture is to incorporate a net zero and sustainability clause into staff handbooks, so that these issues permeate all levels of the business and encourage the development of a green ethos and a net zero culture within the business.

What are businesses doing to become more sustainable?

Royal Mail has added 190 electric vans to its fleet in order to reduce emissions, and is also trialling the use of e-trikes, which are solar-powered delivery tricycles. This has the potential to drastically reduce the greenhouse gas emissions of one of the nation's biggest delivery companies.

Marks & Spencer sources all its cotton sustainably and has a plan to reduce its use of single-use plastic. With the passion for reducing plastic waste that has been generated by the 'Blue Planet effect', this will help Marks & Spencer to continue to attract customers to its shops.

McDonalds is working with franchises to reduce its carbon emissions and is investing in renewable energy and energy-efficient kitchen equipment. McDonalds aims to ensure that, by 2025, all its packaging will come from renewable, recycled or certified sources.

Some businesses are also working within their offices to improve their impact on the environment, while encouraging employees to do the same. Positive changes can include:

  • encouraging staff to ensure that all computers and lights are turned off, and all windows and doors are shut, at the end of the day;
  • switching to renewable energy sources – not only is this better for the environment, it can also reduce costs;
  • changing lights within the office to LED or CFL to reduce energy consumption;
  • purchasing recycled office supplies;
  • installing recycling points across the office;
  • encouraging staff to travel into work in a greener way; and
  • moving to greener products and packaging within the cafeteria.

The global coronavirus pandemic has upended modern business across the board and forced business leaders to re-evaluate their business practices. While this has clear and obvious drawbacks, it also represents a unique opportunity for businesses across the globe to redesign themselves in a more sustainable way.

From increasing the use of virtual meetings and embracing a work-from-home culture, to reviewing and overhauling the entire business strategy and supply chain, firms across the country are now able to make significant changes that could, in the long-run, lead to a vastly reduced environmental impact.

It will be for future generations to decide how effectively we rose to the environmental challenges we are currently facing and we all need to do our part to ensure the ongoing sustainability of our way of life.

Valerie Bond is a solicitor in the employment team at Michelmores.