Sustainable business practices are aimed at creating long-term value for stakeholders, including customers, employees, shareholders and the community, while ensuring that natural resources are conserved and protected for future generations. More and more companies today are embracing this triple bottom line concept (People, Plant and Profit), recognizing that there is room to realize business advantages along with social and environmental benefits, as an analysis by the Harvard Business Review points out.
But how can a company, and especially a small-medium sized one, achieve that? And why should a business choose a green approach?
Small and medium-sized enterprises (SMEs) play a vital role in the global economy, contributing to job creation and economic growth.
SMEs account for 90% of businesses worldwide and more than 50% of global employment.
In Europe, such statistics are even more impacting as SMEs represent 99.8% of private companies and more than 60% of employment.
Climate change poses significant risks to businesses around the world. Extreme weather events, such as floods, droughts, and hurricanes, can disrupt supply chains and cause widespread damage to infrastructure. Rising sea levels can threaten coastal properties and infrastructure, while increasing temperatures can impact worker health and productivity. Failure to address these risks by companies leads them to lose market share and profits, as consumers and investors demand more environmentally responsible practices.
The concept of green procurement refers to the acquisition of products with a reduced environmental impact, which provides the same or improved function and performance but are less harmful to human health and the environment.
It involves the use of materials with a low environmental impact and that are more sustainable, as well as the implementation of practices that promote sustainability and the choice of the less impacting option of sourcing and production.
In the early days of sustainability, many companies viewed it as a regulatory compliance issue. Businesses would do the minimum required to meet environmental standards and then move on, without giving much thought to how sustainability might actually benefit their operations.
The banking sector has a transformative role to play as a catalyst and enabler of a systemic acceleration towards a more sustainable economy, with the challenging mission of rapidly inducing change in consumer, lender and investor behaviour, and perhaps more importantly, in the broader society as a whole. The Horizon 2020 Energy Efficient Mortgages Initiative (EEMI) Bauhaus model is intended to support this process and build a new methodological approach to propose a strategic harmonic roadmap to accelerate the green and social transition.
Synesgy's success are the dedicated questionnaires, which are based on timely and rigorous references of global ESG market regulations such as UNGC, GRI, UN 17 SDGs, EBA LOM, and EU Taxonomy for Sustainable Activities.
There is no doubt that environmental, social and governance (ESG) investments will be the dominant theme of the financial sector and markets over the next decade. About one-third of all assets under management, or $35 trillion of assets under management worldwide, use some form of sustainable investment strategy.
Compared to SMEs, under Directive 2014/95/EU, large companies have several more pieces of information to publish related to environmental and social matters,treatment of employees and respect for human rights, anti-corruption and bribery diversity on company boards (in terms of age, gender, educational and professional background).