Sustainability has become a global imperative that businesses must embrace, not only to align with regulatory and consumer expectations but also to ensure long-term success for all businesses – from international enterprises to SMEs.
A driving force in this shift is the increasing impact of climate change, from extreme weather patterns and fluctuating temperatures to rising energy costs and increasing global inflation. The growing awareness of these issues has led to consumers becoming more mindful of the businesses they support.
Consumers are increasingly prioritizing sustainability when making purchasing decisions. When making purchasing decisions, 54% of global consumers consider a company’s corporate social responsibility practices, and 55% are willing to pay more for sustainability. This shift in consumer behaviour highlights an opportunity for businesses to not only make sustainable choices but demonstrate genuine commitment to sustainable practices.
Sustainability is a powerful driver for meaningful change as various studies have shown a strong correlation between corporate sustainability and financial performance. For example, an analysis of Swedish companies found positive correlations between sustainability measures (such as Dow Jones Sustainability Index) with return on assets, return on equity, and earnings yield.
Understanding Sustainable Positioning and Actions
Sustainable positioning is the practice of aligning branding with sustainability in a way that resonates deeply with organizational core values and business principles. It’s not just about offering eco-friendly products; it’s about embedding sustainability into every aspect of the business—internally and externally.
Sustainable positioning should reflect what an organization truly stands for. Whether it’s reducing environmental impact, improving community well-being, or championing social causes – the brand’s identity should align with its sustainability mission, making those values clear to customers, employees, and stakeholders.
A sustainable company considers the effects of its operations on employees, the environment, and society. The United Nations’ Sustainable Development Goals provide a global framework to guide businesses towards meaningful action. These goals cover areas like climate action, responsible consumption, and gender equality, giving companies a concrete set of targets to aim for.
Some examples of sustainable actions within a business might include:
- Selling waste as raw materials
- Transitioning to renewable energy sources
- Ensuring energy-efficient premises
- Partnering with suppliers who adhere to sustainable practices
- Investing in community projects such as tree planting or hunger alleviation
- Providing healthy and locally sourced food in the workplace canteen
These actions not only contribute to environmental preservation but also improve employee satisfaction and retention by creating a workplace that values sustainability.
From Sustainable Actions to Sustainable Positioning
According to the WEF, 90% of executives believe sustainability is important, but only 60% of organizations have sustainability strategies. This discrepancy is partly due to a lack of sustainable positioning. Take, for example, PostNL, which operates with net-zero CO2 emissions. While their sustainability practices are commendable, their failure to position themselves clearly on sustainability means that many customers are unaware of their efforts.
While large companies have started to embrace sustainability in their positioning, many SMEs still hesitate due to concerns about the costs associated with sustainable business practices or the uncertainty about how to navigate this space. However, adopting sustainable practices is no longer optional; it’s becoming a necessary part of staying competitive.
As sustainability claims grow more common, so do the risks of greenwashing—making misleading claims about a company’s sustainability practices. Misleading terms like “eco-friendly” or “green” without substantiated proof can undermine consumer trust and invite legal scrutiny.We’ve previously explored the various legislation and regulatory requirements that have been implemented to prevent greenwashing. But to keep things simple, businesses can avoid potential fines and reputational damage by ensuring they back up sustainability claims with clear evidence, data, and certifications. Substantiating sustainability statements is critical to remaining compliant and operating transparently for the sake of regulators, investors, consumers, and other key stakeholders.
Building Trust through Transparent ESG Messaging
One of the most effective ways to build trust with customers and investors is through transparent Environmental, Social, and Governance (ESG) messaging. By communicating your sustainability efforts clearly and honestly, you can demonstrate a genuine commitment to a sustainable future.
It begins with a clear definition of sustainability, which means engaging stakeholders early to define what sustainability looks like in specific contexts and projects. Whether it’s reducing carbon emissions, improving social equity, or conserving natural resources, crafting a tailored definition ensures all stakeholders are aligned on expectations and goals.
Transparency is critical in building trust with stakeholders. Regular updates and transparent reporting on sustainability progress help keep everyone informed and hold the business accountable for its commitments. Reports, public statements, and meetings are important avenues for sharing successes and challenges. This open approach strengthens credibility and demonstrates a genuine commitment to sustainability.
Aligning sustainability practices with widely recognised external standards enhances the legitimacy of organisational efforts. Standards such as ISO 26000 (on social responsibility) or GRI (Global Reporting Initiative) help frame sustainability in a way that meets global expectations. When stakeholders see that a company adheres to credible frameworks, it reassures them that the business is taking responsible, effective action.
Engagement is not a one-time effort; it’s an ongoing process. Building lasting relationships with stakeholders ensures that sustainability efforts remain dynamic and continue to evolve. Regularly engaging with stakeholders fosters trust and loyalty, reducing risks and unlocking opportunities for long-term operational success. These strong relationships also open the door for collaboration, partnerships, and collective action that ensures alignment between sustainability practices and ESG messaging.
Employee Engagement in Sustainability
Employees are central to driving sustainability from within an organisation. Their involvement not only aligns with corporate values but also enhances the effectiveness of sustainability initiatives.
Employees are more motivated when they see how their work contributes to a larger mission, such as environmental stewardship. A clear connection between individual roles and organisational sustainability goals fosters a sense of pride and purpose.
Sustainable practices make employees proud to work for their company, strengthening loyalty and creating a deeper sense of belonging. When employees believe in their company’s commitment to sustainability, they’re more likely to stay engaged and committed.
Purpose-driven work fosters creativity. When employees are aligned with sustainability goals, they actively participate in finding innovative solutions and contribute ideas that push the company toward more sustainable practices.
To drive a sustainable workplace culture, businesses must empower their employees to take ownership of sustainability initiatives. Practical approaches include:
- Green Office Initiatives – Encourage recycling and sustainable commuting options like bike-to-work programs. Make these practices easy to participate in by setting up designated areas and clear instructions.
- Volunteering and Community Engagement – Organise activities like tree planting or local clean-ups and offer paid volunteer days to make participation accessible.
- Gamifying Sustainability Goals – Turn sustainability into a fun competition by tracking energy savings or waste reduction. Offering rewards and recognition to teams that meet their goals ensures ongoing engagement in sustainability.
- Provide Sustainability Training – Offer workshops on sustainable practices and make learning materials accessible for employees to continue their education on environmental and social issues.
Aligning Strategy, Communications, and Engagement
For businesses to thrive sustainably, they must integrate sustainability into their core strategies, engage employees, and maintain transparent communication with all stakeholders. By following best practices in stakeholder engagement, fostering a culture of purpose-driven work, and showcasing sustainability achievements, businesses can build trust, enhance brand reputation, and ensure long-term success.
Adopting a sustainable business model is not just about making ethical choices; it’s about embedding sustainability into the company’s DNA – from the way it communicates to the way it operates. This transformation, while complex, is crucial for businesses aiming to succeed in an increasingly eco-conscious world.
For SMEs looking to build their market position, sustainable positioning offers a powerful opportunity to align values with branding, engage customers in meaningful ways, and drive long-term growth. By being authentic, transparent, and committed to sustainability, businesses can create a meaningful impact on both the environment and the bottom line.
Embrace sustainability not just as a strategy but as a core principle that shapes the future of your business. Whether you’re taking small steps or making bold moves, sustainable positioning is all about making genuine commitments, following through, and celebrating progress with your stakeholders.
