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Ten business values of sustainable development

2020-06-28

131

On May 19, 2020, JD founder Liu Qiangdong announced in an internal letter to employees: JD’s mission has been upgraded to "technology-based, committed to a more efficient and sustainable world." Liu Qiangdong put forward in the letter: Looking forward to the future, JD will take technology as the cornerstone, pursue the greatest social value as the goal, and uphold the long-term principle to create a sustainable world together.

In fact, more and more business organizations are now upgrading sustainable development to corporate mission vision or integrating into development strategies. In August 2019, at the Business Roundtable (Business Roundtable), a US business organization, 181 CEOs of top US companies jointly signed the "Company Mission Statement", which redefines the company’s operating mission and declares: shareholder benefits It is no longer the most important goal of an enterprise. The first task of an enterprise is to create a better society. In October 2019, 16 companies including Alibaba Group, China Three Gorges Group, Yili Group, Esquel Group and other 16 companies jointly launched the "Sustainable Development Enterprise Action Initiative", promising that the chairman or CEO will be the main promoter, The concept of sustainable development is incorporated into the company’s business development strategy, and sustainable development is implemented in business activities to deliver long-term value of sustainable development to achieve a better future for the company, the community, the country and the planet. In November 2019, Tencent announced a new mission and vision, namely "user-oriented, technology for good", emphasizing that in action, "everything is based on user value, and social responsibility is integrated into products and services." "Promote technological innovation and cultural inheritance, help upgrade all walks of life, and promote the sustainable development of society." In 2019, ING conducted a survey of 210 US corporate finance executives. The results showed that: 81% of the interviewed companies have formulated a sustainable development strategy; 48% of the The company's revenue growth has had a positive impact.

So why are companies and corporate leaders paying more and more attention to sustainable development? In what ways can sustainable development bring value to enterprises? We know that sustainable development refers to “development that can meet the needs of contemporary people without compromising the ability of future generations to meet their needs”. For commercial enterprises, this means taking appropriate strategies and actions. While meeting the current development needs of enterprises and stakeholders, it is also necessary to protect, maintain and upgrade human resources and natural resources to meet the needs of the future development of enterprises. The implementation of a sustainable development strategy can bring value to the enterprise from at least the following ten aspects.

1. Reduce costs and reduce risks. I think that almost all companies are interested in controlling costs and gaining profits. Sustainable development provides a mechanism to reduce costs, that is, by reducing the consumption of resources (such as raw materials, energy, hazardous materials, human resources, water resources, etc.) ), improve process efficiency, reduce or eliminate waste, etc. to reduce costs and risks for enterprises. For example: Unilever's sustainable action plan, by reducing waste and reducing the use of energy, raw materials and natural resources, since 2008, cumulative savings in energy costs have exceeded 600 million euros. DuPont has saved 3 billion US dollars in 15 years by reducing energy use and reducing greenhouse gas emissions.

2. Protect production resources. More and more companies have realized that the raw materials that support their product production are being threatened. A key element of sustainable business practices is to promote the protection of resources to ensure the continuous operation of the company and obtain long-term value. For example, Natura, a well-known Brazilian cosmetics group, launched a sustainable business practice called the "Amazon Project" in 2011. This plan has protected 257,000 hectares of forests and also guaranteed the company’s raw materials. Purchase locally. In the seven years from 2010 to 2017, Natura has accumulated more than 1.2 billion reais (about 1.62 billion yuan) in local additional income.

3. Go beyond compliance and gain a leading edge. Nowadays, there are more and more regulations, regulations and standards that companies must comply with, and more and more fields, including pollution discharge, employee safety, product content, technical performance, labeling, recycling, and ecosystem protection. Sustainable business practices can prompt companies to actively seek new opportunities, take actions before the requirements of laws and regulations, and avoid the risk of passive reaction and punishment. In fact, the proactive actions taken beyond compliance may sometimes affect policy formulation and form technical barriers, giving the company an advantage and gaining more value.

4. Change image and enhance brand value. Sustainable development can highlight the relationship between the intangible and tangible values of an enterprise. Enterprises in any industry, regardless of their size, can change their corporate image and reshape their brand and reputation through real investment in environmental protection actions. For example, under Cook’s leadership, Apple has prioritized efforts to address climate change, make product materials more environmentally friendly, and help protect the earth’s resources, increase investment in environmental protection, and adopt renewable energy plans, closed-loop supply chain management, and Continue to develop a series of sustainable business practices such as forests, and implement environmental protection policies in energy use, product raw materials, supply chain management, product packaging, etc., making Apple one of the most environmentally friendly technology companies in the world. Apple’s market value is also determined by Steve Jobs. The US$300 billion of the times has risen to US$1.21 trillion today, a fourfold increase.

5. Seize new business and development opportunities. Mankind is facing global social and ecological problems such as climate change, resource depletion, environmental pollution, and social justice. Sustainable development can promote business innovation to solve these challenging problems and bring new business and development opportunities to enterprises. Research by the Business and Sustainable Development Commission shows that achieving the sustainable development goals in the four areas of food and agriculture, cities, energy and materials, health and welfare is estimated to bring at least US$12 trillion in market opportunities each year by 2030 , And create 380 million new jobs. The "Patrimonio Hoy" sustainable development plan initiated by the Mexican cement manufacturing company CEMEX has helped solve the social problem of low-income family housing in Mexico and South America, while also enabling the company to earn 15% per month. Around the growth of performance.

Sixth, meet consumer demand. Nowadays, there are more and more environmentally conscious consumers. They hope to buy products that can meet green standards and meet product needs. A survey conducted by Ipsos-MORI, a British polling agency, showed that more than half of the respondents said that "they are more willing to buy products and services provided by companies with a good reputation in environmental protection." In addition to consumers, more and more companies are also willing to conduct business with socially and environmentally responsible companies.

7. Improve stakeholder relationships. Consumers, investors, government agencies, financial institutions, non-governmental organizations, business partners, etc. increasingly require companies to provide information on sustainable development. This includes not only information on the company’s own operations, but also on suppliers, and sometimes It is even necessary to disclose the supplier's supplier information. Sustainable development strategies can encourage companies to be more willing to contact and listen to feedback from various groups and form partnerships with them, thereby reducing friction and conflicts with stakeholders and gaining social benefits for the development of new projects or other business activities. Approval or support makes it easier for companies to pursue and achieve their goals.

8. Attract and retain outstanding talents. Just as consumers express their choices by purchasing goods, more and more talented people are making career choices based on the corporate reputation of social responsibility and sustainable development. Recruitment service company Universal Monsters found in a survey: 80% of respondents said they are interested in work that has a positive impact on the environment, and 92% of respondents said they are more willing to serve environmentally friendly companies. A survey of its MBA students by the Stanford Business School also found that 97% of the students said that if they could work for a company with excellent social responsibility and ethical reputation, they would rather give up 14% of their expected income. More companies have realized this and are making sustainable development a priority, and doing their best to attract and retain outstanding talents, so as to improve their innovation and competitiveness.

9. Attract capital investment. Investors and shareholders are paying more and more attention to the sustainable development of companies. A survey of investors by PricewaterhouseCoopers shows that about 80% of respondents said that they considered sustainable development in their investment decisions in the past year Related issues. The investment bank Goldman Sachs Group's research on six industries, including energy, mining, steel, food, beverages, and media, found that those companies that are leading in environmental protection, society and governance have stock prices that exceed the stock market average by 25%. A survey of 210 financial executives of American companies by ING also shows that 65% of companies with a comprehensive sustainability framework have improved their credit ratings in the past two years. With the gradual popularization of socially responsible investment, the increase of industry standards such as the Dow Jones Indices, FTSE, Equator Principles, and the integration of environmental, social, and governance (ESG) issues into investment analysis, environmental and social indicators have become credit risk assessments As part of the standard, sustainable companies are more likely to attract capital from banks and investors.

10. Improve recognition and increase market share. Sustainability labels can improve brand recognition and make your business unique. Companies can benefit from sustainable development to ensure the loyalty of existing customers and attract new customers. They can also increase revenue and increase market share through new markets for sustainable products and services. Unilever’s "sustainable living" brands developed in response to different social or environmental issues have 26 brands including Dove, Lipton, Holocaust, and Net Seven, which have consistently exceeded Unilever’s average growth rate and achieved Grow faster.

Survive and prosper, and strive to become a sustainable enterprise, I think it is the goal that every business organization hopes to achieve. To achieve this goal, companies must rationally use the limited resources they have, and balance the relationships among all stakeholders, different resources (including natural resources, human resources, social resources, manufacturing resources, and financial resources, etc.) and Short-term and long-term interests, strive to make the value created by oneself greater than the resources consumed. Sustainability is the "golden key" to solve current global problems. The participation of enterprises is of utmost importance. In the process of practicing sustainable development, business organizations not only pay attention to the commercial value of sustainable development, but also need to take responsibility through innovation. While gaining benefits from the solution, we must also work on solving global problems and jointly create a better future.

In order to help everyone better understand the basic concepts of sustainable development and its commercial value, and how to integrate sustainable development into corporate strategy and implement sustainable development projects in the organization, we have opened the course "Basics of Corporate Sustainable Development Management". Welcome everyone to discuss and exchange together.


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