The Financial Benefits of Well-Run Sustainability Initiatives
Advocacy Corporate sustainability programs are gaining momentum and beeping increasingly louder on the radars of Fortune 500 executives.
As consumers, employees, investors and other stakeholders are steadily shifting their preferences toward products and services that minimize negative environmental and social impacts, it is becoming clear that the leading brands of the future will be ones that endure and thrive on innovating in those directions. Translated into the language of corporate executives, it’s all about smarter risk management, upside-profit potential and long-term resilience.
The big 3
Three types of initiatives have stood out as particularly financially advantageous to date: driving waste reduction or reuse; embedding purpose in the heart of brand and marketing strategy; and engaging employees while increasing loyalty and retention.
"Target's Made to Matter collection offers more than 120 products from 31 sustainability-driven food and personal-care brands known to be popular among health-conscious millennials."
Promising company case studies exist in all three categories. Procter & Gamble (P&G) has seen about half of its manufacturing facilities—70 out of 142—reach zero-waste-to-landfill status, creating $2 billion in value in the last 7 years. Another compelling waste reduction story hails from Sprint, which was the first mobile carrier to take back other carriers’ devices and provide an instant in-store credit, putting more than $250 million back in customers’ pockets through its Buyback program in 2014 alone. That same year, Sprint remanufactured more than 80 percent of the 3 million phones it bought back and re-sold them as certified pre-owned devices. All told, Sprint has saved more than $1 billion in operating costs thanks to this initiative.
On the brand strategy front, Unilever has been overwhelmingly recognized as a global leader. The company’s ‘sustainable living brands,’ including Dove, Lifebuoy, Ben & Jerry’s and Comfort, among others, accounted for half the company’s growth in 2014 and grew at twice the rate of the rest of the business.
In a similar spirit, Target's Made to Matter collection offers more than 120 products from 31 sustainability-driven food and personal-care brands known to be popular among health-conscious millennials. Made to Matter brands have exploded in growth and are projected to bring in $1 billion for Target in 2015.
Finally, in a long list of employee engagement programs, HP has achieved remarkable results through its partnership with micro-lending platform Kiva. HP provided a $25 credit for every one of its employees to lend to borrowers on Kiva, connecting HP employees with entrepreneurs in developing countries. Relying on friendly competition inside HP, the program has had huge success to date. More than 152,000 HP employees are already lending over $9.8 million through 343,067 individual loans, and counting.