Financial benefits of sustainability

Governments have been encouraging businesses to incorporate sustainability for decades. New research has found that over the past 10 years, global ESG regulations have increased by 155% (1). Many companies see this as costly compliance work, that “burdens companies” and “hinders economic growth” (1). However, many are still unaware of the endless positives that arise from incorporating sustainable business practices, particularly the financial benefits.

As a reminder, our actions are accelerating the rate of climate change, causing detrimental effects globally and in the UK (2). To avoid the worst impacts, we must halt global warming at 1.5°C; requiring a 45% emission reduction by 2030, which we are not on track to attain (3)! Ultimately, we will only see a rise in regulations, so why not proactively invest in sustainable initiatives, and save your business money? NIKE reduced their carbon emissions by 30%, saving them millions of dollars annually on energy bills, besides the 10-15% reduced material costs, which increased their revenue and net income (4).

Here are 5 financial benefits from incorporating sustainability into your business:

1. Cost reductions – Energy, Waste & Grants

Research has found that implementing sustainable practices can reduce operating costs and increase your operational profits up to 60% (5).
You can save 9% of your energy bills (£1,395 per business per year, on average), through a combination of behavioural changes to reduce usage and switching to renewable energy (6).
Consumers in Northern Ireland saved a total of £200million, between 2020-2023, by transitioning to renewables, avoiding 13million tonnes of CO₂ (7).
Edie reports that large UK office-based companies can save 70% of their waste costs (£24,000 on average), by simply reducing waste (8).
Helping the government achieve net zero targets can benefit you from tax breaks/grants and avoid fines/penalties by adhering to regulations (9)

2. Boosts sales, profits and investments

“62% of Gen Z shoppers prefer to buy from sustainable brands” (10).
73% of Gen Z are willing to pay more for sustainable products (10).
Businesses with “ethical supply chain practices” can increase revenue of products up to 20% (11).
ESG-focussed funds could make up 50% of UK assets by 2025, with 80% of investors believing companies should address sustainability issues (12, 13).

3. Reduction in recruitment costs

Research found that nearly 1 in 2 (46%) want their company to incorporate ESG commitments (14).
1 in 3 people aged 18–24, admitted to rejecting a job offer due to the company’s lack of ESG commitments (14).
Employees are more likely to be engaged and productive working at a sustainable company, meaning a decrease in turnover rates (15)

4. Increases return on investment (ROI)

You can increase your ROI, by demonstrating to stakeholders that you include financial benefits from sustainable practices, into your business strategy (16).
ESG leaders achieved 8% higher ROI than the broader market in the US (17).
UK spending on business sustainability is projected to grow 13% every year between 2025-2030 (18).

5. Improves overall brand image

Incorporating ethical practices within your supply chain can increase your brand value by 10% (11).
Strong commitments to sustainability can improve brand reputation, attract new customers, enhance brand loyalty and are resilient to market shifts (19).

We are here to guide you on what sustainable initiatives your business could implement. Please get in touch, if this is of interest.