June 08, 2022

Article

Is Sustainability a Cost?

There is often a misconception that having a sustainable focus within an organisation will drive up costs and not a lot else. However, implementing sustainable changes within your business could bring a wider multitude of benefits including financial reward.

At Albert Goodman we practice what we preach! We are committed to becoming net zero across scopes 1 & 2 by 2030 and want to support those with whom we work to do the same. 2030 may seem some time away but if an organisation is to achieve this with minimal use of any carbon offsets then there needs to be a number of changes to the way in which a business operates and we all know that change takes time.

So how could having a more sustainable outlook benefit your business?

Gain New Business

More organisations are looking to align the types of business with whom they work with their own organisational values and priorities.

Many large organisations are already considering their supply chains and asking businesses within them to either meet specified sustainability targets or be able to articulate what the business is doing in this regard. Should you not be able to comply with this or can not put together a plan in order to do so then you may miss out on future business tenders or lose contracts which are already in place.

If you know you have large organisations in your supply chain, engage with them now to understand their future expectations.

Win the talent war

Lots of businesses are feeling the pressure to secure and bolster their headcount. When you ask the standard “Have you got any questions” to conclude the interview, do not be surprised if you get a question around what your business is doing in the local community or how are you becoming sustainable. Many people want to work within an organisation that demonstrates that it cares. Although you may be able to rattle off a text book answer what is important is that this is genuine. When people commence their employment they will be able to see for themselves whether or not you truly do what you said.

It would also be wise to ask the people within your business what is important to them from a community and/or sustainability perspective to ensure that you are also meeting their needs where it is viable to do so.

Stay ahead of future regulation

The regulations around financial and narrative reporting of Environmental and Social Governance currently surround large organisations only. There are however many consultations in place which have this under review and may see the scope expand in the future.

Accounting aside there are also many other sustainability focused regulations and targets which have been set out as the government moves the UK towards a net zero future. It is important to ensure that you are aware of the changes which impact your industry as some will require a fundamental shift to the way in which a business operates.

Secure better finance options

Environmental and Social Governance (ESG) finance options are already available with various lenders and provide organisations with an opportunity to obtain reduced interest rates for hitting certain ESG targets which can often be defined by the organisation. This form of incentivised sustainability lending, although in its infancy, is likely to grow and will be a great opportunity for businesses who are able to demonstrate that they are on their own ESG journey.

Access Funding

With the UK being at the early stages on the roadmap to net zero there are frequently available funding options for those looking to input sustainable changes in their business such as electric charging points for vehicles. No one knows for how long these funding measures will remain in place so if you are considering sustainable changes to your business then do review government and local area funding schemes as you may be able to access support.

Summary

Yes there may be some costs in connection with sustainable adaptations to your business, however it is important to ask yourself whether these outweigh the benefits that being a sustainable business can bring.

Collaborate to achieve

If you would like to find out how we can work with you to achieve sustainability in your business then get in touch with your usual Albert Goodman contact or Sophie Parkhouse direct.

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