- The importance of being a sustainable company for the purpose of its stakeholders
- The amount of money spent to become sustainable is not negligible and adds sufficient value to the companies
- From the perspective of internal and external stakeholders, there are benefits and drawbacks to investing to become more sustainable
Many businesses nowadays revere their publics' voices in order to remain viable in their operations. Do they, on the other hand, understand what it means to be sustainable? Are they merely attempting to increase profits, or are they attempting to be completely sustainable for the sake of their stakeholders?
It is highly typical for corporations to be sustainable nowadays. Company have one of two goals: either to cover an internal crisis that threatens the firm's reputation, or to grow revenues by being sustainable and so obtain a better reputation from the public. Many individuals assumed that only financial services companies would adapt to sustainability, or that only manufacturing companies would follow this social standard. However, not only these businesses, but practically every industry, including the retail industry, is now voicing its support for the goal of sustainability.
However, the amount of money being invested to become sustainable is not insignificant. An example came from the main four accounting firms that have currently spilt out the amount of investments by being sustainable and jumping on the ESG bandwagon. PwC recently reported that there has been a surge in demand for the firm to join the ESG bandwagon, which would cost around $12 billion. This is simply a prediction. They do recognize, however, that this investment is useful to them, as well as to their stakeholders or society, because it is one of the ways to satisfy and expand services supplied to their clients, according to Bob Moritz, PwC's global chair.
A month ago, the COP26 conference just finished and came with an ecstatic outcome. COP26 resulted in a variety of promises to various mitigation and conservation activities, including a deforestation pledge, a methane abatement pledge, an agreement to cease offshore funding of oil and gas projects, and a steel and aluminum trade pact, in addition to an official accord. COP26, like previous summits, resulted in a slew of international pledges and underscored the pressing need to combat climate change. The GCP serves as a warning that pledges alone will not be enough to limit climate change. Without the right policies, investments, and technologies, atmospheric temperatures might rise by more than 2 degrees Celsius.
Following a lengthy discussion, the COP26 has resulted in a slew of promises and commitments from businesses to combat climate change. However, distinguishing between those who are genuine and those who are greenwashing is difficult. As an example, KPMG has begun to assist IKEA in analyzing any social and environmental risks associated with the furniture that they create, and they have recommended that IKEA execute the first green bond issued in India. Even so, this flatpack furniture shop, which has been labeled as a company that intends to be "climate positive" on emissions by 2030, experienced a supply chain issue due to the carbon emissions resulting from the shipping activities.
It is worth mentioning that efforts to align with the ESG do not always lead to the best outcomes. Most businesses use ESG as part of their marketing materials to enhance public awareness and, as a result, increase the firm's worth. However, if the companies fail to live up to the ideals they preach, they may face blowback.