Publications

04 July 2023

The importance of environmental sustainability in companies

90% of managers believe that sustainability is important in business.

Our quality of life is highly dependent on the state of the environment in which we live. And all of us, without exception, have an active role in protecting the environment in whatever way we can.

Creating/ transforming a more sustainable business and adhering to the ESG model enables the optimisation of the business strategy for the environment, human society and the economy. There is increasing evidence that a sustainability strategy enables it to create long-term business value.

Research by Deutsche Bank found that companies with high ESG ratings outperformed the market in the medium (5 years) and long term (5 to 10 years). And in 2020, a study by Accenture provides further evidence of this, finding that companies with high ESG performance ratings averaged 3.7 times higher operating margins than those with lower ESG performance.

Today, in addition to the commercial value allied to sustainability, both consumers and investors attach a great deal of importance to this issue, and are increasingly beginning to support brands that are allied to ESG principles.

Since sustainability is seen as a competitive advantage, companies with environmental, ecological and social values are able to build a good reputation around the brand. One of the many examples of the increase in this reputation combined with sustainability is Lego, which is among the most highly regarded companies in terms of corporate social responsibility. The brand changed its strategy by creating its products and packaging from sustainable materials, such as leaves and sugarcane. This strategic vision has made the company’s reputation soar. 

 

Creating a sustainable business starts with joining the sustainable corporate governance initiative.

According to the European Commission “this initiative aims to improve the EU regulatory framework for company law and corporate governance”, allowing companies to focus on creating long-term sustainable value rather than short-term profits. The aim is to help better define the interests of companies, shareholders, managers and society in general. This project “helps companies to better manage sustainability issues in their own operations and value chains, in relation to issues such as social and human rights, climate change, the environment, etc.”