How to stay true to your sustainability principles during a period of rapid growth
Expanding your business needn’t mean compromising your ethical stance. Here’s how you can act responsibly as your company grows
While it’s clear to most entrepreneurs why environmental sustainability is important, it can become more difficult to achieve if your business is going through a period of rapid growth.
When you’re just starting out, things are more straightforward. You can make sure your sustainability principles are implemented across the business because you’re in control of every decision.
However, as your company expands, things can become trickier, especially if you start trading overseas or take on additional suppliers. The good news is there are ways to ensure your business continues to act responsibly even as it grows.
“The approach for a big organisation is pretty much the same as the approach for a small organisation,” says Alex Davies, our ESG Business Growth Advisor and Sustainability Lead at Cancer Research UK. “Ultimately, you’re trying to achieve the same outcomes, mitigate the risks and help the business continue to grow. When you’re growing very quickly, it just adds time pressure.”
What makes a business sustainable and profitable?
Companies that can demonstrate their commitment to environmental, social and governance (ESG) practices often outperform their competitors. According to analysis by EY, sustainable organisations consistently beat their peers on profitability metrics such as gross profit, net profit and EBITDA.1
This is vital to realise as your business expands: not only are you doing the right thing for the environment, but you’re also doing the right thing for the future of your company.
“It’s all about good business and it’s a happy byproduct that we contribute towards saving the planet,” says Alex. “Getting sustainability right means you reduce your costs, you become more efficient and you become more relevant to your customers.”
How can I be more sustainable and expand my business?
The two are not mutually exclusive – in fact, by becoming more sustainable, you’re likely to expand your business in the process. That’s because sustainable practices often drive efficiencies and can help attract new customers.
A key thing to remember is that while it can feel intimidating to be growing fast and trying to improve your ESG practices, you can start small and build up from there. You should always seek advice if you’re unsure about how to proceed.
“It can seem complicated, but when you get underneath the language and work out exactly what you want to achieve, it doesn’t have to be difficult,” says Alex. “The golden rule is always bring it back to your product. That way, sustainability can really enhance your business. It can mitigate risk, reduce costs and inefficiencies, improve relations with suppliers and help you get ahead of legislation.”
What are sustainable business practices?
One good way of showing your customers and other interested parties that you’re a sustainable business is through the adoption of standards.
These can range from the Good Business Charter, which organisations can sign up for if they comply with certain criteria, to the more rigorously tested B Corporation certification, which is awarded to companies that can prove they operate to strict ethical standards. There are also many industry-specific certifications, such as the Global Organic Textile Standard (GOTS) for clothing manufacturers.
Adopting standards will give you a framework and allow you to demonstrate progress against a credible external set of criteria.
Five golden rules
Alex sets out five things to always keep in mind about sustainability during a period of rapid business growth.
1. It doesn’t have to be complicated or perfect as long as you’re open, set targets and show what you’re doing. Transparency is key.
2. Aim for continuous improvement by reviewing your progress every year and by telling that story to your internal and external stakeholders.
3. People value what they can touch and see more than big numbers. In other words, focus on what you’re doing, not just on global problems.
4. Use standards for credibility and to demonstrate you’re making progress.
5. Have a clear understanding of why sustainability matters to your business and make it about your product or service. This is most important of all.
Ask for advice
If you’re growing your business, why not speak to Alex about how we can support you.
This article is written for the St James’ Place Entrepreneurs Club newsletter. The opinions expressed by third parties are their own are not necessarily shared by St. James’s Place Wealth Management.