MIT Study Shows How Businesses Benefit From Embracing Sustainability

People have been concerned about mankind’s impact on the environment for more than forty years now. Yet it is only recently that these concerns have been taken seriously in any real way. People have been recycling for the past few decades on an individual level, but if large organizations don’t do their part these efforts are tiny drops in an earth-sized bucket. In the aftermath of Hurricane Katrina the debate about climate change intensified, and in the weeks following Superstorm Sandy even staunch detractors have stopped and acknowledged that there may be something to the science behind all of these environmental swings. So when will the business world begin truly moving their efforts towards sustainability? According to a new study, this shift is already taking place.

A detailed questionnaire was given out to more than 2,600 companies from all over the world as part of a joint effort between MIT Sloan Management Review and BCG, the Boston Consulting Group. The goal was to figure out what sort of role sustainability plays in the long-term planning of the business world. The results should warm the hearts of every eco-warrior out there. According to the study, just under 50% of the companies polled have significantly changed their business model to best take advantage of opportunities in sustainability.

So why the recent change? You’d like to think that the CEOs in their glass towers have finally realized they have to do their part to protect the future of the planet. But the reality is much more practical. Sustainability has become a driver of profitability and innovation. And in the business world, nothing matters more than the bottom line. It does prove that the efforts of millions of individuals have begun to impact large companies. Consumers vote with their dollars, and more and more often people want to spend money with countries that practice their business responsibly. Storms and droughts worsen with every passing year, and there’s no denying these issues will affect the coming generations. If the businesses you choose to support or to turn your back on can be made to respond, the individual sacrifices are all worth it.

So how is sustainability a benefit for businesses that would never have restructured their mission statement based on the state of the world decades in the future? First and foremost, it has become a key driver of innovation. Would there even be electric and hybrid automobiles if the future availability of fossil fuels wasn’t in question? Corporate research and development teams have reported back that the limitations put on their efforts by sustainability are actually pushing them to find new solutions. And those solutions are helping companies create products and services that differentiate their brand from all others within the marketplace.

And innovation isn’t only coming in the supply chain. Sure, any company can cut down on the packaging they use or the products they put into that packaging. But when companies focus on sustainability they actually create new revenue streams. They attract a different type of customer, and can target customer needs that didn’t exist before sustainability became a concern.

Additional opportunities develop for these companies to rebrand for the next generation of consumers. This is a difficult time to market and advertise anything, regardless of how well known the product. The media is cluttered, the 24-hour news cycle pushes information through the pipeline faster than ever, and even the best innovations are swiftly forgotten. Whether you’re Dell, theĀ University of Arizona or Carnival Cruise Lines you’ve got to reinvent your approach to break through the noise. A focus on sustainability gives these companies something new to hang their hat on, which also makes their brand much friendlier in the minds of consumers.

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