How sustainability became vital to business credibility

How sustainability became vital to business credibility

‘Sustainability’ used to be little more than a buzzword: a stretch target, a ‘nice to have’. But the conversation has shifted – so much so that being serious about sustainability is now fundamental to a business’s credibility.

In his annual Letter to CEOs this year, Larry Fink asked business leaders: “Every company and every industry will be transformed by the transition to a net zero world. The question is, will you lead, or will you be led?”

It’s a pertinent question at a time when sustainability has made the transition from buzzword to business essential. Indeed, last year Fink had told BlackRock investors: “There is no company whose business model won’t be profoundly affected by the transition to a net zero economy… companies not quickly preparing themselves will see their business valuations suffer.”

‘Net zero’ isn’t just a buzzword either. It’s a serious goal with a serious aim: to completely eliminate carbon emissions as a result of human activity. More and more businesses are coming together to meet this ambitious and increasingly urgent target, which is so critical to the future of our planet. It’s a drive that will leave no business untouched, and with time running out, the time for action is now.

Greenwashing and tokenism are not enough

With a third of Europe’s largest public companies having pledged to reach net zero by 2050, conversations about sustainability are no longer the preserve of ‘green’ organisations. Nor are they just for big organisations; businesses of all sizes are affected by the shift in public perception around this issue.

It’s also clear that token gestures and vague claims aren’t enough. Research shows that consumers aren’t inclined to believe companies’ claims about sustainability, particularly if they’re a multinational, with only 13.7% of consumers believing that these organisations are honest about their sustainability efforts.

And it’s not surprising, given the prevalence of greenwashing – the practice of making one’s business out to be sustainable for marketing purposes, while in fact doing little or nothing in the way of genuine effort to be more environmentally friendly. This behaviour damages a company’s reputation, undermining credibility and weakening consumers’ (and investors’) trust.

Spotlight on a key trend: the 15-Minute Commute

So, with concrete action a must on the sustainability front, and a must on the credibility front, what kind of things can companies do to build credibility in this area? One environmental trend that looks set to be impactful is the 15-Minute Commute. Born out of the reevaluation of working life that’s happened in the wake of the pandemic, the idea is that ‘15-Minute Cities’ are able to cater for all our needs within a 15-minute radius.

Work is a big part of that, and as part of their sustainability efforts, companies can do their bit to facilitate a shorter commute. With many embracing a new blended way of working that mixes time in the office with time spent working from home, hybrid working with flexible work spaces in town centres is the future of work. It allows more employees to work remotely, cutting the need for commuting and therefore drastically reducing the workforce carbon footprint.

The thinking behind this idea is the ‘hub and spoke’ model; a decentralised way of operating in which businesses have a central office, while satellite working spaces form the spokes. These satellites serve areas where employees live, so that they no longer need to commute to the central office. The early indications are promising; IWG research shows that nearly half (49%) of businesses are considering moving to areas where their workforces typically live. Two thirds (69%) of employers also say that helping staff cut down on their daily journeys is an important way to help to meet company sustainability targets.

That ties in with what employees want too, with our research showing that workers are four times more likely to choose an office close to home than a city centre, and 77% saying that a place to work closer to home is a must-have for their next job move. In addition, two thirds (66%) of employees agree that it’s important to cut down commuting to make life more sustainable, while 76% say that commuting less is an important step in fighting the climate crisis. But how can this be effected? The verdict from the world’s workforce is almost unanimous: a huge 84% consider that it’s one of the benefits of hybrid working.

It’s clear that businesses that don’t set serious sustainability targets will lose credibility – and trust: the trust of consumers, employees and business partners. Regulators and watchdogs will continue to develop sustainability standards for companies to follow, and tokenistic green policies will therefore be called out – potentially damaging trust further. Embracing hybrid working and initiatives like the 15-Minute Commute will be what sets businesses apart in the business world of tomorrow.

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