As a board member, it’s important to stay up-to-date on the latest trends and developments in your industry. This includes keeping an eye on sustainability trends, as these can have a significant impact on your organization’s operations and reputation.
A key reason for board members to care about sustainability trends is the increasing importance of environmental, social, and governance (ESG) factors for customers, employees and investors. ESG factors are non-financial metrics that measure a company’s impact on the environment, society, and governance practices.
Another reason for board members to care about sustainability trends is the potential financial benefits available from addressing all the associated risks, impacts and opportunities. sustainable practices. Sustainability can be used as a business improvement lens to help organisations reduce its costs and increase its efficiency, as well as generate new revenue streams. For example:
- a company that reduces its energy consumption through the use of renewable energy sources can lower its energy costs and improve its bottom line
- similarly, a company that reduces it’s material usage of finds a cheaper recycled substrate can again make significant savings
- a frequent example we see when companies have large fleets is a sustainability lead focus on driver behaviour and journey planning makes significant fuel and therefore carbon savings.
Reputation protection and development is another key reason for taking ESG impacts more seriously. Consumers, in particular, are becoming more aware of the environmental and social impacts of the products and services they purchase, and are increasingly choosing to do business with companies that align with their values. Evidence from surveys also suggest that employees are increasingly considering sustainability as a criteria for choosing an employer, given a choice.
In addition to the potential financial and reputational benefits of sustainability, there are also legal and regulatory considerations to keep in mind. Many countries have enacted laws and regulations related to sustainability, and companies that fail to comply with these regulations can face fines and other penalties. As a board member, it’s important to stay informed about the relevant current and forthcoming laws and regulations, ensuring your organisation is complying or ready to comply.
By considering the environmental and social impacts of their operations, organisations can evolve with changing markets and technologies to thrive in the long run. This includes considering the potential risks and opportunities that may arise as a result of climate change, legislation change, social trends and other environmental factors.
In conclusion, board members should care about sustainability trends because they can have a significant impact on a company’s operations, financial performance, reputation, and legal compliance. By staying informed about these trends and considering their potential impact on the organisation, board members can help ensure the long-term success and viability of their company.