Sheldon Anthony IO

The goal of sustainable technology is to drastically reduce environmental and ecological risks and to create sustainable products. But how can sustainable technology create value for businesses? The answer lies in the environmental, social, and governance (ESG) outcomes that sustainable technology can enable. ESG outcomes are the positive impacts that a business has on the environment, society, and its own governance. ESG outcomes can improve the reputation, competitiveness, and performance of a business in various ways. In this blog post, we will explore the five key benefits of ESG outcomes for businesses that use sustainable technology:

1. Streamlines Regulatory Compliance

   ESG outcomes can streamline regulatory compliance by meeting or exceeding the environmental and social standards and expectations of governments, regulators, and customers. This can reduce the risk of fines, penalties, lawsuits, and reputational damage. Coca-Cola is a global beverage company that has adopted various ESG initiatives to enhance its sustainability and performance. Coca-Cola has set ambitious targets to reduce its water use, greenhouse gas emissions, and packaging waste, as well as to increase its use of renewable energy and recycled materials. Coca-Cola has also complied with the reporting standards and frameworks of various ESG organizations, such as SASB, GRI, TCFD, and UN SDGs. This has enabled Coca-Cola to communicate its ESG progress and impact to its stakeholders in a transparent and consistent manner.^[1]

2. Reduces Operating Costs

   ESG outcomes can reduce operating costs by decreasing the number of resources needed to operate, such as energy, water, materials, and waste. This can lead to lower costs, increased profits, and better decision-making. A more sustainable business can also benefit from tax incentives, subsidies, or grants for green initiatives. Unilever is a multinational consumer goods company that has committed to various ESG initiatives, such as reducing its environmental impact, improving its social responsibility, and enhancing its governance practices. Unilever has reported that its sustainable living brands, which have a positive social or environmental impact, grew 69% faster than the rest of its business and delivered 75% of its overall growth in 2018. Moreover, Unilever has also achieved significant cost savings by implementing ESG measures, such as reducing its energy consumption, water use, and waste generation. For example, Unilever has saved over €600 million in energy costs since 2008 by using renewable energy and improving its energy efficiency.^[2]

3. Enhances Shareholder Returns

   ESG outcomes can enhance shareholder returns by attracting and retaining investors who are looking for long-term value creation and positive impact. ESG outcomes can also improve access to capital and lower the cost of capital by demonstrating financial stability and resilience. Starbucks is a global coffee company that has integrated ESG principles into its core business strategy. Starbucks has committed to various ESG goals, such as reducing its carbon emissions, water use, and waste by 50% by 2030, sourcing 100% ethically traded coffee, and advancing diversity and inclusion in its workforce and communities. Starbucks has also been consistent and comprehensive in its ESG disclosure, using frameworks such as SASB, GRI, TCFD, and UN SDGs. By pursuing these ESG goals, Starbucks has not only enhanced its brand reputation and customer loyalty but also it's financial performance and shareholder value. Starbucks has achieved solid revenue growth and operating margin expansion, as well as high returns on invested capital and equity. Starbucks has also outperformed the S&P 500 index over the past five years, generating a total shareholder return of 181% compared to 121% for the index.^[3]

4. Increases Customer Loyalty And Satisfaction

   ESG outcomes can increase customer loyalty and satisfaction by delivering value-added products and services that meet customer needs and expectations. ESG outcomes can also improve the brand image and reputation by showcasing the social and environmental commitments and achievements of the business. Patagonia is an outdoor clothing and gear company that has been a pioneer in ESG practices. Patagonia has committed to various ESG goals, such as using organic and recycled materials, supporting environmental and social causes, and encouraging customers to repair and reuse their products. Patagonia has also been transparent and authentic in its ESG communication, using campaigns such as “Don’t Buy This Jacket” and “Vote the Assholes Out” to raise awareness and inspire action. By pursuing these ESG initiatives, Patagonia has not only reduced its environmental impact and social footprint but also increased its customer loyalty and satisfaction. Patagonia has built a loyal fan base of customers who share its values and vision, and who are willing to pay a premium for its products and services. Patagonia has also received high ratings and reviews from its customers, as well as recognition and awards from various organizations.^[4]

5. Attracting Talent And Improve Employee Engagement

   ESG outcomes can attract talent and improve employee engagement by creating a culture of purpose, diversity, inclusion, and well-being. ESG outcomes can also foster innovation and agility by encouraging experimentation, learning, and collaboration across teams and stakeholders. Lush, is a global cosmetics company that has been known for its ethical and sustainable practices. Lush has committed to various ESG goals, such as using natural and organic ingredients, fighting animal testing, reducing packaging waste, and supporting grassroots campaigns and charities. Lush has also been transparent and authentic in its ESG communication, using labels, stories, videos, and social media to educate and inspire its customers and employees. By pursuing these ESG goals, Lush has not only improved its environmental footprint and social contribution but also increased its talent attraction and employee engagement. Lush has attracted and retained talent who are passionate about its products and values, and who are empowered by its creative and collaborative culture. Lush has also achieved high levels of employee satisfaction, pride, and advocacy, as well as a strong brand reputation and loyalty. ^[5]

Sustainable technology is a framework of digital solutions that can enable environmental, social, and governance outcomes for the enterprise and its customers. These outcomes can create value for businesses in various ways, such as reducing costs and risks, improving productivity and quality, enhancing customer satisfaction and loyalty, fostering innovation and agility, and attracting talent and investment.