THE IMPORTANCE OF SUSTAINABILITY IN BUSINESS

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What is the true meaning of sustainability in business? The ability of a corporation to meet its demands now without endangering its potential to do so in the future is known as sustainability. In order to ensure that a business is responsible, ethical, and consistently profitable, it especially entails the coordination and management of environmental, social, and financial needs. Businesses nowadays cannot only think about profit, but they also need to think about the social and environmental impact of their business because there’s a shift in customers’ minds where sustainability is now expected, not an option. Here are three reasons why sustainability is important in business:

1. Maintain a good brand image. It is crucial for a company to give a good impression to customers, even to potential customers. When paired with strong, sustainable business practices, establishing a company as an innovative brand that cares about the environment and society will provide a successful future. According to a 2017 American survey, 87% of consumers will see a business more favorably if it promotes social or environmental causes, and 92% of customers are more likely to trust a business that promotes sustainability. Word of mouth can be one of the most effective marketing methods, but for a company with a bad brand image, it can be a sword against the business because it can easily kill any product/service in the eyes of the public.
2. Increase loyalty. Sustainability can increase customers’ loyalty to a company because a study shows that 88% of customers will be more loyal to businesses that embrace social or environmental causes. This loyalty will cause an increase in retention rate, which is an essential indicator to calculate the percentage of people who continue to use a company’s product or service over a specified time. A high retention rate is a reliable source of ongoing income and indicates that current customers value our products and services.
3. Lowering risk and cost. Some laws regulate companies to meet specific standards in operating their business, even in Indonesia. For example, based on Law no. 40 of 2007 concerning Limited Liability Companies (PT) article 66 paragraph 2c, companies are required to submit annual reports to the GMS. If companies disobey this, they will be subject to administrative sanctions with written warnings, suspension of business licenses, administrative fines, and even revocation of business licenses. Thus, being sustainable can lower the risk of getting these charges. Apart from that, it can also minimize costs because utilizing energy-efficient supplies, for example, will help cut expenses by focusing on sustainability whenever feasible.

Many people have said that operating businesses in a sustainable way may be pretty expensive, but in a sense, doing so is an investment in the business, as the whole objective of sustainability is to enable businesses to continue operating for a long period of time. Sustainability goes far beyond simply examining the past or present actions of the firm. It also considers the changes that may be made in the future to ensure that the organization has a bright future. If you’re a business owner or even considering owning a business, make sure you consider sustainability in the process!