Yura Lazebnikov, an investor, the Managing Partner of TECHIIA holding, on real benefits for business from compliance with the sustainable development principles.
There are a lot of illogical yet reasonable actions in recent history. The of the temple in the Egyptian village of Abu Simbel in order to save the architectural monument from the flooding of the Nile. Reconstruction of the Ishtar Gate to showcase it at the Pergamon Museum in Berlin. The creation of a 264-pound that goes under the water then reappears reminds me of how a person affects the environment.
And there are actions, both logical and reasonable, but not always clear. For example, the company I co-founded, TECHIIA, recently joined the United Nations Global Compact, which includes . Among other things, the document speaks of striving for the rational use of resources, reducing the level of inequality and providing quality education for all.
Sounds great, but not all entrepreneurs realize the potential in the sustainable development principles, though there are growth points for your business. Here, I will highlight two basic ones.
Developing Generation Z Awareness
Investing in sustainable areas has a positive impact on business results. According to a 2020 by HSBC, 78% of UK companies expected their increased focus on sustainability to lead to increased sales this year.
Additionally, McKinsey that the value potential discovered by companies with a long-term approach — “patterns of investment, growth, earnings quality and earnings management” — could reach $3 trillion by 2025.
Based on my observations, one of the main reasons for this is the values of Generation Z. By increasingly setting the value agenda on the planet, young people are changing consumption patterns. For example, according to “The State of Consumer Spending: Gen Z Shoppers Demand Sustainable Retail,” of consumers from this generation choose to buy from sustainable brands, more than any other generation of consumers.
“Zoomers” (born between , according to Pew Research Center) will one day become either your clients or employees. A good enough reason to pay attention to sustainable principles if you haven’t already.
Consumers today don’t just buy a product; they often look to build relationships with manufacturers with values: how you produce, how it affects the environment, what benefits you bring to the world. More than ever, consumers care about how ethical you conduct your business, how you build a team and how you respect its rights. Among business terms that may appeal to today’s consumers, especially Gen Z, include environmental friendliness, rational consumption, equality and ethics, work-life balance and availability of resources.
As a result, on a practical level, companies should at least have and adhere to a clear code of conduct. At TECHIIA, we two years ago and regularly held webinars for employees to explain its points and value. You also need to bring the client closer to your business: talk about production chains, broadcast sustainable values and engage in social projects that matter. By joining the UN Global Compact, you can choose the goals that are close to you, create projects for their implementation and communicate the results to internal and external stakeholders.
Appealing To Talented Employees Who Value Sustainable Projects
“Forget Millennials, Gen Z is the new golden child,” to the “Undivided 2019 Gen Z Purpose Study.” According to the study’s authors, this generation “feels empowered to change the world for the better” and is looking for companies that are purpose-driven.
The study found that, as of 2019, 77% of Gen Z respondents were interested in a company’s sustainable activities — in particular, whether it does harm to the environment. In 2017, this figure was 69%. Another study found that just last year, of employees surveyed said, “they were more likely to work for a company with strong environmental policies.”
Another conducted late-2019 in the U.K., showed that 26% of employees would agree to a lower salary to work for an organization that prioritizes environmental protection, 50% would turn down a job offer if they thought it was environmentally harmful, and 72% of respondents aged 23 to 38 investigate a company’s environmental impact when applying for a job.
Several years ago, we focused on two areas: the health of residents of the regions where our companies operate, and the education of future technicians. This is pure philanthropy. But it turned out that they are important not only for the direct participants in the projects. Many candidates tell our human resources professionals that they studied our social initiatives before submitting a resume or responding to an offer. We unexpectedly received an additional point in the eyes of candidates in an overheated market.
Finally, about the money. Research has found that active and consistent development of sustainable projects with a higher return on equity in the short and long term. In particular, a sustainable company may tend toward lower risk ratings and better credit conditions. We notice this when communicating with banks.
But something else remains important. People who work with you or buy your product often want to be involved in positive change. They do not need slogans, but deeds: specific projects for the environment and human health, business ethics rules that are respected, equal opportunities for everyone. Bring them into your foundation and feel the benefits.
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