Economic Issues (Prosperity)
Promoting the best use of resources and creating a socio-economic strategy that utilizes these advantages is one way to develop a sustainable business model, that allows for equitable distribution of resources, and ensures that they are allocated efficiently.
Profitable businesses need stability in order to grow and create a positive environment that is attractive to employees and investors, and encourages consumer trust and sales growth.
When it comes to sustainability, the economic pillar needs to evaluate what sustainable actions the business is taking, and then look at the related impact in:
- Short, medium, and long-term sustainability goals
- Shareholder value
- Revenue and growth
Sustainable actions has to be affordable and provide value for the company – this value may not always be expressed immediately as a dollar-figure, it may be an increase in consumer trust, a boost in staff retention, or a less tangible effect – but eventually, this will translate into a financial state (for example, less turnover in staff leads to less training expenses).
Having an economic strategy is vital to ensure the gains and development from the environmental and social pillars is effectively noted, structured, and fed back into the company in order to increase growth.
Why You Need to Know What Your Business Is Doing
Since 2010, the number of S&P 500 firms who regularly issued ESG-related reports increased from 35% to 86% in 2021. Governments and official bodies across the globe are starting to make changes to how they handle these issues, for example – currency EU regulation has seen the Non-Financial Reporting Directive (NFRD) expand the number of mandatory reporting companies from 11,600 to approximately 49,000 – and this determination to make sustainable business the norm is going to continue to grow.
Companies who want to trade on a wider global scale are going to need to know where they stand with their sustainable efforts, and be seen to be making conscious decisions to improve – otherwise they’re either going to be unable to connect to the market (due to regulations), or unable to connect to their customers – who want to see (and are willing to pay more in many cases) sustainable products, services, goods, and businesses who don’t just talk the talk, but also walk the walk.