Blog.

Economic, social and environmental: the triple value of sustainable companies

Blog
10 November 2022
Las empresas sostenibles son aquellas que se preocupan del impacto de sus actividades en la sociedad y el medioambiente

What role should organizations play in the world's progress? Although there is no unanimous answer, their capacity to influence is undeniable. They can either advance or harm society and preserve or damage the environment through their actions. For this reason, sustainable companies are of paramount importance in a scenario that is becoming increasingly aware of these issues.

This is not a closed category: any company in any sector can be committed to sustainability. There is no discrimination. This concept covers both SMEs and large multinationals. From the automotive industry to local hospitality businesses.

What began a few decades ago as timid efforts on an individual level have become a predominant trend in the business landscape. Half a century ago, the number of sustainable companies and savers committed to ethical investment was residual. Today, its prominence is unquestionable. Even the CNMV has embraced ESG criteria, making them one of its strategic lines.

All this translates into creating a fairer and more balanced economic model that benefits companies, investors, society and the planet. Whereas profitability was pursued at all costs in the past, nowadays, this behavior is repudiated, and people are wary of such organizations.

But what are sustainable companies, and why will they be decisive in the future?

What are sustainable companies?

Sustainable companies are all those firms concerned with making a positive contribution to society and the environment, aware of the consequences of their actions. It is not enough, therefore, not to pollute or not to commit acts that are harmful or damaging. They must acquire a proactive attitude and become directly involved in fighting for the causes they believe in.

They have a defined purpose that serves as a compass and gives meaning to their decisions. This mentality must be implemented internally so that it is present in all processes and defines the company's spirit and culture. For this to happen, the employees must assume and share it. However, this can only be achieved with a firm commitment from top management, who must take the initiative and serve as an example to the rest of the workforce.

Sometimes, this task can become a real challenge, as resistance can be encountered from certain stakeholders. For this reason, it is crucial to design a strategy aimed at long-term value creation. In this way, the organization will drive progress and create a more pleasant and welcoming world for generations to come.

Advantages of sustainable companies

Values such as integrity and sustainability bring a multitude of benefits to businesses. For a start, they will enjoy the peace of mind and satisfaction of doing the right thing.

At the reputational level, the repercussions are formidable. Adopting ethical behavior is a colossal boost to any firm's brand image, as society's perception will be much more favorable. This, in turn, generates a deep-rooted sense of belonging among employees. In addition, workers will be proud to be members of sustainable companies, which favors talent retention.

In addition, sustainability is a highly valued asset for shareholders and investors. As a result, shareholders and investors are more likely to consider possible involvement at the financial level, as they place a high value on such issues. In fact, the number of savers interested in ethical investment is growing all the time.

Appearing as a company committed to the environment also attracts a large customer segment, leading to increased revenues and consumer loyalty. In addition, corporate social responsibility is reflected in the bottom line, as it can improve profits.

However, there is a danger in this. Some organizations have seen the potential of these speeches to increase their sales and fall into attitudes such as greenwashing. Instead of making a genuine commitment, they simply include sustainability in their discourse, using it as a mere advertising tool.

Los clientes e inversores valoran cada vez más aliarse con empresas sostenibles

Examples of sustainable companies

What exactly do sustainable businesses do to be considered sustainable? There is a multitude of actions that point businesses that want to improve in this area in the right direction.

To begin with, they should pursue energy efficiency, renewable energy, resource-saving, waste recycling or using scarce resources such as water. In general, all behaviors that contribute to reducing their carbon footprint are welcome.

The company can also become a prescriber of good practices, raising awareness among employees and suppliers. On the other hand, obtaining certificates is objective proof of good practice and performance.

The range is wide: companies can refuse animal testing, avoid polluting the environment or support social causes that benefit their communities. Those that manufacture products can opt for eco-design, a technique that considers the environmental impact of these products throughout their life cycle.

Finally, it is advisable to look at the Sustainable Development Goals. This guide, produced by the UN, is very useful for sustainable companies. Depending on their sector and activity, they can check which objectives fit with them to take measures based on these strategic lines.

Corporate social responsibility

Corporate social responsibility, commonly known as CSR, is a very popular phenomenon today. This management strategy puts the impacts generated by its activity on its stakeholders at the center of the equation.

CSR goes far beyond mere compliance with the law: it is a voluntary commitment made by the organization. It can be defined as a business management system that seeks a balance between economic, social and environmental elements. It, therefore, implies ethical conduct on the part of the business.

But this phenomenon is not as recent as it seems. Howard Bowen planted the seed about 70 years ago in his Social Responsibility of a Businessman, published in 1953. In it, he rambles on the obligations of businessmen to promote policies and make decisions that align with the goals and values of society.

Gradually, more academics and scholars joined the conversation, theorizing about this term. It did not take long for the first associations and standards to measure these parameters, such as Global Reporting Initiative, to emerge. In 2014, legislation entered the scene. For the first time, the European Union required the inclusion of environmental, social and good governance factors in company reports, a very important step forward.

The B Corp certificate

Because of greenwashing companies, identifying sustainable companies that make a solid commitment can become a real challenge. To make it easier to identify them, B Corporations were created.

These certificates, introduced in the United States in 2006, have become a global standard. Holding a B Corp certification provides a high degree of credibility and trust, as it guarantees sustainability and commitment that is not granted to anyone.

The process to achieve accreditation is rigorous and only available to organizations with very high scores. In addition, a re-evaluation is carried out every three years to ensure they continue meeting the requirements.

B Corp measures its performance in five areas: community, employees, environment, governance and customers. To do so, it carefully analyzes the legal aspects, transparency, governance structure and accountability system.

But such meticulousness pays off. Citizens have the peace of mind that they can trust the firms that bear its seal. Moreover, the benefits of these companies, which now number more than 4,400 globally, are generally positive. After all, they are the leaders of the new business scenario, characterized by a higher level of inclusiveness and sustainability.

Ethical investment in sustainable companies

More and more people are convinced of the power of their capital to improve the world. For this reason, they place a high value on social and environmental issues when making investment decisions. And they look for sustainable companies that share their beliefs to support them financially.

Inversa was created to facilitate this search. This alternative financing platform is an ideal solution for all those savers who wish to make an ethical investment. In its catalog, they can easily find sustainable initiatives that need liquidity, financing their invoices and thus promoting the real economy.

Although these organizations pursue social and environmental benefits, they do not neglect economic benefits. At the end of the day, profitability and the generation of returns for investors allow them to survive and continue to champion the causes they champion.

This triple value that characterizes sustainable companies is captivating more and more companies and is gradually becoming a standard. Undoubtedly, the future lies in this triad.

Alternative Financing ethical investing socially responsible investing sustainability
Inversa Team
Inversa Team

If you would like to contribute to Inversa's Blog as an expert, become a knowledge partner.

Sign in