The sustainable business imperative: Why companies need to start prioritising planet over profit in 2023

Companies have a crucial role to play in protecting the planet. For a long time, companies have been primarily focused on maximizing profits, but with the increasing urgency of environmental issues, this approach is no longer sustainable. Companies need to start prioritizing the planet over profit if we want to ensure a healthy future for generations to come.

A moral obligation

First and foremost, prioritizing the planet is a moral obligation. Companies are not just economic entities but also social entities, and they have a responsibility to protect the environment and future generations. Failing to do so not only has severe consequences for the environment but also for the future of the company and its stakeholders.

Financial benefits

Despite what many companies and shareholders believe, prioritizing the planet can bring financial benefits to companies – however businesses must look beyond the short term impact on their bottom lines in order to recognise this. Implementing sustainable practices and reducing their carbon footprint can help companies reduce their operating costs and improve their reputation, leading to increased consumer trust and loyalty. Moreover, each and every company is exposed to financial risks associated with climate change including:

Physical risks

Climate change can lead to more frequent and severe natural disasters, such as floods, droughts, and wildfires, which can damage physical assets and disrupt supply chains. This can lead to business interruptions, property damage, and inventory losses, which can have significant financial consequences.

Transition risks

As governments and consumers increasingly demand lower carbon emissions and greater sustainability, companies that are slow to adapt may face regulatory and reputational risks. For example, companies that rely heavily on fossil fuels may face higher costs or penalties for carbon emissions, or may struggle to compete with companies that have already transitioned to renewable energy sources.

Liability risks

Companies may also face liability risks as climate change leads to more frequent and severe weather events. For example, companies that operate in areas prone to flooding or other natural disasters may face legal claims for damages or injuries caused by such events.

Reputational risks

Companies that are perceived as not taking sufficient action on climate change may face reputational risks, as consumers and investors increasingly demand that companies operate sustainably. This can lead to lower sales, reduced brand value, and difficulties attracting investment or talent.

Companies that focus on sustainability and corporate social responsibility often see an improvement in their bottom line, however this requires a major shift in mindset within the C-suite and board level. 

Staying ahead of the curve

The regulatory space is changing fast, and companies who prioritize the planet can help companies stay ahead of the curve and stay compliant with emerging environmental regulations. Companies that fail to adapt to these regulations face significant financial penalties and reputational damage, which can have a long-term impact on their success, ensuring that their operations are sustainable and environmentally friendly.

Long-term viability

Lastly, prioritizing the planet can help ensure the long-term viability of the planet as well as each and every business and society for future generations. The planet is facing significant environmental challenges such as climate change, deforestation, and plastic pollution, and companies have a responsibility to address these challenges and help mitigate their impact. It is our view that it is a moral obligation for companies to help ensure that the planet remains a healthy and livable place to inhabit when we are all lone gone. 

The economic case for prioritizing our planet

Of course, we would all like to believe that companies will simply do the right thing. However, the reality is that most decisions do still come down to profits, the company’s bottom line and pleasing shareholders. So looking through an commercial lens what is the economic case for prioritizing our planet? We take a closer look here: 

Environmental protection can boost economic growth

First and foremost, environmental protection can boost economic growth and create new jobs. For example, investment in renewable energy and energy efficiency can lead to the development of new technologies and industries. This can create new job opportunities and stimulate economic activity in a variety of sectors. In addition, sustainable agriculture, forestry, and fishing practices can enhance food security and provide income opportunities for rural communities.

Reduce natural resource depletion and associated costs

Environmental protection can reduce the cost of natural resource depletion. The unsustainable use of natural resources, such as water, soil, and minerals, can lead to a decline in their quality and availability. This can lead to higher costs for businesses and consumers, as well as the risk of resource scarcity and conflict. By protecting natural resources, we can ensure their availability for future generations, avoid the costs of resource depletion, and reduce the risk of resource-related conflict.

Reducing the cost of mitigating climate change impacts

Climate change is a major threat to the global economy, as it can cause damage to infrastructure, disrupt supply chains, and increase the frequency and intensity of natural disasters. By reducing greenhouse gas emissions and investing in adaptation measures, we can reduce the costs of climate change and protect the global economy from its impacts.

Summing up

In conclusion, companies need to start prioritizing the planet over profit. This shift in mindset is not only a moral obligation but also a strategic opportunity to improve financial performance, stay ahead of emerging environmental regulations, and ensure the long-term viability of the planet for future generations. Companies that take this responsibility seriously will reap the benefits of a healthier planet and a sustainable future. This is further backed up by a clear economic case for protecting the planet where environmental protection can boost economic growth, reduce the costs of natural resource depletion, and mitigate the impacts of climate change. 

With all that said, it is in the interests of businesses, governments, and individuals to work together to ensure the long-term sustainability of the planet and the global economy. By taking action now, we can ensure a more prosperous and secure future for all. It’s time to move from talking to doing. 

Sign up to be a BETA user of our corporate carbon emissions dashboard for free below