Sustainability is good for business

Practising sustainability makes economic sense for all businesses — whatever their size.




Going green is often associated with higher costs. For many small and mid-sized enterprises (SMEs), this can mean automatically relegating sustainability to the back burner as something only larger companies can afford. But becoming sustainable can save SMEs money, with the business benefits far outweighing any initial investment.

Firms that shift to making sustainability a core part of their strategy are finding that it improves the bottom line, reduces risks and increases competitiveness and the number of satisfied customers. Business as usual, on the other hand, can end up costing your company. Here’s how.

More businesses are realising that to remain relevant and grow, they need to be more sustainable.

Cost savings

Every SME wants to reduce costs to improve cash flow, and sustainable practices can do just that. By cutting down on your use of energy, water and paper, you can make significant savings. Replacing your energy supply with renewable power, buying used instead of new furniture, and using recycled materials for your products can further pare down your firm’s business expenses.

Why sustainability matters for SMEs - HSBC SG Business Banking

A growing number of large Singapore companies are reporting that they are reducing costs through sustainable practices, providing a potential model for SMEs. CapitaLand, for example, has saved S$170 million on utilities bills since 2009, thanks to more efficient use of resources.1 In 2018, it slashed its energy and water consumption by 18 per cent and 21 per cent, respectively, from its 2008 baseline.

At HSBC, we have been cutting our energy use and waste. Globally, we reduced our electricity consumption by up to 29 per cent between 2012 and the end of 2018 – and cut our waste by 63 per cent in 2018, compared to our 2011 baseline.2 We’re also making good progress on our aim of getting 100 per cent of our electricity from renewable sources by 2030.

Why sustainability matters for SMEs - HSBC SG Business Banking

Fewer risks and greater competitiveness

Putting sustainable practices in place and improving your ability to measure and report on your environmental footprint can help you lower your company’s environmental risks. This will give you a stronger competitive edge when trying to win contracts with businesses seeking sustainability in their supply chains.

More businesses are realising that to remain relevant and grow, they need to be more sustainable. HSBC’s Navigator research found that 29 per cent of participating Singapore businesses are motivated to use sustainability to gain a competitive advantage.3



Your sustainable practices can also make your company more attractive as a workplace. Many young and discerning employees now pick an employer based on its green track record. A Deloitte survey covering 42 markets, including Singapore, found that millennials and members of Generation Z4 are more loyal to employers that address issues they care most about, such as protecting the environment.5

By making sustainability an integral part of your business, you are showing that you recognise the new realities of the planet. And as a result, you can swiftly adapt your processes and supply chains to changes affecting your business, helping you ensure its longevity.6

SMEs could also miss out on profitable government contracts if they don’t have robust sustainability practices.

Meeting changing demands

Demand for environmentally responsible products and services has mostly come from customers. But now investors are also demanding that businesses they invest in be sustainable, compelling many SMEs to measure and report their environmental impact.

Why sustainabliity matters for SMEs - HSBC SG Business Banking

About 86 per cent of Asian investors HSBC surveyed recently consider environmental issues important.7 Almost a third (31 per cent) always look at environmental, social and governance (ESG) considerations when they invest.

SMEs could also miss out on profitable government contracts if they don’t have robust sustainability practices. The Singapore Government, for example, procures only printing paper with the Singapore Green Label.8 This means that only paper suppliers with sustainable land and forestry management practices can win contracts with government agencies.

Firms that shift to making sustainability a core part of their strategy are finding that it improves the bottom line, reduces risks and increases competitiveness.



How can we help today?

 

1 CapitaLand, Global Sustainability Report 2018.

2 HSBC Holdings, April 2019, Environmental, Social and Governance Update.

3 HSBC, Navigator 2019, Singapore.

4 Millennials included in the survey were born between January 1983 and December 1994. Generation Z refers to those born between January 1995 and December 2002.

5 Deloitte, The Deloitte Global Millennial Survey 2019.

6 Interbrand, Sustainable innovation: Staying true to your brand promise.

7 HSBC, Sustainable Financing and Investing Survey 2019.

8 Singapore Ministry of the Environment and Water Resources, Public Sector Sustainability Plan 2017–2020.

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