Driving Profitability With Sustainability
Recent research from the MIT Sloan Management Review reveals that the link between sustainable business practice and profitability is growing.
The study, entitled “The Innovation Bottom Line,” surveyed 2,600 executives and managers about the results of implementing sustainable methods into their businesses. Of those surveyed, 37 percent reported a profit from their company’s sustainable initiatives—an increase of 23 percent over last year.
In addition to the correlation between a sustainable business model and profitability, the study also found a growing trend of companies shifting their focus to sustainable practices. The survey revealed a 20 percent increase of companies who have modified their core business model to take advantage of sustainable opportunities, totaling nearly 50 percent of all surveyed.
Unilever is ranked as one of the top sustainable companies in the world by the Dow Jones Sustainability Index. In its recent Sustainable Living Report, Unilever claims that improving efficiency by leveraging costs “improves our profitability and allows us to invest in the business.”
The business strategy described in the report focuses on a continuous interlocking relationship between cost leverage and efficiency, innovation and investment, and profitable growth. Unilever explains that the strategy “results in profitable volume growth, self-perpetuating the virtuous circle of growth.”
This type of business strategy is increasingly common among companies who aspire to improve their viability and profitability in both domestic and international markets. The CSR Reporting Solution from Wdesk allows companies to leverage their sustainability performance by helping them to tell their story in an accurate and cost-effective manner.
Kiron, D., Kruschwitz, N., Haanaes, K., Reeves, M., & Goh, E. (February 5, 2013). The innovation bottom line. MIT Sloan Management Review. Retrieved May 17, 2013, from http://sloanreview.mit.edu/reports/sustainability-innovation/ ","Companies who aspire to improve viability and profitability are increasing their sustainability efforts.