Understanding who your business affects and how they affect your business is key to long-term success. If you only focus on customers, you are falling way short. To truly take your business from local to national and on to global levels, you have to consider all the ways your company interacts with the world around it and, most importantly, what stories you are telling.
Stakeholders and sustainability
Stakeholders are looking to invest (whatever that investment might look like) into a well-run, profitable company that is ambitious and moving forward. Sustainable investing is on the rise and more than that, companies that invest in managing their resources show higher investment returns.
When we take a step back from the ‘feel-good factor’ of sustainability and think about it from a governance perspective, we can see what is so obviously true. We know that good governance leads to higher performance in a company and by demonstrating that you are able to run your company with solid, integrated reporting on your financial and non-financial KPIs, you can demonstrate to your stakeholders just how well-positioned and efficient you are.
With a new wave of financially independent millennials on the rise, we have to accept that they are going to be controlling the wealth of future generations. When they’re looking to invest in companies, those that show a clear consideration of their impact on the environment and society around them will be more attractive.
A business case can be made for sustainability, not just from a future-proofing standpoint:
“Investors engaging in sustainable, responsible and impact investing . . . rely on information like a company's energy emissions, employee policies or executive pay structure to better evaluate the long-term health and future financial performance of their investments. Many are broadening their focus to include corporate governance, invoking investing's fundamental tenant — diversification — as one measure of a board's ability to minimize risk and maximize shareholder returns.”
— Peter T. Grauer, chairman of Bloomberg LP and co-founder of the U.S. 30% Club, excerpted from Investment News
What do your stakeholders want to know?
Ultimately, stakeholders want to know what kind of company they are doing business with. One of the key indicators for a public company's success is their quarterly earnings reports. These only measure one thing, though: bottom-line profit. The reports don’t show how the company got its revenues, or just how much it affects the share price.
In 1994, when John Elkington coined the phrase 'Triple Bottom Line,' it kickstarted a revolution of business owners that didn’t want to be held hostage by a 90-day profit cycle. Instead, those who wanted to consider the environmental and social impacts of their work could add a ‘bottom line’ figure to report on.
Today, we see many different ways this has developed, from advances in reporting by organizations such as the Global Reporting Initiative or Integrated Reporting, all the way to the growing movement of companies becoming certified B Corporations.
With the planet running out of resources, it has never been more important that we start to look at new ways of doing business. We are investing more than ever in reporting our sustainability efforts and we know that it’s what our stakeholders want, as well.
The question now is how you take all of the data you use to create your reports and make it accessible — and meaningful — to your stakeholders.
How to tell your story
The ability to control the narrative of your company in the eyes of your stakeholders is incredibly important for efficient operations, investment potential and growth plans. We recommend a very simple process for ensuring that you are using the right stories from within your company to drive conversations:
Sustainability, put simply, is the ability to manage your resources so that you don’t use more than you put back. If you are doing great work towards a more sustainable future for your company, then why not tell the world? Be part of a wider conversation that will drive more revenue to your bottom line while carefully managing our shared resources.