If a global business wants to grow, where should it focus?
One word: Sustainability.
In a recent survey published by HSBC’s Navigator, entitled “Made for the Future”, sustainability is the “fourth-most cited growth driver among firms expecting their business to grow in the next 1-2 years.”
According to the report, sustainability is only “behind the strength of the customer base, the quality and availability of the workforce, and the quality and availability of suppliers and raw materials.”
Yet, even these are tied into this ever increasingly important business model.
The international banking company surveyed more than 2,500 businesses from 14 countries and territories asking how they felt about their growth potential in today’s economic climate of heightened trade tensions (the survey was taken just as the US government raised tariffs for the third time), political discontent, and rapid technology advances.
The overall sentiment was optimistic.
Worldwide, companies felt that “improving productivity” and “adopting new technologies,” were the “most important sources of opportunity.”
But only if done in the context of sustainability, which was cited as one of the most important factors for ongoing success, regardless of business size or location. Environmental sustainability “now permeates all aspects of business strategy.”
For example, consumers not only favor environmental-friendly companies, but firms are seeking out such companies to do business with.
Employees are just as particular. In order to attract and keep the best people, businesses must invest in sustainably-sound environmental practices. Of those who participated in the survey, 24% said that “this is now an aspect of recruiting and retaining the best people.”
Also, according to the report, there are three major internal and external pressures that are helping bring sustainability to the fore:
- The end consumer
- The need to achieve operational efficiency
It is interesting, though, that these pressures vary from region to region.
In Asia and continental Europe, for example, competition is the driving factor. And while green technology and policies in the past helped differentiate a company from its competitors, business leaders say this is now a necessity for growth into new markets.
While in North America, the main pressure is the need for operational efficiency driven by governmental policy and public opinion.
The report finds it interesting that operational efficiency is less a pressure for companies in Europe, where the three biggest sources are competition, the end customer and government regulations.
Also, companies are increasing their level of investment to become more environmentally sustainable. According to the report, 45% of companies surveyed say they plan to increase investment in the next 1-2 years. Among them, 65% plan to increase their level of investment by more than 5%.
In addition to sustainability, the report also surveyed corporate leaders on their take on outlooks regarding the influence of technology, innovation, people, and geographical regions. For a copy of the survey, go to: https://www.business.hsbc.com/navigator.
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