DIANA’S NOTE

As many of the publications we follow have put more focus on writing about AI, and in a political climate more hostile to climate action than in previous years, I find myself increasingly excited to come across good reads on the topic of sustainability. This is why I decided to use this Season’s Greetings to highlight an article that does two things particularly well: it clarifies key terms related to sustainability and it reminds the reader of the importance of acting on it. I hope this piece will act as a small nudge to keep sustainability front and centre as we move forward in the new year.

WHY READ THIS
Discover why sustainability isn’t just another trend but a key part of achieving business success.

IN BRIEF
Most leaders now recognise the importance of sustainability when it comes to setting their business strategies. However, this subject is too often reduced to soundbites, leading to missed opportunities and a lack of meaningful progress.

THE 5 MYTHS

• Myth 1: ESG is the same as sustainability. ESG is a framework that assesses potential outside-in risks. It is and always has been about protecting financial performance. Sustainability, on the other hand, is about inside-out value creation. It is broader and based more on innovation and what an organisation’s long-term purpose is.

• Myth 2: Sustainability is only about climate change. Leaders need to ensure that they look at their whole value chain to identify where sustainability affects a range of issues including biodiversity, deforestation or microplastic pollution. Leaders should focus on the areas that overlap most with an organisation’s purpose and values.

• Myth 3: Sustainability is expensive. Many businesses are too cautious about investments in sustainability because the payoffs are always going to be long-term. However, postponing work on this issue is only storing up a bigger bill for the future. Leaders should approach this work as part of your strategy rather than viewing it as charity.

• Myth 4: Sustainability doesn’t sell. Sustainability should be a feature of a product and shouldn’t be used as an excuse for poor design. Many sustainable products are more expensive to produce. However, research indicates that consumers are much more likely to accept a fixed added premium than a standard relative margin.

• Myth 5: Sustainability is yesterday’s news. If you take the time to look into what is happening, it is clear that what we are seeing are multiple S-curves across many different technologies and sectors. Successful companies will be following these developments closely and investing accordingly.

THE BOTTOM LINE
These myths affect leaders’ ability to make true progress on sustainability, which is why it is important to be aware of them and to treat sustainability as a critical driver for business success.