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The business value of social sustainability

March 7, 2024
in Business
The business value of social sustainability
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Social sustainability is good for business. It can help to unlock new markets, attract and retain customers, build trust and credibility, and spark innovation. And companies are taking it seriously: a recent NTT report found that more than 40 percent of executives surveyed said social sustainability is a top imperative for their C-suite and Board of Directors.

The United Nations defines social sustainability as, “Identifying and managing business impacts, both positive and negative, on people.”

Directly or indirectly, companies affect what happens to employees, workers in the value chain, customers and local communities and it is important to manage impacts proactively.

NTT’s report, based on a ThoughtLab survey of 250 senior executives with a combined revenue of $2.2 trillion, underscores the financial advantages of prioritizing social sustainability. These firms collectively unlocked more than $177 billion in additional revenue due to their social sustainability endeavors. That’s an average of $710 million in revenue per company.

Benefits of social sustainability

Businesses are investing to build momentum in their social sustainability efforts. Those companies defined as beginners (about 22 percent of those surveyed) reported spending about $5.3 million on average on social sustainability, while those considered leaders (also about 22 percent of those surveyed) invest nearly four times as much, at $19.5 million on average.

More than 60 percent of firms surveyed said they plan to increase their spending over the next two years.

The benefits are clear. Companies reported financial, strategic, and operational improvements, which only grow as they move further along in their social sustainability journeys.

Businesses that invest the most in social sustainability reported an increase in revenue of up to 9.6 percent and a boost in employee productivity of up to 11.4 percent, showcasing the transformative power of sustainability initiatives on workforce efficiency.

Issues around social sustainability – such as lack of opportunity and deep-seated inequalities – can have a substantial impact on local economies.

For instance, the World Bank estimates a $160.2 trillion loss in human capital wealth from gender inequality. That is why it is important that the NTT report found social sustainability initiatives not only bolstered individual firm revenues but also contributed significantly to the broader local economy.

The study estimated that social sustainability unlocked nearly $675 billion in GDP across eight regions (U.S., Canada, Mexico, Germany, UK, Australia, Hong Kong, Singapore) and five industries (Manufacturing, Telecoms & Tech, Retail & CPG, Financial Services, Healthcare & Life Sciences). A strategic shift towards further sustainability leadership could unlock a further $115 billion in GDP.

Social sustainability and the future of business

NTT’s report shows that companies are making progress towards their social sustainability goals, and approximately one-quarter are integrating those goals into their products, services and business models. More than 50 percent of those surveyed said over the next two years they expect their social sustainability endeavors to improve productivity and support economic growth, boost jobs in local economies, and lead to higher quality education.

By aligning social and business values, these companies at the forefront of social sustainability drive top-line and bottom-line growth, enhance reputation, and bolster shareholder value while also contributing to long-term sustainability for the wellbeing and prosperity of all.

Learn more about the business case for social responsibility.

>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : CIO – https://www.cio.com/article/1312267/the-business-value-of-social-sustainability.html

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