Companies are more than the products and services they offer; they represent a set of values, which determine who they attract as customers, partners, investors and employees.
Environmental credentials are an increasingly important part of brand identity, as all those connected to a company – whether they are buying from them, backing them, or working for them – want to know that the organisation cares about the world around them, and is taking steps to look after that world.
In order to strengthen their business network, it’s more important than ever for companies to have a strong set of environmental policies in place, which help them to nurture relationships with every type of stakeholder.
Taking a ‘green approach’ to doing business will only enhance corporate reputations, and climate impact technology is a powerful means to prove commitment to positive change.
How do good climate credentials benefit customer relationships?
Business reputation is now as important to consumers as the product or service on offer, with companies’ corporate and social responsibility (CSR) values influencing who people choose to patronise.
For example, Global Web Index research has found that 7 in 10 UK and US consumers will stop buying from a brand as a result of poor or misleading CSR, while 84% are put off by a bad environmental track record.
This consumer demand for ethical, sustainable business practice is having a direct impact on the investment that companies are making in their environmental practices. Three quarters of businesses now want to achieve net-zero carbon emissions, according to the IPCC, with 9 in 10 intending to reach this target by 2030.
If businesses can track their carbon footprint and prove to current and potential customers that they are taking steps to limit their impact on the environment, this creates a powerful brand approach that will open the door for new business opportunities.
How does environmental footprint impact corporate relationships?
Customers aren’t the only audience with high ethical expectations; companies’ climate-based practices can have a major impact on their corporate partnerships and sponsorship deals, too.
An interesting example of this relationships is energy giant BP, which has been a major patron of the UK arts over the years, sponsoring organisations such as the British Museum, the Science Museum and the Tate.
However, at the end of 2019, the Royal Shakespeare Company terminated its partnership with BP due to the corporation’s poor environmental credentials. This prompted a significant response from the brand; in early 2020, BP pledged to go carbon neutral by 2050 , becoming the first oil major to make such a declaration.
Alignment of brand values is critical when corporations are deciding who to sponsor or partner with, so companies need to make sure that they are taking steps to minimise their environmental footprint if they are seeking opportunities with businesses and organisations that already have strong climate credentials.
How can eco-credentials affect investor relationships?
Like corporate partners, investors also care deeply about a company’s reputation, as the business in their portfolio represent their own personal and professional principles.
Demand for ethical investment opportunities has increased considerably over the past decade, with its total value rising from $13 trillion to over $30 trillion between 2012-2018. Companies that have been able to track their environmental footprint and demonstrate their commitment to greener processes have benefitted hugely from this trend, as individuals and institutions that choose to back them know they are getting an ethical investment with profit potential.
An interesting example of this is US carpet company, Interface, which has shown how sustainability can equal profitability by steering away from the environmentally irresponsible practices in their traditionally high waste industry. By adopting a greener approach to carpet production, Interface gained a lot of popularity with investors over market competitors, and now generates over $307 million in annual revenue.
How can a company’s CSR policy positively impact recruitment?
Last but by no means least, a company’s attitude to CSR and the environment can have a hugely influential impact on attracting and retaining talented people.
Today, salary is not the only recruitment driver; among younger workers in particular, it’s important to represent a brand with strong social and ecological principles. According to research, 40% of Millennials have chosen a job because of the firm’s sustainability policies, while 10% of professionals would take a significant pay cut if it enabled them to work for an organisation whose brand values they shared.
These statistics underline the fact that employers can no longer rely on financial compensation to attract the best talent. A strong environmental reputation can help them to find committed, caring staff, who are leaders in their field of expertise.
Getting a handle on environmental footprints
As the examples we have shared show, a company’s attitude to the environment no longer reflects just its internal values; it impacts key relationships, from investors and corporate partnerships, to customers and employees.
To build this reputation, businesses need to understand their current climate footprint – and this is where many fall down. Only through business travel tracking and environmental impact technology will they be able to analyse their current performance, and put strategies in place to reduce and offset carbon emissions where needed.
Voyage Manager is helping businesses of all sizes, in all sectors, to get a handle on their climate footprint by tracking corporate travel, and analysing where greener decisions can be made – improving their reputation and creating new business opportunities in the process.
To see how climate impact tools can improve your environmental credentials, book a free Voyage Manager demo.
