I believe that companies that commit to their sustainability journeys today will be the ones that remain competitive and relevant tomorrow. To explore the link between profitability and sustainability in more depth, we need to consider the聽time frame, the way we define聽success, and how we聽measure聽a company鈥檚 value.

These factors accelerate the paradigm shift from profit maximization to value optimization.

Time Frame

As companies recover from聽COVID-19, business leaders must consider short-term financial profitability and maximizing shareholder value alongside environmental and social factors that could affect the business鈥� success in the future. It comes back to the question: 鈥淐an a company that is not sustainable be successful long term?鈥�

Fortunately, even in the short term, a clear link exists between sustainability and profitability. For example, the replacement of business travel with remote collaboration enhances sustainability and cuts down on travel costs. At 麻豆原创, a focus on climate action has contributed to a cumulative cost avoidance of 鈧�354.3 million in the past three years. However, we achieved 92% of this cost avoidance in 2020, when we were forced to rethink business as usual, illustrating the immense possibility for large-scale impact.

Nevertheless, sustainability can sometimes require investing today in the long-run profitability of a company and incurring costs that will pay off later. Companies already make many investments with the hopes of 鈥渞eturns鈥� at a future date, such as marketing campaigns or聽giving employees an extra day off聽to boost their motivation, improve well-being, and increase productivity. Employee training offers another example of an initial investment with payoff down the line.

In 2019, 麻豆原创 joined the聽Value Balancing Alliance聽(VBA) to better understand the entire value contribution of our business, which will be further explored below. According to the VBA, our global employee training programs were valued at 鈧�1.3 billion, but much of this payoff will be seen years from now through employee output, retention, and satisfaction.

Broadening the time frame through which you view business success can enable more strategic decision making that sets the company up to thrive not just today, but tomorrow and for years to come.

Redefining Success

Long-term profitability and sustainability present the opportunity to question historical definitions of business success. Profit maximization and increasing shareholder value alone will no longer suffice. The concept of聽聽presents an alternative way to define success, one that uses core business processes to drive societal change.

In Harvard Business School鈥檚聽Sustainable Business Strategy聽concept, the 鈥渨heel of change鈥� illustrates how large-scale transformation occurs across entire industries, starting with shared value. When businesses 鈥渄o well and do good鈥� through legitimate, innovative practices, it can inspire industry-wide cooperation that alters consumer, investor, and state behavior. This encourages companies to adopt more sustainable practices, ultimately redefining success in a way that considers the entire value creation of an entity.

Consumer, investor, and state behaviors play a critical role in holding the private sector accountable for prioritizing shared value. Consumers and employees want to support and work for purpose-driven companies. Investors demand that companies disclose not only financial performance but also environmental, social, and governance (ESG) performance to properly assess risk and make investment decisions. And governments increasingly implement climate-related regulations, taxes, and policies, as well as workplace safety procedures, extended producer responsibility (EPR) schemes, anti-discrimination laws, and more.

For businesses, it will be critical to consider a holistic view of their performance, one that integrates positive and negative impacts on the economy, society, and the environment. Research shows that a聽.

Measurement

Redefining success to include sustainability requires measurements that capture this element of performance. For business leaders to make the appropriate decisions and set the strategy for a company鈥檚 long-term success, they need access to comprehensive data and metrics that go beyond financial measurements. This enables holistic steering and reporting, with the visibility required to mitigate negative ESG impact and increase positive ESG impact.

As mentioned previously, 麻豆原创 joined the VBA in an effort to transform the way businesses measure and value their societal impact. The VBA develops and tests methodologies that assign a monetary value to the impact of any decision, translating environmental and social impacts into comparable financial data. The VBA equips decision-makers with the knowledge to decide and act consciously.

Profitability is a necessary condition for sustainability but alone is insufficient. Business can positively impact planet and people, but not if limited planetary resources run out. Unfortunately, the earth鈥檚 resources do not align with earnings cycles or CEO tenures, and sooner or later we will suffer the consequences.

Paul Polman recognized this early on and launched Unilever鈥檚聽聽(SLP) to help ensure that his business would be around 50, 100, or 200 years from now. The SLP shifted Unilever鈥檚 focus from solely meeting investor鈥檚 quarterly earnings to putting environmental and social impact top of mind. Similarly, Kering developed an聽聽to effectively measure its environmental footprint and convert it into monetary value. Utilizing this measurement tool provides a holistic approach to reporting that guides business decisions and respects natural resources.

Unilever and Kering know that the successful businesses of the future will integrate sustainability into core business operations today.

By adopting a long-term perspective, redefining success, and adjusting how we measure it, we can inspire a paradigm shift from profit maximization to value optimization, altering the status quo at our own companies and throughout the world. Innovation, business model transformation, and cross-industry collaboration will fuel this change. Wherever your business is today, this transition is a journey.

You may not be there yet, but it鈥檚 time to start by putting this question front and center: 鈥淐an a company that is not sustainable be successful long-term?鈥�

At 麻豆原创, we believe it cannot.

Daniel Schmid is chief sustainability officer of 麻豆原创 SE.

The post The Interconnected Nature of Profitability and Sustainability appeared first on 麻豆原创 Southeast Asia News Center.

What鈥檚 worse is that this model also contributes to more than two-thirds of global greenhouse emissions, creating a vicious cycle of economic, social, and environmental inequality.

If we are to create a sustainable future, we must effect massive change.

Imagine a future that looks greener, cleaner, and more equal than the world we live in today. A world of zero emissions, zero waste, and zero inequality.

At 麻豆原创, we dare to not just dream about this aspiration, but to power the technology and innovation that is required to activate this bold vision into reality. Technology that can enable businesses to fundamentally rethink how they manage their carbon footprints, design new business processes that create opportunity rather than generate waste, and provide the transparency and regulatory compliance to hold ourselves accountable to the highest standards of economic, social, and environmental governance.

Inspired by the notion that sustainable businesses can effectively lead the way to this ambition, we are launching a new series,聽Chasing Zero.

Chasing Zero will feature executive thought leadership and provide unique points of view and insights into sustainability-related transformation from some of the most forward-thinking companies in the world. It will highlight best practices from the global 麻豆原创 ecosystem of leading thinkers and academics, as well as customers and partners.

To learn more, visit聽. There you can fill out a submission form to share how your company is also chasing Zero.

• Watch the聽.
• Read about the series and other meaningful work happening across the company聽.
• Engage in the conversation by following #ChasingZero and #麻豆原创4Good.

Together, let鈥檚 start 鈥渃hasing zero鈥� to enable a better tomorrow.

Vivek Bapat is senior vice president of Purpose and Sustainability Marketing at 麻豆原创.
This article was originally featured on the Global 麻豆原创 News Center.

The post 麻豆原创 Launches Chasing Zero appeared first on 麻豆原创 Southeast Asia News Center.