For years sustainability has been seen as something that is a personal choice. If an individual is worried about the environment it is up to them to make the choices that they feel are best to ensure the world is a place they and future generations would want to live in. In the past these available choices have been limited; of late there have been more and more choices available for individuals to exercise. There are now electric cars which get better overall mileage than gas-powered vehicles available to purchase. Your local grocery stores advertise their locally sourced products which cut down on the emissions that are created to bring the food to the shelves to choose from. Solar panels are available to install on homeowners roofs to use less electricity which today is mainly generated from coal or natural gas. Those are just a few examples of where individuals can now choose products with Sustainability in mind.
It can be argued that the examples provided above cost more which depending upon the overall calculus of the total cost may or may not be true. There are many ways to calculate the true cost of items whether they include only the purchase price as opposed to the overall costs such as the lifetime cost savings as well as the pollution that is emitted in the environment and the related negative effects which affects us all. It probably cannot be argued that if the purchase price of the sustainable item is equal to or less then what is readily available today, there isn’t much of a decision, people will choose the item that costs less. In this way they enjoy the cheaper price along with the benefit of being more sustainable.
What does this have to do with Mid-Market companies? Potentially a lot. According to Pew Research 74% of Americans think that the country should do whatever it takes to protect the environment. This translates into how they buy their products and services too. If they have a choice they will choose the sustainable alternative – many times even if it costs more. Harvard Business Review released an article stating that consumers are voting with their dollars – against unsustainable brands.
Mid-Market companies need to aware of this trend in consumer preferences as it really can affect their bottom line. Having some sort of a strategy to become more sustainable should be at the forefront of their business model. In the US there isn’t any kind of federal mandate at this time though some states and/or local municipalities do have some base requirements. However the EU does have mandates which can affect companies in the US.
RSM has services in ESG reporting as well as implementing business applications such as the Microsoft Sustainability Cloud to assist in this strategy. I will be doing a deeper dive into both in the near future, be on the lookout for more details.