Here’s why a recession won’t stop your business from being sustainable
10th September 2020
The news that the UK entered its first recession in 11 years was no surprise for many businesses.
With economic upturn comes an expectation – and requirement, in many cases - that purse strings will tighten. This might be when owners of the corporate responsibility budget start to feel nervous.
Perhaps your own business is looking at where savings can be made and having second thoughts about investing in sustainability commitments.
But when we study recent history, you might be surprised to find that there won’t necessarily be a need to take cost-cutting measures to the CSR expenditure. In fact, you might find that sustainability becomes a bigger business priority than it was pre-pandemic.
We've been through this before...
Most of us will be familiar with the last comparable event, the “Great Recession” of 2009. At the peak of its fallout, 50 small businesses were closing every day, with unemployment peaking around 4.9% according to the Office for National Statistics (ONS).
And yet one year later, when business leaders were asked if they’d moved focus away from sustainability, the answer was a firm “no”.
A 2010 study by Accenture found that 93% of CEOs believed sustainability had become a crucial part of their company’s future success. Businesses that came out the other side of the recession determined that their internal sustainability agenda was not just a ‘nice to have’, but a real benefit to their business.
Sustainability grew in momentum over the following decade, in the boardroom and in government. In 2019, legislation was passed requiring the UK Government to reduce its carbon emissions to net zero by 2050. Businesses such as Drax made waves by being the first to announce carbon negative commitments, and technologies like electric vehicles, carbon capture and carbon offsetting projects gained exponential popularity.
Sustainability is here to stay
But will the projected “worst recession in 300 years” put a stop to this progress? The signs say no.
The public has embraced the reality of a climate crisis, and that mood has shifted too far to turn back the dial. Incremental gains have become a tidal wave of support: 45% of consumers say they’re making more sustainable choices when shopping and are likely to continue to do so. EV sales are continuously increasing in Europe, even in the first quarter of 2020 when the severity of the pandemic fallout became clear. And according to digital consumer intelligence company Brandwatch, March mentions of purchases made for personal ethical reasons were up 132% compared to December.
Our own research indicates that this mood holds fast in the boardroom, too. We asked over 1,250 business leaders, and over half (59%) of SME owners said that the pandemic has increased the importance of sustainability for their businesses. Two thirds (68%) said it’s made them more environmentally conscious.
Why does economic hardship equal better sustainability?
Firstly, being sustainable often simply equates to consuming less. Even for businesses that are weathering the storm, the pandemic has thrown light on our true business requirements. What do we need for operational excellence, versus what we want, or what we find ourselves doing because it’s simply the status quo?
Change gives permission to review and adopt new behaviours in all areas. Businesses that have stringently reviewed their consumption will be rewarded through less leaky budgets; it becomes as much about saving on the bottom line as it is about saving the planet.
Secondly, when the world turns upside down, trust becomes a bigger factor than ever for consumers making buying decisions. When the economic system failed in 2009, trust was deeply shaken. Many consumers started to vote with their money, choosing to spend with businesses that aligned with their values – much like we’re seeing today.
Business owners know that, despite the need to stabilise their business, to abandon their sustainable development goals wouldn’t put them in good stead with their customers or commercial partners.
It's all in the balance
Finding the sweet spot between financial necessities and environmental responsibilities will be crucial to a businesses’ success.
But we need to change the narrative from sustainability as a cost, to sustainability as a cost-saver.
When business owners understand lowering their energy costs can help save money during a time when cash flow is more crucial than ever, energy efficiency and ESG strategies present themselves as obvious short- and long-term solutions, rather than a burden.
Need a head start on reenergising your businesses’ sustainability agenda? Follow the three steps in our free digital guide.Create sustainability success – download your how-to guide now
3 successful businesses that started small and stayed sustainable
Sustainability has taken on a whole new meaning for businesses. Annual Corporate Social Responsibility (CSR) reports are behind us, and customers and stakeholders are...
How sustainability can boost your bottom line
Recent research carried out by Opus Energy shows that sustainability matters more to businesses than before the coronavirus pandemic. More and more companies are...
The benefits of an authentic sustainability policy
Sustainability is a major factor for consumers when it comes to doing business. Brands with a genuine commitment to sustainable practice can attract those...