Environmental and sustainability initiatives are often seen as a net cost to business, but there are some cases where such initiatives can be good for business, according to Dr Simon Schillebeeckx, co-founder of Handprint Tech based in Singapore. Handprint aims to help companies profitably and seamlessly integrate planet-positive actions into business activities. In a recent conversation with Adept Economics Director Gene Tunny on the Economics Explored podcast, Simon shared examples of companies that have gone above and beyond regulatory requirements to contribute to the environment positively.
One example Simon discussed with Gene is a collaboration by Handprint with a large Australian sports brand. The brand wanted to determine if their sustainability efforts, such as planting trees in Australia with every sale, would benefit their bottom line. An A/B testing approach was used to evaluate this initiative, with 50% of customers being directed to the original store and 50% to a store that integrated sustainability messaging. The results were remarkable, with a 16% increase in revenue and a 16% increase in cart conversion. This increased sales and reduced cart abandonment rate, which is a significant issue in e-commerce. The brand was able to improve its business performance while making a positive impact on the environment.
Another example discussed in the podcast is the collaboration with an ad tech company, Teads. Teads enabled companies to link their advertisements with messages about the positive impact they were making. For instance, Uber Eats in Japan supported access to food for needy people, and this message was incorporated into their ads. According to Simon, the results of this campaign showed a 9% increase in brand recognition and positive brand recall, as well as a 32% increase in click-through rate on the ad. Handprint’s website provides further information on Uber Eats sustainability initiatives:
“Uber Eats, the renowned food delivery and takeout giant, has joined forces with Teads Care, supported by Handprint, to make a meaningful difference in the world.
By investing a portion of their advertising budget into the NGO Good Neighbors Japan, Uber Eats is now leaving a meaningful, lasting impact on society. Good Neighbors Japan is a non-profit organization that provides “good rice bowls” to single-parent households in need, ensuring that struggling families can adequately provide for their children.”
These examples highlight the potential of sustainability initiatives to boost business performance. Not only do these initiatives create a positive reputation and enhance brand recognition, but they can also drive sales and improve customer loyalty.
Furthermore, these initiatives can also have a positive impact on employee engagement, morale, and potentially productivity. However, Simon does not have the data to demonstrate a productivity impact at this stage. When employees see that their company is actively working towards making a positive impact, it can create a sense of purpose and pride. Employees are more likely to be engaged and committed to their work when they feel they are part of something meaningful and impactful.
In conclusion, sustainability initiatives can potentially boost business performance in various ways. By integrating sustainability messaging into marketing campaigns and ‘gamifying’ loyalty programs, companies can enhance brand recognition, drive sales, and improve customer loyalty. Moreover, sustainability initiatives can also positively impact employee engagement, morale, and, ultimately, it is hoped, productivity.
That said, we cannot say sustainability measures always benefit businesses. The experiences of different businesses will vary, and it is important to test the effectiveness of any sustainability measures introduced in the business. As business academics Alshehhi, Nobanee, and Khare observed in a 2018 Sustainability article:
“The relationship between corporate sustainable practices and financial performance has received growing attention in research, yet a consensus remains elusive.”
There are some compelling examples of win-win sustainable practices that boost business performance. However, we need to see how scalable this approach is and whether it is effective across various industries. Furthermore, any sustainability measures should be assessed on a case-by-case basis.
This article was authored by Adept Economics Director Gene Tunny and published on 23 January. For further information, don’t hesitate to contact us via email@example.com or 1300 169 870.