6 minute read
How sustainability unlocks value in your business
Seven ways in which Sustainability
unlocks value in your business
Photo by Chelsea on Unsplash
While practicing sustainability is considered the right thing to do, many owners question the inherent benefits of pursuing it within their businesses. Charne le Roux of GreenSpa.Africa explains why they should invest in sustainability
e still see sustainability as a luxury investment or a public relations exercise driven by moral duty. W Consequently, ‘sustainability’ is often incorporated into some or other social responsibility initiative, residing within an HR or PR department commandeered for this purpose. But unless underscored by a much broader commitment, such initiatives often fail to reach critical mass beyond the limelight of the launch.
The importance of sustainability as one of a spa’s business primary objectives was emphasised recently by the Green Spa Network, which stated that going green is very much about staying competitive and that by not adopting sustainable practices, spas overlook a key strategy for growth.
Alannah Weston, who is group chair of Selfridges, the well-known high-end fashion and cosmetics store in the UK, was asked in an interview a few weeks ago whether a company can be sustainable and profitable at the same time. Her answer was that ‘companies will not be profitable unless they are sustainable’.
Responsibility
Consumers and investors have honed in considerably on sustainable products and services over the last 20 years and this has manifested positively in buying patterns and habits. More and
more consumers now believe that they have a responsibility, through their purchasing power, to make a positive impact on the environment and society.
And this responsibility is increasingly being discharged in the spa environment. Sustainable spas have become the destinations of choice for a discerning clientele, where prospective spa guests now weigh a spa’s environmental conservation efforts and community upliftment practices before rewarding them with their custom. And, passing muster, those spas that have been shown to incorporate authentic, natural and indigenous treatments and hire local staff thereby contributing to their local communities, attract the most
benefit from the economic stimulus. The ability of smaller businesses to expand their operations, better their infrastructure and implement a greater diversity of commercial trade, often follow community success.
In detail
But let’s consider in more detail seven points that demonstrate why investment in sustainability will generate benefits to spa businesses.
1The financial performance of sustainable companies worldwide provides a good starting point. Already in 2012, an analyses by Deutsche Bank evaluated 56 different studies, all of which concluded that companies with high ratings for environmental, social, and corporate governance generally had lower costs. The Deutsche Bank study found that almost 90% of those studies showed that such companies outperform the market in the medium and long term.
Additionally, a 2017 Boston Consulting Group study also found that sustainable companies attract higher financial valuations.
2As already indicated, consumers and investors alike have shifted their focus significantly in recent years, and
when it comes to their acquisition decision making, sustainable products and services enjoy strong preference. In late 2019, a survey conducted by Accenture, a Fortune Global 500 professional consultancy, found that more than half of consumers said they would pay more for sustainable products. The survey of 6,000 consumers in 11 countries across North America, Europe and Asia, confirmed that more than 80% of consumers consider it important for companies to design products that are meant to be reused or recycled. Nearly 75% of the respondents indicated that they are currently buying more environmentally friendly products than they were five years ago, and over 80% of them expected to buy more over the next five years.
3Sustainable businesses foster innovation, the backbone of success, by identifying new opportunities or creating new products and services to conform to environmental standards or social needs. By way of example, the Puma company developed a tool to measure the cost to nature
Photo by Lukas Pexels
of their manufacturing process, calculating the volume of potable water consumed, pollution caused and topsoil lost when a new product is created.
A large cosmetic manufacturer in South America, Natura, recently started developing products specifically aimed at protecting the biodiversity and traditional knowledge in Amazonia, over and above already making products that are natural or organic. Closer to home, Esse Skincare, which has its head office in Kwa Zulu Natal, has its whole range of products certified organic and carbon neutral, and in addition, has received several awards for its cutting-edge and advanced innovations in the area of formulation, including for an intensely hydrating serum (containing hyaluronic acid) and its probiotic serum.
4Adding up savings that arise from the reduction in energy and water use, improved staff retention, lower waste generation and better collaboration across different markets, sustainable spas generally enjoy lower overall operational costs.
5Sustainable businesses are also employers of choice, by offering healthier working environments to their staff, engaging their staff in decision making processes and collaborating with their immediate communities. Employee morale and motivation are much higher in green companies and this translates into reduced absenteeism, improved productivity and a marked reduction in staff turnover.
Photo by Aaron Burden on Unsplash
6It is no surprise then to note that sustainable companies are getting access to special funds at preferential rates. Green Bonds and similar financial instruments are increasingly becoming available in the market. For example, the Johannesburg Stock Exchange itself already offers Green Bonds to businesses to stimulate investment in
sustainable infrastructure, technologies and services. These funds are exclusively used for the financing or re-financing of new or existing eligible green projects that have a positive environmental benefit. Many of our local banks are also gearing their funding in this direction, with Nedbank saying that it would prefer to offer financing for projects in energy efficiency and renewable energy, such as landfill gas, solar, hydro and wind projects. This came alongside an announcement by the bank (in which it was joined by the other major South African banks) to withdraw funding for the construction of new coal-fired power plants.
Green funding is, however, not just available for large businesses and multi million rand projects. The Green Fund, driven by the Department of Environmental Affairs, specifically targets SMMEs who can demonstrate a positive sustainability impact, whether in service or product delivery.
7Lastly, we are seeing an increase in regulation around business activities that have environmental and social impacts. The Carbon Tax Act of 2019, the Waste Act of 2008, the Air Quality Act of 2004 and the Employment Equity Act of 1998 being some examples. The King III report on corporate governance that applies to the governance structures and operation of companies in South Africa provides for specific measures to promote ethical socio-economic and environmental actions. Sustainable businesses face fewer operational risks in complying with these regulations because they have already adapted their businesses to meet environmental and social challenges.
Taking all of this into consideration, it is clear that what needs to happen now is for spa businesses to start thinking about sustainability as a critical corporate survival tool.
Charne le Roux is a leading sustainability expert in the wellness industry and the founder of GreenSpa. Africa. She was a senior partner in the law firm Adams & Adams, heading the firm’s sustainability initiative as an accredited professional of the Green Building Council. Le Roux developed the first dedicated organic spa in South Africa, is the author of the Green Spa Guide, and developed a sustainability audit tool for spas and salons, the Green Spa Calculator. charne@greenspa.africa
