Ask any FMCG business owner if they want to be more profitable, and the answer will be a resounding yes. But ask about sustainability, and the answer can be a little more complicated, especially in the current situation. But it shouldn’t be.
Did you know that during the 2008 recession, companies committed to sustainability practices achieved “above average” performance in the financial markets, translating into an average of $650 million in incremental market capitalization per company?
Or that investors are now able to track the high performers on ESG (environmental, social and governance factors) and the winners here are also showing better financial performance?
Sustainable means profitable
The two concepts of profit and sustainability are not at odds, but instead interwoven.
Take Walmart, who aimed to double fleet efficiency between 2005 and 2015 through better routing, truck loading, driver training, and advanced technologies and by the end of 2014, had improved fuel efficiency approximately 87% avoided 15,000 metric tons of CO2 emissions avoided — and they made savings of nearly $11 million.
Coupled with the fact that consumers want to know that the companies are making serious sustainability efforts, and with the FMCG sector responsible for over a third of global greenhouse gas emissions, now is the time to act.
Michel Porter and Mark Kramer pioneered the idea of “creating shared value,” and have suggested that businesses can generate economic value by identifying and addressing social problems that intersect with their business. You can do the same, and the great news is, the tech is already one step ahead. AI is meaning that you don’t need to wait for the push of government regulation. Instead, you can access your own personalised steps to limit waste, engage shareholders in your mission and deliver real change.
Here are three steps we recommend to have a more sustainable, profitable FMCG business.