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Sustainability

Demand for Sustainability in Future Business Models

Posted 08 jun 2022 by Kimberlee Sinclair Executive Director, H.B. Fuller Company Foundation

Demand for Sustainability in Future Business Models

If you do not have sustainability in your current business model, you could get left behind. Today, consumers are demanding sustainable practices and production from businesses. Statistics show that 75% of Gen Z (people born between 1995-2010) prefer to purchase from sustainable companies rather than for the brand. This means that, if you are not working towards sustainable systems, you could lose this demographic altogether.

How Sustainability Could Affect Your Company

More than ever, consumers are making purchasing decisions based on how it affects our environment. From the cars they drive to the food they eat and the clothes they buy. Studies show that we are moving into a future where sustainability is a priority in business structures. Consumers are now taking the time to investigate business models and production systems to determine the legitimacy of businesses’ environmental goals. A report by the Harvard Business Review shows that 96% of large firms advocate for environmental change in their systems but do not follow through with their claims, causing consumers to revert to small businesses and more reliable companies.

Demand for Sustainable Packaging

A recent survey found that 74% of consumers are willing to pay more for sustainable packaging. Due to the rising demand for sustainability in companies' production and packaging, more businesses are searching for the most affordable and effective ways to convert. At H.B. Fuller, we provide an array of ways to alter packaging systems with more sustainable and eco-friendly alternatives. We align our products with the UN’s goals for sustainable growth, to accommodate environmental regulations worldwide. When choosing a sustainable packaging system; Walmart’s Sustainability Cycle is a great starting point. They prioritize using a sustainable source, supporting recycling, and optimizing design. To see the effects of this system, view the diagram below:

Diagram

With this system in mind, we are working more and more with our customers to identify and use materials that are sourced sustainably, support recycling and can optimize design to protect consumer products.

The Boom in Green Building

Glass Walkway

Due to the pandemic, employees became increasingly concerned about the buildings in which they work. They are now more aware of health and safety issues and they expect businesses to adjust accordingly. Whether it is increasing air quality, having smart building technologies, or providing contactless systems, there are many ways to move towards a more sustainable workplace.

For example, when building our new site in Cairo, Egypt, we are adhering to the high green building standards, including using materials with SRI (Solar Reflectance Index) value, adhesives with low VOC (Volatile Organic Compounds), and by using equipment powered through VFDs (Variable-Frequency Drive) to generate energy savings and efficiency with renewable energy sources.

We also offer construction adhesives and solutions that help customers achieve their sustainability goals. for example, we offer a gas tight insulating glass solution, called 4SG, which is revolutionizing the impact windows have on the energy efficiency of a building. We also produced a faster, more convenient alternative to concrete, called Fast 2k. When using our Fast 2k you can mix, pour, and set in less than an hour.

Additionally, we offer an HVAC coating, called Foster 30-36 HF, that is halogen free and meets green building standards. It is projected that employees will continue to push building owners and operators to implement more sustainable and efficient solutions in the long term.

Investors are Looking for Sustainable Companies

Institutional investors are inquiring about ESG (environmental, social, and governance) performance now more than ever before. This trend has shown an increase in the Principles for Responsible Investment (PRI), which manages about half of all professionally managed money globally. They have pledged to integrate ESG factors into future investment decisions, to reduce risk and increase returns over the long term. As stated by Doug Johnston, “Investors are looking for reassurance that companies understand the linkage between non-financial performance of the business and the successful delivery of the business strategy.” If companies are unable to incorporate ESG performance into their corporate strategy, investors will be unlikely to invest.

Employees Want to Work for Companies that Prioritize Sustainability

Sustainable Working

In a recent survey, almost three quarters of millennials would choose a smaller salary for an environmentally responsible company. This has been a huge sign to big businesses to align their company goals and values to that of the new generation. This trend also has caused a change in employee retention. Almost 70% of respondents in the same survey responded that, if a company had a strong sustainability plan, it would impact their decision to stay long-term. Furthermore, 30% responded that they have left a previous job due to a lack of sustainability within the company.

How to Become an Environmentally Friendly Business

The biggest hurdle companies face when pivoting towards a sustainable business structure is the cost. Although the initial cost of becoming environmentally friendly might be high, the surge in consumer demand for sustainable products has made way for new markets and opportunities. Research has shown that businesses that have made the switch have been able to build public trust, enhance their brand reputation, and improve their bottom line. For example, HP’s pivot towards sustainability helped increase the company’s sales in 2019 by over 1.6 billion dollars. If that is not enough reason to switch, research also showed that from 2013-2018 the number of products marketed as sustainable increased 5.6 times faster than products that were not.

With consumers demanding change from governments and businesses to ensure the future of our planet, adapting to a sustainable future has become a priority. Companies are expected to invest, innovate, and pivot their business structures to protect their long-term profitability and viability.

Check out our sustainability section for even more ways we can help the products we use every day become more sustainable.


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