Sustainable choices can help companies weather setbacks better

Sustainability is slowly becoming a norm, yet company boards aren’t always sure whether it’s actually worth the effort. Now, they have one more reason for going sustainable. New research suggests sustainability initiatives make businesses more resilient in the long term.

A paper published in Ecological Economics explores the relationships between environmental practices and company performance in times of crisis, as compared to the business as usual. Building on surveys of 120 local firms in Brazil, a country that experienced an economic crisis between 2013 and 2017, the paper suggests that even when things go wrong, benefits from environmental practices rarely vanish. 

The researchers looked into the performance of businesses across multiple industries and a variety of environmental practices, including the installation of emission filters, acquisition of green technology and environmental reporting. The findings were based on employee responses rather than hard facts, but the researchers made sure to interview only people who were knowledgeable about the actual situation within a company in the relevant areas.

The findings suggest that sticking to sustainable choices puts companies in a win-win position, as compared to other types of investments that often turn out well only under favorable conditions. Meanwhile, green innovations in times of crisis may allow companies to find unconventional solutions that help to reduce costs and retain clients despite adverse external factors.

Thus, sustainability serves as a “survival factor” for companies. This particularly holds true for strategic decisions about sustainability such as an investment into green technology, which, the researchers suggest, almost never fail.

Downsizing on strategic sustainability decisions in periods of crisis create further trouble for companies in the long term, with more frequent environmental accidents and lower employee satisfaction. While the researchers do not claim the universality of their findings, they would like to explore whether their insights would hold true in other countries and regions.

Their research adds to a growing body of evidence suggesting clear competitive advantages for companies that actively invest in green technology, energy efficiency, and other sustainable practices. It also highlights the fact that sustainable choices are often central to successful business performance.