How sustainability practices can help organisations build for longer

Building enduring businesses that deliver sustainable returns for shareholders and other stakeholders in society remains a paramount objective for business leaders.

As the competitive landscape continues to evolve due to technological innovation, talent gaps, changing business models, and increased levels of uncertainty and complexity, organisations must determine how to build long-term competitive advantage to ensure their financial success, including remaining relevant and delivering their business growth strategy.

In the last few years, we have witnessed a significant drop in the average lifespan of businesses, indicating the challenges organisations face in remaining viable in the long term.

As a result, organisations can no longer apply a business-as-usual approach to matters affecting their long-term growth and survival.

The ability to balance short-term and long-term priorities is a critical skill required for success today. This is where sustainability comes into the picture.

Sustainability, when applied correctly, can help organisations understand the relationships between their environment, stakeholders and their financial success over time. It also enables organisations to identify the material non-financial issues that impact value creation.

Organisations must leverage sustainability to gain insight into trends likely to shape their business’s future, understand their unique selling proposition, and build sustainable competitive advantage.

It includes product and pricing innovations to maintain its market differentiation. It would also enable the organisation to articulate the changes and transformations that are needed.

For example, organisations can identify resources that need to be enhanced for future success and trigger efforts to ensure that those resources are not only available in the present but equally in the future in the required state, such as talent.

Climate transition risk is another area where organisations can identify opportunities early for transformation and growth. Contextualising how climate transition risks affect an organisation can yield insights that shape today's decisions, positioning the organisation favourably in the market.

Sustainability can also help organisations identify the partners they need to deliver their purpose.

Sustainability can bring clarity to alignment with an organisation’s purpose.

Organisations will work to solve real societal challenges while also generating financial returns, and having the right partners on an organisation’s journey to deliver purpose, results in sustainable growth, including access to affordable finance and capital.

The writer is a partner at PricewaterhouseCoopers. He is an author who writes and speaks widely on corporate reporting topics.