____ Posted Thursday January 18, 2018 ____
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Sustainability

Smaller Canadian firms turn to sustainability for growth and profitability

Only one-quarter of smaller Canadian firms are prioritising investment to become a more sustainable business

Two-thirds (66%) of smaller Canadian companies state that having sustainable business practices will improve their growth and profitability, according to data from HSBC. However, only 25% are prioritising investment to become a more sustainable business.

In the poll of more than 1,400 decision-makers across 14 countries, including Canada, half (50%) recognise that their customers are demanding products that consider environmental and social impacts. This can act as a competitive advantage. In fact, globally 59% of firms say that sustainable business practices will improve their growth and profitability.

Globally, companies in the Manufacturing sector (72%), and in India (68%) and Saudi Arabia (66%) are also the most likely to recognise this commercial benefit. Additionally, three in ten companies (30%) globally believe that becoming a more sustainable business will contribute to improving their financial performance over the next three years.

To unlock further growth, one-quarter (25%) of smaller Canadian companies have prioritised investment to become more sustainable, contrasting with firms in Saudi Arabia (34%), Hong Kong (33%) and Australia (33%) being the most likely among those polled to have done so. Globally, Mining (36%), Professional Services (34%) and Utilities (33%) sectors show the greatest commitment to becoming more sustainable in terms of investment.

"Smart sustainable business practices deliver real prosperity for everyone," says Linda Seymour, Executive Vice-President and Head of Commercial Banking at HSBC Bank Canada. "However, while many smaller companies are trying to do the right thing, they face intense competition, tight profit margins and the costs of meeting existing responsibilities. At HSBC, we take the extra time and effort to help smaller firms continue to grow and move towards sustainable business practices."

BREAKDOWN OF GLOBAL RESULTS


% of smaller firms
having
sustainability in
their top 3 long-
term objectives

% of smaller firms
saying sustainable
business practices
will improve their
growth and profitability

% of smaller firms
prioritising
investment to
become a more sustainable
business

Global

30%

59%

27%

Australia

34%

61%

33%

Canada

29%

66%

25%

China

32%

54%

23%

France

22%

56%

27%

Germany

26%

62%

25%

Hong Kong

30%

56%

33%

India

28%

68%

19%

Indonesia

43%

62%

31%

Mexico

24%

55%

23%

Saudi Arabia

36%

66%

34%

Singapore

26%

54%

25%

UAE

36%

44%

23%

UK

19%

60%

27%

USA

28%

56%

28%

 

On average, only 18% of smaller firms rated sustainable actions as important to their business today; however, nearly half (46%) said they are important to them in the short to medium term (next three years). The action that has gained more importance going forward for these companies is to set up a dedicated team to be accountable for implementing Corporate Social Responsibility (CSR) initiatives.

An important area businesses can address now to become more sustainable is to find operational efficiencies in their supply chains. Almost half (47%) of leaders identify this as a contributor to their company's financial performance over the next three years.

Practical steps that firms can take to put sustainability at the heart of their business include:

• Looking for efficiencies in their supply chain that can be both green and cost-effective. For example, solutions which mean that raw materials travel shorter distance can help cut emissions and save transport costs

• Adapting to customers' changing preferences by changing their business model. Environmentally-conscious consumers may respond well to products sourced and produced in a sustainable way, which could boost revenues

• Investing in renewable sources of energy such as wind turbines and solar panels as part of broader efforts to manage their environmental footprint

• Introducing and enforcing codes of conduct and policies on issues such as human rights and relationships with local communities

• Reporting on Environmental, Social and Governance (ESG) performance. Transparency can be an important first step in winning consumers and investors' trust

For its 2017 survey HSBC polled decision-makers of companies with between 200 and 2,000 employees in Australia, Canada, China, France, Germany, Hong Kong, India, Indonesia, Mexico, Saudi Arabia, Singapore, the UAE, the UK and the US.




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