Middle East

How early movers drive collective action

Sustainability is quietly growing into an undeniable force in the world, like ripples in water when a pebble cracks its surface.

It will undoubtedly become one of the most important business tenants in 2022. In fact, over the last few decades, this ripple effect—the first disruption to a system propagating outward and disrupting larger and larger parts of the system—has led to the need for a clear and coherent narrative about key issues across organizations. We were led to a place Promote collective action.

Most progress made in the field of sustainability in recent years has resulted from competitive actions driven by pioneering organizations that are aggressively advancing in the field. In this scenario, early adopters make a game-changer by triggering systematic adjustments in policies and regulations and encouraging others to respond to the climate change imperative.

In fact, we believe that solid sustainability propositions by early adopters are providing more diverse options for funding and investment across the industry to meet and achieve regional goals. We’ve seen it. No company can do it alone, so we all have to act to solve the climate catastrophe. Big questions remain about when this ripple will affect the majority and what businesses can do to tip the scales towards a new order of sustained prosperity.

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Organizations with strong and clear ESG goals hire better and record sustained employee retention. As workers and job seekers increasingly consider sustainability when making career choices, they are attracting the best talent in the market. In fact, in 2020, intranet company Unily released a survey showing that 83% of employees believe their employers aren’t doing enough to promote sustainability and tackle climate change. It became clear. Additionally, 65% say they are more likely to work for a company with strong environmental policies.

In addition, aggressive climate-focused companies are also benefiting from increased revenues, as the sale of environmentally friendly alternatives to conventional products is rapidly gaining momentum in multiple sectors. For example, in the U.S. between 2017 and 2020, plant-based meat substitute sales grew 16% faster than animal meat sales. From 2016 to 2019, electric vehicle sales increased by 26% annually, while conventional vehicle sales decreased by 2% annually. This provided multiple advantages for industry pioneers like Tesla and Volkswagen. Not only have they benefited from lower regulatory risk, but they also ensure continued access to future supplies of critical metals through long-term contracts with producers.

As for future investments, first movers with defined sustainability targets also enjoy better financing terms, including a lower weighted average cost of capital. New debt financing instruments offer low-cost loans to companies that finance green projects, or link financing costs to achieving sustainability goals.

This point is further emphasized given that Nestlé and Unilever have already invested $30 million and $15 million respectively in private equity funds that invest in and support the development of companies in the plastic recycling value chain. will be This is because Unilever is committed to getting there and being the first to do it! They already source low-cost renewable power, achieving $900 million in savings . This more than offsets the premium we paid to sustainably source plastic and palm oil. They are saving both cash and carbon abatement costs while reducing emissions. Not only do they benefit the environment (net zero emissions by 2039), they also seem to do it well! And 90% of our employees are proud to work there. And that’s why 79% feel their work contributes to their company’s Sustainability Living Plan.

Overall, however, companies need to do more to meet their ESG obligations across their supply chains. The pre- and post-pandemic economic and social turmoil has highlighted the need for even greater accountability on a global scale.

Ziad Chalhoub is Chief Financial Officer of Majid Al Futtaim.

https://gulfbusiness.com/sustainable-finance-how-early-movers-drive-collective-action/ How early movers drive collective action

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