Volvo Cars’ focus on sustainability is not just beneficial for people and the planet. It is also good for the company’s balance sheet. Here are some of the reasons why.
12 trillion US dollars. That is the estimated value of market opportunities for the private sector in supporting the United Nations Sustainable Development Goals (SDGs), according to a report by the Business and Sustainable Development Commission. And that is just one of many recent reports and research papers which clearly highlights the link between sustainability and profitability for future business. Harvard Business Review summarises it well: “Traditional business models aim to create value for shareholders, often at the expense of other stakeholders. Sustainable businesses are redefining the corporate ecosystem by designing models that create value for all stakeholders, including employees, shareholders, supply chains, civil society, and the planet. […] Embedded sustainability efforts clearly result in a positive impact on business performance.”
Volvo Cars recognizes that a sustainable approach is good for business. When it was announced that all new Volvos launched after 2019 would either be fully electric or hybrid vehicles, CEO Håkan Samuelsson made clear that the company was doing this in response to consumer demand – as well as in order to reduce our carbon footprint.
The same principle applies to other sustainability-related commitments, such as having climate-neutral global manufacturing operations by 2025. As well as reducing Volvo Cars’ environmental impact, they will increase the company’s efficiency, and profitability.
“Care for people and the environment runs through Volvo’s history. And guided by the SDGs, our sustainability program, Omtanke, now runs through our corporate strategy, and is critical to our future success,” says Stuart Templar, Director Sustainability at Volvo Cars.
Volvo takes a holistic approach to sustainability. The most obvious example is through our products, for example electrified vehicles, or through the Volvo Exchange System which restores replaced parts to their original specifications. But sustainability also informs our approach to manufacturing and logistics. All our plants in Europe only use electricity from renewable sources, while we are the first automotive manufacturer to transport cars from China to Europe by train rather than by boat, which reduce the environmental impact.
Sustainability is Good for Business
A commitment to sustainable business can also attract customers and strengthen brand loyalty. This especially applies to millennials (people born between early 1980s and 2000), as almost three-out-of-four are willing to pay extra for products and services coming from companies who are committed to a positive social and environmental impact, according to a Nielsen study.
Finally, a company’s most valuable asset is its people. And a sustainable approach helps drive internal engagement, as well as attract the best talent.
“People want to work for a company they are proud of, a company that makes a difference. Walking the walk on sustainability is key to being able to attract and retain the best talent now and in the future”, says Stuart Templar.
Ann Lindgren, who is part of the Global Graduate Programme at Volvo Cars and currently located in Rockleigh, USA, fully agrees: “A company’s sustainability efforts are definitely important to me when considering an employer, and I know many of my colleagues in the graduate programme feel the same. Even though Volvo Cars is an industrial company, I’m impressed by our sustainability initiatives.”
The study Global Tolerance showed that 62 per cent of millennials want to work for a company that makes a positive sustainability impact, and 53 per cent work harder knowing their work makes a difference to the world. Ann Lindgren thinks that Volvo Cars can continue to be an employer of choice for many talents: “I believe that Volvo Cars’ bold electrification strategy will attract many new employees. I think that some people will be attracted by the speed of development this change in strategy will require. Others, who perhaps haven’t considered Volvo Cars as an employer before, will be impressed by the range of Volvo Cars’ sustainability initiatives going forward.”
Originally published by Volvo Global Stories.