This is a conclusion I have come to after thousands of hours of working with sustainability and circular economy as a value driver. With my team, I did some desktop research to explore if researchers have reached similar conclusions and the answer is a clear YES!

A range of studies of smaller and medium size companies back this core statement. Here are some of the key findings based on 30.000+ specific companies:

• Research using data on 13,117 small and medium enterprises (SMEs) in 28 EU- countries (including the UK) confirmed that a higher level of circularity in processes equals a reduction in production costs.
• Research on 4.237 companies in the 28 EU (including the UK) shows that the implementation of practices related to the circular economy positively influences productivity. The further along the scale a) planning, b) implementation ongoing or c) fully implemented initiatives, the higher the productivity gains.
• Research on 11,336 small and medium size companies in the 28 EU countries (including the UK) shows that companies using renewable energies, and recycling or designing products that are easier to maintain, repair, or reuse, see an increase in their sales.
• A study of 350 Belgium SMEs found that those investing in ESG-measures increase their client base, expand their business, and raise the productivity of employees, leading to them becoming more creditworthy.
• A study of 500 UK companies with 10-500 employees finds that 54% of those who have started introducing sustainability practices have seen improvements to their reputation with customers and 36% have already seen greater sales revenues as a result.
• Research on 348 Italian manufacturing SMEs found that sustainability positively affects competitive advantage, driven by increased corporate reputation, higher customer satisfaction and bigger organizational commitment. This leads to a competitive advantage that positively contributes to financial performance.
• A survey amongst 601 UK business leaders from nine sectors shows that 80% of the manufacturing firms said they had already seen commercial benefits from implementing environmentally responsible programs, and 37% said they had achieved reduced operational costs. In both cases significantly higher numbers than on average across the nine sectors.

When we looked outside Europe and/or at larger companies the studies come to similar conclusions.

The bottom line is that sustainability and circular economy is profitable for your business!

Interestingly enough, some of the studied companies actually only work with fairly simple initiatives and thus do not fulfil the potential for sustainable business value-creating of that individual companies. But still, it delivers business value with embedded environmental impact.

Now I have backed my personal experience with solid empirical third-party findings. Hopefully this means you now believe that it is a good idea to take sustainability seriously and direct attention and resources to it. For most of you, this will take you to what I call the “how-moment”. How do I do it? How to set the direction? What do to? How to engage the board, the rest of the leadership team and the employees? How to, how to, how to…

There are many ways to address this question. The single most important thing is that you make sure that it is routed in business because it is the only way to make it a lasting initiative that keeps being a meaningful investment. Unfortunately, there are many sustainability models that are not rooted in business. They can deliver good results, but it requires more of you to ensure you translate and add the business component. That is one of the reasons I developed my own model, to be sure it had business in the fabric of all aspects.

Based on more than a decade of experience working with more than 100 businesses and being at the forefront of circular economy, I created the Mx5 method. It consists of the five principles you must master to turn sustainability into a competitive advantage. It is the essential steps and nothing more. I have also created a structured business consulting group program that guides and empowers business leaders across companies to build a more competitive company through sustainability. It is an online 5-month program with bi-weekly sessions, for those that would like the powerful mix of competence building, specific advice, tools and accountability.

In the program I take you through the five steps in the method:

Step One, Mindset: We’ll start by developing the insights and ideas you need to think strategically about sustainability and discover new opportunities with it.

Step Two, Mission: Then, I’ll help you develop a north star mission statement grounded in sustainability to inspire and guide your people and resources.

Step Three, Mapping: I’ll show you how to bring those big ideas down to earth and turn them into an effective business strategy.

Step Four, Movement: Engaging stakeholders and kickstarting implementation, I’ll show you how to galvanize people and operationalize change.

Step Five, Magnify: Finally, I’ll set you up to promote your accomplishments and position your company on the right side of sustainability.

If you would like to learn more about the five steps, I suggest you join one of my free introductory workshops. You can find one that suits your schedule here: https://calendly.com/jsteinhausen/an-introduction-to-making-sustainability-profitable

Look forward to seeing you there!