Reasons why sustainability is a good business decision
The global economy is on a slow road to recovery after four tumultuous years and with this glimmer of light at the end of the tunnel comes renewed enthusiasm from business leaders and entrepreneurs to focus on medium to long term strategies, as opposed to short term ‘quick-fixes’ - this is where sustainability comes into play.
However, its time to stop thinking of sustainability simply as a way to ‘go green’ but rather as a core strategic principle that is going to help your business achieve greater profitability, success and recognition in 2014 any beyond.
FIVE REASONS WHY SUSTAINABILITY IS A GOOD BUSINESS DECISION
Corporate responsibility is a ‘pull factor’ for good employees
Gen Y employees are looking for more than bulging pay packets and bottom line profits. Instead they are motivated by job satisfaction, mentorship, and the ability to be creative. It’s proven that a business with a positive corporate culture - one with a social conscience – if far more appealing to young, talented and educated employees.
As Bridget Marsh writes for Creating What Matters, “The highly educated, mobile and tech-savvy age group that falls within the demographic band known as Generation Y wants a workplace that’s like them: urban, flexible, collaborative, environmentally sensitive and unconventional.”
Gen Y employees, unlike their Baby Boomer predecessors, aren’t looking for a nine to five office job that simply makes ends meet at the end of the month. Rather they are looking for a company that is an extension of themselves, a company whose beliefs align with their own, a corporation that values social responsibility and environmental awareness. By ignoring sustainability and corporate concern your business could be missing out on top talent, thus damaging your bottom line.
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Having a goal is good for corporate culture
While we’re on the topic of corporate culture, it’s worth pointing out that clearly defined goals are extremely good for developing a positive working environment. Just like setting personal milestones can help you achieve a sense of accomplishment and develop your skills, corporate goals will help your business flourish.
By setting clear expectations, objectives and targets for your employees – collectively and individually – you will see everyone working together towards a common outcome. This is good for business development, personal and professional growth, team building and job satisfaction.
Efficiency and waste management is always going to be good for business
Aside from corporate culture, sustainability should be considered not only because it’s the right thing to do but also because in practice it’s good for business. The core principles of sustainability include efficiency, waste reduction, energy saving, resource management and forward planning and any one of those ideologies, put into practice could result is substantial cost savings for your business.
Consumers, clients and customers are asking for it
‘Sustainability’ is a central buzzword in business at the moment, in fact you would be hard pushed to find a company mission statement that doesn’t wax lyrical about environmental and sustainable core values. With this in mind, being a sustainable supplier, operator or business partner can only be good for attracting clients and customers.
For example, a large fast food chain that emphasizes its own sustainable values won’t want to undo its hard work by working with a logistics firm that’s not interested in reducing its CO2 emissions.
Likewise, consumers - who just like Gen Y employees are becoming more alert to social and environmental concerns - are increasingly boycotting companies that are not seen to pull their weight when it comes to protecting the environment, its employees, or the livelihood of its suppliers. If your business turns a blind eye to its corporate responsibilities, its in danger of losing customers and burning bridges.
Get ahead of the game before regulation forces your hand
Another reason to focus on sustainability is regulatory requirement. Before long, sustainability won’t be an option, it will be obligatory and being ahead of the curve could save you a lot of money, not to mention downtime and disruption if new initiatives have to be implemented quickly and all at once. Don’t put your business at a competitive disadvantage or set yourself up for regulatory penalties; it’s always better to be one step ahead as opposed to playing catch up.
Six issues at the top of tax and finance leaders’ agenda
New Deloitte research reveals that tax leaders are under increasing pressure to add strategic value as companies accelerate business model transformation, from undergoing digital transformations to rethinking their supply chains or investing in green initiatives.
According to Phil Mills, Deloitte Global Tax & Legal Leader, to “truly deliver value to the business, the tax function needs to rethink its resourcing model and transform its technology infrastructure to create capacity and control costs”.
And the good news, according to Mills, is that tax and business leaders have more options at their disposal to achieve this.
Reflecting the insights of global tax and finance executives at global companies, Deloitte’s Tax Operations in Focus study reveals the six issues at the top of tax and finance leaders’ agenda.
Trend 1: Businesses seek more strategic counsel from tax
Companies are being pushed to develop new digital products and distribution channels and accelerate sustainable transformation and this is taking them into uncharted tax territory. Tax leaders say their teams must have the resources and skills to give deeper advisory support on digital business models (65%), supply chain restructuring (49%) and sustainability (48%) over the next two years. This means redrawing the boundaries of what tax professionals focus on, and accelerating adoption of advanced technologies and lower-cost resourcing models to meet compliance requirements and free up time.
According to Joanne Walker, Group Tax Director, BT Group PLC, "There’s still a heavy compliance load today, but the vision for the future would be that much of that falls away, and tax people become subject matter experts who help program the machine, ensure quality control, and redirect their time to advisory activity.”
Trend 2: Tipping point for resourcing models
Business partnering demands in the tax department are on the rise, but 93% of tax leaders say their department’s budget is remaining flat or falling. To ensure that the tax function can redefine itself as a strategic function at the pace that is required, leaders are choosing to move increasing amounts of compliance and reporting to a combination of shared service centers, finance departments, and outsourcing providers that have invested in best-in-class technology.
Trend 3: Digital tax administration is moving faster than expected
in addition to the rising focus of the corporate tax department partnering with their business counterparts, transformative changes to the way companies share tax information with revenue authorities is also creating an imperative to modernize operations at a faster pace. Nine in 10 (92%) respondents say that shifting revenue authority demands on digital tax administration will have a moderate or high impact on tax operations and resources over the next five years—and several heads of tax said the trend is moving faster than expected.
"It’s really stepped up in the last couple of years," says Anna Elphick, VP Tax, Unilever. "Tax authorities don't just want a faster turnaround for compliance but access into a company’s systems. It's not unreasonable to think that in a much shorter time than we expect, compliance will be about companies reviewing a return that's been drafted by the tax authorities."
Trend 4: Data simplification and lower-cost resourcing are top priorities
Tax leaders said that simplifying data management (53%) and moving to lower-cost resourcing models (51%) must be prioritized if tax is to become more proactive at delivering strategic insights to the business. Many tax teams are ensuring that they have a seat at the table as ERP systems are overhauled, which is paying dividends: 56% of those that have introduced NextGen ERP systems are now highly effective at supporting the business with scenario-modeling insights. Only 35% of those with moderate to low use of NextGen ERP systems said the same.
At Stryker, “we automated the source P&L process for transfer pricing which took a huge burden off of the divisions," says David Furgason, Vice President Tax. "Then we created a transfer price database to deposit and retrieve data so we have limited impact on the divisions. We are moving to a single ERP platform which will help us make take the next step with robotics.”
Trend 5: Skillsets are shifting
Embedding a new data infrastructure and redesigning processes are critical for the future tax vision. Tax leaders are aligned — data skills (45%) and technology process experience (43%) are ‘must have’ skills in a tax department of the future, but more traditional tax specialist knowledge also remains key (40%). The trick to success will be in tax leaders facilitating the way these professionals, with their different backgrounds, can work together collectively to unlock lasting value.
Take Infineon Technologies, which formed a VAT technology and governance group "that has the right knowledge about how to change the system to ensure it generates the right reports", according to Matthias Schubert, Global Head of Tax. "Involving them early was key as we took a greenfield approach, so we could think about what the optimal processes would look like and how more intelligent systems could make an impact
Trend 6: 2020 brought productivity improvements
Improved productivity (50%) and accelerating shifts to remote working (48%) were cited as the biggest operational benefits to emerge from COVID-19-driven disruption. But, as 78% of leaders now plan to embed either hybrid or fully remote models in the tax function long term, 34% say maintaining productivity benefits is a top concern. And, as leaders think about building their talent pipeline and strengthening advisory skill sets, 47% say they must prioritize new approaches to talent recognition and career development over the next two years, while 36% say new processes for involving tax in business strategy decisions must be established.