Building a sustainable aged-care sector
Australia is home to 902 organisations providing residential aged care, with over 201,000 places allocated in 2017. The aged-care sector will continue to grow as our population ages and it is estimated that by 2051, people aged 65 years and over will represent one-quarter of the Australian population (6.8 million people). Aged-care organisations need to cater to this growing demographic by building more facilities to ensure adequate and appropriate residential care.
Equally important is to build and operate facilities that are designed to have minimal impact on the environment. This will involve steps to reduce energy and water consumption, reduce waste generation and increase renewable energy as the main source of powering aged-care facilities.
To incorporate and embed sustainability in business strategies, aged-care organisations need to take a long-term view towards managing their environmental and social risks as well as their impacts on these entities. Strategic integration of sustainability measures allows organisations to better anticipate and understand long-term trends and the effect of resource use, and to address stakeholder expectations.
The foundation supporting the business case for sustainability in aged care can be categorised into the following areas:
1. Reducing costs and improving efficiencies
Case studies are multiplying, providing a bank of companies whose sustainability initiatives are helping their bottom line by driving operational efficiencies that root out excess energy use and other forms of waste.
Aged-care companies are cognisant of the savings that can be realised by operating sustainably. Reducing reliance on fossil fuels and saving energy are not only good for the environment — the savings drop straight to the bottom line. Similarly, anything an organisation can do to eliminate waste and use materials more efficiently can create cost savings both in terms of purchased materials as well as avoided costs affiliated with waste disposal. Regardless of the size or type of company, material and energy savings are typically easy to quantify and monetise. These are the sustainability no-brainers.
2. Mitigating risks
Company executives are the chief stewards of their companies and are accountable to regulatory agencies and professional bodies for ensuring that financial statements are robust and accurate.
In recent years, the number of risk factors being tracked by companies has multiplied significantly and include: the stability of global and regional financial systems; expanded financial regulatory and reporting requirements; changing dynamics of the international political system that affect existing and potential investments; natural resource scarcities that impede food, electricity and other production systems; climate change and other disruptions to existing business operations or public and private infrastructure. These growing risk factors are no longer abstract or emerging. Rather, they have already disrupted individual companies’ access to raw materials or resources and necessitated investments in more resilient infrastructure and supply chains to ensure business continuity. As a result, executives from a diverse range of industries are playing, or need to play, an increasingly prominent role in evaluating sustainability-related risks, as their impact on company investment plans and operations have become more apparent.
3. Enhancing brands
Businesses today face challenges capturing innovation and an uphill battle with intangible asset valuation and management. These non-tangible assets, such as brand and reputation, are over 80% of the average business’s value.
Every company — whether B2B or B2C — has a brand, and it’s important to make a direct connection between sustainability initiatives and strengthening the brand. Enhanced brand reputation strengthens customer loyalty and can drive preferential purchasing behaviours.
Today, more than 90% of CEOs say that sustainability is fundamental for success. Evidence of the modern CEO’s state of mind is seen in how much attention companies are putting toward their sustainability strategies. Examples of sustainability initiatives include:
- developing sustainable products and services
- creating positions like chief sustainability officer
- publishing sustainability reports.
The trend seems to be deeply rooted: 88% of business school students think environmental and social issues are priorities in business. Additionally, more first-time entrepreneurs are building their companies around environmental protection. This has led to the rise of promising start-ups that focus on durable, eco-friendly and recycled products.
4. Recruiting and retaining talent
Generation Y comprises up to a quarter to a third of today’s workforce. With upwards of 40% of current employees planning to retire within 10 years, the need to align a company’s values with those of its employees is becoming a critical business imperative.
Numerous case studies show the positive impact of employee engagement. Simply put, people want to work for companies that they can be proud of. Some experts claim this is especially true for younger generations. Employee satisfaction leads to more productivity and less turnover, and allows companies to attract the best talent. While the reputational aspects are harder to measure and track in financial terms, metrics such as turnover or results from employee satisfaction surveys can help track the internal effects of a comprehensive sustainability strategy.
I think we need to define a new kind of wisdom that is emotional, social, as well as ecological. I think that we’ve been talking about emotional and social intelligence for a long time, but now we need to embed ecological intelligence in everyone.
An investment in sustainability — people, planet and prosperity — is not only a form of corporate philanthropy but is core to how a company can succeed and prosper as a business.
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