Sustainability – hand in hand with cost saving
Economic difficulties have forced businesses to make efficiencies to combat rising inflation and increased energy costs, our latest research confirms. However, this doesn’t have to be at the expense of sustainability.
Businesses face long-term challenges around improving sustainability. There have been fears that this focus risks being knocked aside by the urgent need to manage the impact of the economic crisis. However, Intrum’s latest annual European Payment Report paints a more positive picture. The survey of more than 10,000 companies across 29 countries finds determination among many businesses to keep working on environmental, social and governance initiatives.
While four in ten (38%) said it would be understandable if SMEs became less focused on sustainability for the time being, given the operating pressures they are under, six in ten SMEs (61%) said they have in fact accelerated their sustainability efforts over the last year. This figure was even higher than for large companies – 51% of which said the same.
Despite the pressures that businesses face in the challenging macro environment, businesses have not lost their commitment to environmental, social, and governance (ESG) initiatives. Six in 10 executives say they have even stepped up their efforts to become more sustainable over the past 12 months.Intrum Chief Executive and President Andrés Rubio
Expectations of sustainability
In part, this commitment reflects business leaders’ commitment to sustainability. But it is also the case that key stakeholders – investors, employees, regulators and, perhaps above all, customers – are demanding progress on this front. In 2022, 54% of Europeans said they won’t buy from companies that they know are responsible for harming the environment (source: Intrum ECPR 2022).
There is also a growing body of evidence that more sustainable companies perform more strongly. This trend has been seen in reduced energy use to combat the rise in prices following Russia’s invasion of Ukraine. According to the European Payment Report, 54% of businesses have been reducing their energy usage to keep bills lower but intend to keep usage low in future for environmental reasons. These figures are even higher in places such as the United Kingdom (64%), Poland (63%), Norway (61%) and Spain (61%).
"We have been reducing our energy usage recently to manage the cost of rising energy prices but will keep usage low in the future to help limit our impact on the environment." (agree)
Source: European Payment Report 2023, Q18
“This is a perfect example of cost and sustainability efforts reinforcing each other. We have seen similar effects in consumer efforts to reuse and recycle rather than buying new.Vanessa Söderberg, Global Sustainability Director at Intrum
Sofia L., Business Analyst at telecoms giant Vodafone Portugal, agrees that the company’s reduction in paper invoicing is good for both costs and the environment. “We have moved customers from paper invoices to digital for environmental reasons, but there are also cost benefits to that switch,” she says.
Not all businesses are on board
While there are excellent examples of positive change, the survey’s findings show around half of businesses are prioritising sustainability while half don’t see the same urgency. Less than half (49%) said they will lose customers if they don’t take their environmental responsibilities seriously, and only 51% said they have become more aware of climate risk and aware of the need to make their business resilient in the last 12 months.
“Regulatory requirements and customer expectations are growing,” says Vanessa Söderberg, Global Sustainability Director at Intrum. “Those who fail to keep pace with the agenda are likely to be left behind in the coming years. It is understandable that businesses are prioritising cost savings and efficiency, but there is a balance to strike and the two areas do not have to be mutually exclusive. In the short-term, businesses can make a difference by focusing on sustainability improvements that drive efficiency.”
Prompt payments could also make a huge difference to sustainability efforts, freeing companies to invest in areas to cut their carbon footprint and enable the transition to a low carbon economy. Six in 10 (61%) of businesses said faster payment would enable them to increase investment in these efforts.
Insights from the European Payment Report 2023
These insights are taken from our latest payment study. You can access the full European Payment Report 2023, a white paper breaking down the countries' results, plus a recording of our webinar below.
