Ep. 69 – Profits with Purpose

Intro

[00:00:49]

The theme for the season is “sustainable business”, looking at it from the perspective of the triple bottom line, which is people, planet and profit, and how this connects to creating cadence as well as our wellbeing and productivity.

Today’s episode looks at the business case for building a sustainable business and why doing good is good for business.

So far, we’ve looked at how cadence and intentional productivity connect with building a sustainable business; why putting the people in your business first is good for the planet; and why all businesses should be considering the environment as part of their processes, no matter the shape or size of your business.

As I’ve mentioned before, these episodes can be listened to as standalone resources, but there’s lots to learn in each episode too. So if you haven’t yet listened to the first three, check them out.

But before we get to today’s episode, a few quick news updates.

The nature of the work I do requires that I’m always learning and staying up to date with new research and developments across my fields of interest, because this ensures that I’m in the best position to help my clients.

To that end, I’m still working through my B Corp training course. And wow, there is so much to learn. It helps that curiosity and learning are key values for me, so I find the process exciting. I’m also undertaking some other supplemental coaching training over the next few months too, to boost my skills. So I’ll update you on progress on those once they’re done.

Lastly, I’m about to announce new coaching and workshop options that are launching in January, 2025.

The focus is on helping leaders and teams to transform how they work by building more sustainable leadership and self-leadership skills.

Topics include building resilience, supporting digital wellbeing, enhancing productivity, and aligning your business goals with positive, sustainable impacts that will help you and your business to thrive. Not just now, but in the long run too.

For companies, there will be new workshop topics that you can select from to support your team. And you’ll be able to make up a bundle with the topics most relevant to you.

And for individual and group coaching, spaces will be limited and there will be an application process, which will be open until the end of November. So keep an eye out for more info on the website, which is creatingcadence.co, as well as in the newsletter, and I’ll also share more in the next episode of the podcast and there will be announcements on LinkedIn and Instagram, too, when those go live. So now without further ado, let’s dive into this week’s episode about the profit element of the triple bottom line and the business case for sustainability. As always I’ll share links and the transcription notes for the examples that I use during this episode.

Profits with Purpose

Why doing good is good for business

[00:03:22]

First up let’s debunk the myth that sustainability and profitability don’t mix.

The traditional business mindset is that profitability and sustainability are at odds. That to achieve one, we have to forgo the other.

But embracing sustainable practices, isn’t just a feel good move. It’s also a smart, profitable business strategy.

The persistent myth is that going “green” or adopting sustainable practices eats into your profits. But research and real-world examples show that the opposite can be true.

Companies that prioritize sustainability tend to outperform their competitors financially in the long run.

By reducing waste, cutting energy use, and improving efficiencies, sustainable practices can help businesses to save money while building brand loyalty with eco-conscious consumers.

Sustainability is all about playing the long game, as I’ve said. So you’re not looking at this quarter’s profits or this year’s revenue. You’re setting your business up for long-term success. So that you can be around to enjoy those profits and leave a legacy for the next generation, too.

Consumers today want to support companies that align with their values and businesses that ignore sustainability are becoming less relevant.

Sustainability can also open up new markets and revenue streams. For example, shifting towards more sustainable products or services can appeal to a growing customer base that actively seeks out businesses that engage in ethical practices and make environmentally-friendly products.

Think of it, like investing in your fitness by going to the gym. Sure. You could skip the gym and save time, but eventually those choices catch up with you. Businesses that skip out on sustainability might save a few bucks in the short term, but they’ll pay a price down the line, when regulations tighten or customers walk away.

Being more purpose driven and ethical in your approach requires a mindset shift around what profit means to you, and your shareholders, if you have them. But profitability is still an essential part of having a sustainable business, because without the revenue you can’t support your people, make your products, help your customers, or save the planet.

I’m going to specifically use B Corp’s as an example here. Because I’m learning about them at the moment.

Companies that are eligible for B Corp certification need to demonstrate that they can generate the majority of their revenue from trading, that they are able to compete in a competitive marketplace, that they are not a charity and not a public body or not majority owned by the state.

Formally committing to a triple bottom line approach to business comes with additional responsibilities. In this case, the idea of profit isn’t just to leverage the success of the business for the benefit of its shareholders.

The aim is to also have a material positive impact on society and the environment. For example, if you become a B Corp business, there’s a legal requirement and accountability parameters. Your governing documents need to state the responsibilities that you accept in considering a range of stakeholder interests, as part of your decision-making and the running of your business. And there is annual reporting required to backup these decisions, actions, and outcomes.

The stakeholders that you need to take into account include not just your shareholders, but also employees, suppliers, society, and the environment.

So when it comes to profit, in the case of a B-Corp, shareholder value does not take precedence. It is just one factor amongst many.

And when your product or service is sought after by cause-focused consumers who are careful about where they spend their money, then buying from you because you tick their boxes, is a profit opportunity for you, too.

I’ll quote some revenue stats when we get to the real-world example section so that you get an idea of how profitable it could be. But for now it’s important to understand this approach requires you to see profit in a completely different way. It’s not just about making money. It’s about making money in a way that also supports people and the planet.

So it means striving for a win-win-win situation.

Cadence + Profitability

[00:07:21]

Now let’s look at the role of cadence in profitability.

Creating cadence in your business through things like developing intentionally productive practices can improve profitability. The key is finding a rhythm that allows for efficiency and mindful, ethical success without compromising on health, wellness, and performance.

Let’s consider how intentional productivity in particular can improve efficiency. Intentional productivity isn’t about squeezing more out of your team. It’s about working smarter, not harder, so that their wellbeing remains intact, because that’s more sustainable over the long run. By eliminating inefficiencies, improving work styles and work flows and business processes, and focusing on high impact work, businesses can get more done with less, without sacrificing the health of their team.

Well-paced work rhythm helps employees stay focused and energized, reducing chances of burnout and staff turnover.

When your team is happy and engaged, they’re more productive. And that productivity directly translates into better outputs and outcomes, which in turn means more opportunities for profit.

So creating cadence helps you to develop more sustainable work practices, which also save you and potentially make you money.

Regularly reviewing your processes, which is part of creating cadence, too, can help you spot areas where you’re wasting resources, whether it’s time, money, or materials, and it helps you identify and fix them before they become bigger problems.

Imagine you’re baking cookies. Baking is not like other cooking where you can improvise on your measurements, it’s actually quite an exact science. And if you’re not organized, knowing which utensils to use and which ingredients you need, and when to add them, you may end up missing something crucial or rushing through the process and ending up with burnt and even dodgy tasting cookies, which leads to a wasted effort.

Or you can follow the recipe and work at a steady rhythm, mixing, baking, and letting them cool. To get the perfect cookies every time.

In business, employing a better rhythm, or cadence, in your work systems, ensures that you’re baking the perfect batch while minimizing waste and effort.

The Triple Bottom Line in Action

[00:09:41]

Now let’s consider the triple bottom line in action.

If you want to build a sustainable, purpose-driven business, then profit cannot be a standalone driver. This is about how balancing people, planet and profit leads to a resilient, long-lasting business.

It’s about creating a business that isn’t just financially successful, but it’s also ethically sound.

Balancing these three pillars creates a business that’s not just profitable, but also sustainable and ethical.

When companies prioritize the planet and people, which includes employees, customers, and the community you work in, alongside profit, then they build more resilience. This is resilience in your business, in your team, and in your community. This means that each of these elements is better able to weather economic downturns or unexpected challenges.

Ethical leadership plays a huge role here.

Leaders who prioritize sustainability. Aren’t just thinking about profits. They’re considering the longterm wellbeing of their company, employees, community, and planet. Ethical leaders create companies where employees feel valued customers trust the brand, and profits flow naturally from sustainable practices.

This approach leads to stronger loyalty, less churn, and a more stable bottom line.

Today’s consumers and employees are looking for companies they believe in. They want to work for and buy from businesses that align with their values, and ethical leadership can help make this happen.

Millennials and Gen Z make up the majority of the workforce today and their values are firmly rooted in things like wellbeing and work-life balance and being cause-focused, supporting social activism, social justice, and environmental initiatives.

Think of ethical leadership like being the captain of a ship. You don’t just sail towards the nearest port for quick gains. You chart a course that ensures the ship, its crew, the passengers, and the product you’re carrying all arrive safely. So balancing people, planet and the profit helps you to keep your ship steady in the long run.

Now let’s look at some real world examples.

Examples of Sustainable Profitable Businesses

[00:11:44]

Here’s some examples of companies profiting from focusing on sustainability as part of their business model. And I’ll share some reference links related to these companies in the transcription show notes for this episode.

– Cotopaxi

Cotopaxi is an outdoor clothing and equipment company founded in 2013, started with a mission to make a positive impact by reducing global poverty through innovative outdoor products. As a benefit corporation or B Corp. They’re committed to inspiring social and environmental change, weaving this purpose into everything that they do.

Cotopaxi encourages adventure and giving back. Employees spend 10% of their work hours outdoors, or doing community service, and they volunteer their skills locally to make a difference. Through these initiatives, Cotopaxi keeps their focus on creating meaningful change and inspiring others to do good. They also have really cool gear.

Now Davis Smith, who was the original founder of Cotopaxi, believes that purpose and profit are inextricably linked and combining the two are the future of business and capitalism. Like many startups, the company wasn’t profitable in its first five years. Like I said, building a sustainable business can be a long game. But over the last three years, Cotopaxi has been more than profitable, with estimations that the brand pulled in $160 million in revenue in 2023, up from $55 million in 2021.

Not only that, but whenever they open a new job opportunity up at their company, they get thousands of applicants for that position. So, if you’re struggling to find the right talent at the moment, it may be because your purpose doesn’t align with theirs.

As Davis Smith said in an interview with Fortune, “It didn’t happen overnight, but we’re showing that when you do what’s right, and it’s something that’s deeply and authentically woven into the brand and the culture. People want to be a part of that. People want to work for you, support you, wear your products. The more you can figure out how to impact the world for the better, the more profit you’re going to be able to create, which allows you to do more good. It becomes this beautiful cycle.” End quote.

Resources:

• Cotopaxi Website
• Fortune interview with Davis Smith, ex Founder Cotopaxi
• Axios Cotopaxi article

– Too Good To Go

The next company I want to focus on is called Too Good To Go, which originated from Denmark, but now operates around the world.

Too Good To Go is an app-based company that connects customers with surplus food from local restaurants and shops to reduce food waste and encourage sustainable consumption. By reducing food waste, which is a significant contributor to climate change, Too Good To Go is directly tackling environmental sustainability.

The company has grown rapidly across Europe now operating in 17 countries, and recently opened in the US as well, and it has secured millions of users. They profit by charging a small fee for each transaction, while saving food businesses money on waste disposal. They also generate additional revenue streams from partnerships and collaborations. Too Good To Go illustrates how innovative solutions to environmental problems, such as food waste, can become highly scalable and profitable in modern markets.

Resources:

• Too Good To Go website
• Too Good To Go Profile – Zero Food Waste Europe
• Their Business Model Explained – Untaylored
• Too Good To Good US Expansion – Forbes

– The Co-Operative Group

Another example to consider is the Co-Operative Group (or Co-Op), which originates in the UK.

The Co-Op is one of the largest consumer cooperatives in the UK operating across multiple sectors, including retail, insurance, and funeral care. They have long been a pioneer in ethical and sustainable business practices with a focus on climate and food security. They’re dedicated to sourcing fair trade products, reducing their carbon footprint, and ensuring ethical sourcing of goods. The Co-Op is also committed to reducing plastic and food waste with significant investments in renewable energy.

Their ethical stance and transparent business model have built a strong loyal customer base, which has contributed to their long-term profitability. Their retail to funerals business reported pre-tax profits of 58 million for the first six months of 2024.

In recent years, their commitment to social and environmental causes has been a key differentiator in the crowded retail supermarket space.

The Co-Op proves that a large complex organisation can still be driven by sustainability, while remaining competitive and profitable in multiple industries.

Resources:

• Co-op Sustainability Policy
• Co-op Climate Policy
• Co-op Returns to Profit article – The Independent

– Ikea

I did mention them also in the last episode, but they’re such a globally recognizable brand that I felt it was worth including them here again.

Ikea, the Swedish furniture giant has been pushing the boundaries of sustainability in a traditionally resource, heavy industry. They’re committed to using only renewable and recyclable packaging and materials by 2030. . And their products are increasingly designed for circularity, which involves reuse, recycling, and regeneration. They’ve also invested heavily in renewable energy and aim to become climate positive by 2030.

Their sustainable initiatives include a focus on energy, food, and climate, and they have an advisory forum of youth, activists and professionals. They’ve increasingly attracted environmentally conscious consumers, further solidifying their leadership in the affordable home furnishings market.

Despite their additional investment in sustainability, Ikea’s revenue continues to grow. In the financial year 2023, their global gross profit amounted to roughly 14.7 billion euros.

Ikea shows that even a large global company can successfully make sustainability part of its business model, driving profits while cutting environmental impact.

Resources:

• Ikea Sustainability Strategy
• Ikea’s Gross Profit 2023 – Statista

Think of these companies as businesses with superpowers, they’ve figured out how to grow profits and make a positive impact at the same time.

It’s kind of like having your chocolate cake and eating it too, but it’s made with sustainably sourced chocolate.

Reflection + Recap

[00:17:26]

But what if you’re a tiny company, or work on your own? You may not have billions to invest in new sustainability initiatives.

Well, I’ve said this before. It doesn’t take money to start. It starts with a culture shift. A mindset shift.

It starts by recognising you need to make change.

It starts by taking small, doable, incremental steps to help you get to the point where you can then spend more and do more.

The point is that we all need to start, because the planet can’t wait.

So to sum up some key points from this episode, sustainability and profitability are not mutually exclusive. By creating cadence and embedding sustainable practices into your business, you can drive long-term financial success while also supporting people and the planet.

So I encourage you to start small by identifying one area in your business where you can be more sustainable.

It doesn’t have to be a massive overhaul. It can be as simple as reducing waste and changing your packaging. Or rethinking your energy usage. Or revising your workflow so that your team can work a four-day work week and stay happy and healthy whilst performing better.

Remember, sustainability isn’t just about saving the planet. It’s about making your business stronger and more profitable in the long run. In our next episode, we’ll look at the future of work and how technology can help us to build even more resilient, sustainable businesses, also considering the environmental implications of tools that are energy intensive, such as AI.

In the meantime, keep moving forwards with courage, curiosity, and cadence.