Slowely but surely, the face of Belgian business is changing. The number of companies that combine profit and purpose is increasing compared to the number of pure for-profit businesses (ref). Although a company’s desire to do good for people and planet plays an important role, this paradigm shift cannot be attributed solely to the idealistic motives of a business’ board of directors (ref). So what else is facilitating and accelerating this new way of doing business in Belgium?
Customers & B2B Clients
It comes as no surprise that a company’s customers have great influence on its way of doing business. This is no different for Belgium. A recent Flemish study shows that approximately 7 out of 10 people believe that our country doesn’t focus on sustainability enough, regardless of their age, income, education or political affiliation. They also expect companies to take responsibility by making sustainability central to their business, with 39% of respondents considering it mainly the task of companies to solve environmental problems. In addition, consumers also try to do their part, with almost half of the resondents always opting for more sustainable products and 91% occasionally (ref).
Since Belgian customers care about the sustainability of a company’s products, the companies themselves care about the sustainability of their suppliers. Belgian companies even identify their suppliers as the number one external barrier to creating a more sustainable business (ref). Consequently, a lot of Belgian companies are demanding their supply chains to be responsible by promoting the same sustainability principles as them.
Employees – Sustainability Attracts Talent!
Belgian employees also value sustainability and clearly indicate that they would rather work for a company that incorporates a sense of purpose. The same Flemish study shows that almost a third of employees in our country consider sustainability so important that they would change jobs for it (ref). This shows that Belgians want their work to have a purpose and impact. By making their business more sustainable, companies can thus attract more talent. This encourages companies to commit to sustainability because the better skilled a company’s employees, the greater the quality of its business activities (ref).
One way in which businesses can signal that they actually “walk the talk”, is through B Corp certification, because it shows that the certified company has a clear sense of purpose and is committed to create a healthy working environment (ref).
Being recognised as a “sustainable company” is not only appreciated by a company’s customers and employees, but also by its investors (ref).
Not only in Belgium, but around the world, there’s a growing fear of stranded assets among investors. Stranded assets are “assets that have suffered from unanticipated or premature write-downs, devaluations or conversion to liabilities”. They can be caused by a variety of environmental and social risks that are often mispriced due to poor judgement of the gravity of these risks. In turn, this has resulted in a significant over-exposure to environmentally unsustainable assets throughout our financial and economic systems (ref).
As a result, investors are increasingly interested in a company's ESG-profile because ESG-ratings highlight risks that are not apparent from ordinary financial analyses, which often look at the short term and fail to consider many long-term risks to a company's financial health (ref).
Last but not least, this transition would of course not be possible without support on the political level. In the past few years, more legislation has been focused on creating a positive environment for building a more sustainable society. A great example of this is our country’s commitment to creating a truly circular economy. The federal government and the three autonomous regions are all aligned in this effort and promote, amongst others, better waste management, a stronger network of repair cafés and the leasing of material goods instead of buying them. In addition, several “green deals” between private, public and government partners have also been launched in our country in support of sustainable development projects (ref).
Doing good business is everyone’s business!
Various players are pushing for more sustainability within the Belgian business world, resulting in the paradigm shift we see today. Caring about the wellbeing of our world and pushing for positive change is not just reserved for certain layers of society, it’s everyone’s business!