Industry Insights

Revisiting the Importance of Sustainability

December 2015
Author:  Chris Linck

Chris Linck

Partner

Audit

Manufacturing & Distribution

312 Walnut Street, Suite 3000
P.O. Box 5367
Cincinnati, OH 45201-5367 (45202)

Cincinnati
513.621.8300

In a BKD Thoughtware® article published in June 2014, we shared insights from the Smart Business Series Seminar presented by BKD’s Cincinnati professionals. Since that time, environmental, social and governance issues continue to receive frequent attention in the business world.

Who hasn’t read about the impact of business on the environment on a weekly basis? How many companies have already implemented or are considering a wellness program for their workforce? And how many large companies have had to scramble to control damage to their reputation when an unfortunate event threatens what they have worked so hard to establish?

A recent poll conducted by the Cincinnati Business Courier asked readers to weigh in on what they’re seeing when it comes to sustainability. Here are some of the results:

Question:  How often does environmental sustainability impact decisions in your business?
Frequently – 40%
Sometimes – 28%
Rarely – 32%

Question:  Do customers/vendors ask about your company’s sustainability program?
Yes – 49%
No – 46%
Don’t know – 5%

Question:  How often do your employees ask about the sustainability program of your company?
Frequently – 27%
Sometimes – 24%
Rarely – 27%

Our clients continue to tell us larger customers are inquiring about their sustainability programs; in some cases, their contract with the customer includes a clause requiring at least an understanding of the customer’s sustainability program.

While being required to adopt a program could lead a middle-market company to change its practices, a strong business case remains for such moves. For owners considering a business sale in the next decade, instituting some of the principles embodied in many sustainability programs could lead to an enhanced exit price. For example, if a buyer is considering two potential targets and one company has the same bottom line but a lean process that reduces wasted materials and environmental impact, the decision could be easy for the buyer. Even if the owners decide not to sell a business after implementing a sustainability program, they likely could be holding a more valuable investment.

To learn more, contact your BKD advisor.

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