Ensuring environmental and ethical sustainability ranks highly among Malaysian firms

Businesses have complex ecosystems of global supply chains and are now looking to sustainability to unlock new financial benefits.

A new HSBC survey of more than 8,500 companies in 34 markets, ‘Navigator: Now, next and how for business’, has found a trend of businesses making sustainability changes in their supply chains to improve their bottom lines.

Almost a third (31%) of companies globally plan to make sustainability-related changes to their supply chains over the next three years. Of those making ethical or environmentally sustainable changes to their supply chains, cost efficiencies (84%) are the main motivations.

The trend comes as companies face increasing pressure from customers to be more sustainable and transparent about their sourcing. With around 80% of a company’s environmental impact found in its supply chain, the  ‘green’ credentials of strategic suppliers and partners are critical factors in a firm’s reputation and performance.

Transparency is also a key criteria for more than a quarter (26%) of companies when seeking new suppliers, according to the survey , as consumers increasingly want to know where the products they buy from and how people, animals and the environment have been treated during production.

Added to this, regulators and investors are putting more pressure on companies to disclose their sustainability practices, which explains why 85% of businesses want to achieve a sustainability standard recognized by their sector or market. In response, companies in emerging market countries are particularly keen to increase their ethical and environmental standards. More than one in five (21%) businesses based in emerging markets plans to make their improvements  over the next two years, compared with 15% in developed markets.

As one in five(20%) companies say they have taken greater control of their supply chains over the last two years, this presents a timely opportunity for businesses to assess their networks and take action to become more sustainable, which can help them remain competitive in an increasingly in an increasingly demanding trading environment. Some are already getting results, with 17% claiming to have reduced their impact on the environment the last two years.

The transition to a more sustainable future has many benefits to businesses – and banks have a role to play too. HSBC’s network, financial expertise , tools and connections support businesses of all sizes to take the steps needed to become more sustainable and remain competitive in today’s world.

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