If you’re considering selling your business, potential buyers are increasingly interested in companies that can prove they’re run with sustainability in mind.
This means that building a sustainable business is not only the right thing to do for the planet but is also likely to increase the asking price, should you come to a sale.
Two-thirds (66%) of private-equity investors rank value creation as one of the top-three drivers of responsible investing, according to PwC’s Global Private Equity Responsible Investment Survey 2021.1 In other words, the funds that often buy fast-growing small businesses view environmental, social and governance (ESG) factors as a significant value creator. It follows that by growing your business with that in mind, you can create more value.
Here are five reasons a sustainable business is likely to attract more attention when it comes to a sale.
They’re more profitable
Lower running costs and greater customer appeal (see below) mean that investing in sustainability is money well spent.
Integrating ESG considerations into business practices often leads to greater efficiencies through improved resource-management policies. These can reduce and eliminate waste, create more efficient supply chains and cultivate an innovative culture, according to a 2021 report by EY.2
The report found that across most industries, sustainable businesses outperformed their peers in terms of gross profit, EBITDA (earnings before interest, taxes, depreciation and amortisation) and net profit.
“If you can prove you live and breathe sustainability, if you’re true to that purpose, it will create and add value,” says Martin Brown, Chief Executive of Elephants Child. “At the SME level, it’s got to be very tangible, in that it’s got to drive sales up and costs down, and bring value into the business.”
Customers love it
With each passing year, more consumers are taking the ethical credentials of a company into account when making purchasing choices. If sustainability is part of your business model, then you have a good chance of increasing sales and being more attractive to a potential buyer.
If you’re considering selling your business, potential buyers are increasingly interested in companies that can prove they’re run with sustainability in mind.
This means that building a sustainable business is not only the right thing to do for the planet but is also likely to increase the asking price, should you come to a sale.
Two-thirds (66%) of private-equity investors rank value creation as one of the top-three drivers of responsible investing, according to PwC’s Global Private Equity Responsible Investment Survey 2021.1 In other words, the funds that often buy fast-growing small businesses view environmental, social and governance (ESG) factors as a significant value creator. It follows that by growing your business with that in mind, you can create more value.
Here are five reasons a sustainable business is likely to attract more attention when it comes to a sale.
They’re more profitable
Lower running costs and greater customer appeal (see below) mean that investing in sustainability is money well spent.
Integrating ESG considerations into business practices often leads to greater efficiencies through improved resource-management policies. These can reduce and eliminate waste, create more efficient supply chains and cultivate an innovative culture, according to a 2021 report by EY.2
The report found that across most industries, sustainable businesses outperformed their peers in terms of gross profit, EBITDA (earnings before interest, taxes, depreciation and amortisation) and net profit.
“If you can prove you live and breathe sustainability, if you’re true to that purpose, it will create and add value,” says Martin Brown, Chief Executive of Elephants Child. “At the SME level, it’s got to be very tangible, in that it’s got to drive sales up and costs down, and bring value into the business.”
Customers love it
With each passing year, more consumers are taking the ethical credentials of a company into account when making purchasing choices. If sustainability is part of your business model, then you have a good chance of increasing sales and being more attractive to a potential buyer.
If you’re considering selling your business, potential buyers are increasingly interested in companies that can prove they’re run with sustainability in mind.
This means that building a sustainable business is not only the right thing to do for the planet but is also likely to increase the asking price, should you come to a sale.
Two-thirds (66%) of private-equity investors rank value creation as one of the top-three drivers of responsible investing, according to PwC’s Global Private Equity Responsible Investment Survey 2021.1 In other words, the funds that often buy fast-growing small businesses view environmental, social and governance (ESG) factors as a significant value creator. It follows that by growing your business with that in mind, you can create more value.
Here are five reasons a sustainable business is likely to attract more attention when it comes to a sale.
They’re more profitable
Lower running costs and greater customer appeal (see below) mean that investing in sustainability is money well spent.
Integrating ESG considerations into business practices often leads to greater efficiencies through improved resource-management policies. These can reduce and eliminate waste, create more efficient supply chains and cultivate an innovative culture, according to a 2021 report by EY.2
The report found that across most industries, sustainable businesses outperformed their peers in terms of gross profit, EBITDA (earnings before interest, taxes, depreciation and amortisation) and net profit.
“If you can prove you live and breathe sustainability, if you’re true to that purpose, it will create and add value,” says Martin Brown, Chief Executive of Elephants Child. “At the SME level, it’s got to be very tangible, in that it’s got to drive sales up and costs down, and bring value into the business.”
Customers love it
With each passing year, more consumers are taking the ethical credentials of a company into account when making purchasing choices. If sustainability is part of your business model, then you have a good chance of increasing sales and being more attractive to a potential buyer.