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Sustainable development: doing good is good for the economy, too

Companies and communities collaborating for sustainable development and generating social, but also economic, value. We are not talking about a utopian society, but of a tangible reality that not only benefits the community, but also brings a financial advantage to those companies capable of adopting a responsible, long-term vision.

05/04/2020 - 10:00 AM

From renewable energy to work environments fostering diversity, to business decisions based on a far-sighted strategy as opposed to short-term tactics: the growing importance of ESG – environmental, social and governance – factors is also proven by the numbers. Investments aligned with these values have now reached 30 trillion dollars worldwide, an increase of 68% compared to 2014 and ten times higher than the 2004 total (*).

Such numbers clearly show how sustainability is, unquestionably, an investment in the future, bringing not only environmental and social advantages to the community, but also financial advantages to companies. This is not a mere zero-sum game, in which a participant's loss is another participant's gain, but a strategy generating benefits all round.

A 2018 study, undertaken by the Bank of America Merrill Lynch, found that shares of companies best performing in terms of ESG yield higher returns, are more likely to be perceived as of high quality, and are least at risk of value loss. This should not come as a surprise, considering that achievable goals include reducing expenditure, increasing employees' satisfaction and productivity, optimising costs and accessing new business opportunities. 

Environmental values 

The trust of consumers and institutions is a critical business factor. And now more than ever trust is gained through environmental sustainability. According to a 2020 survey conducted by the National Retail Association in collaboration with IBM, when choosing a product or a service 78% of consumers value (highly or moderately) green practices and environmentally friendly companies.

In the world of telecommunications, opting for a green strategy means one thing above all: focusing on renewable energy. Therefore, with a view both to implementing sustainable and responsible behaviours and to meeting consumers' priorities, TIM (currently already rated above sector average in the CDP evaluation) will become carbon neutral by 2030. This will be achieved by reducing the greenhouse gas emissions related to energy consumption by 30% by 2022 and by 70% by 2025, while increasing the use of renewables by 5 percentage points every year.

A strategy that not only will have a major impact on the environment but that – as the McKinsey report explains – can also improve financial performance, thanks to the reduction in cost and waste it entails.

Social and governance values 

Therefore, the long-term health of the company coincides with the health of society as a whole. This is also true for actions to protect and develop local communities. It is this awareness that led us, for instance, to introduce various TIM initiatives aimed at tackling the Coronavirus emergency, through donations, tools for remote education, operations centres to support the Italian Civil Protection Agency and much more. In addition, it informed the launch of Operazione Risorgimento Digitale – a digital school that, physically at first and later online, has united the whole of Italy, to teach people skills that are becoming increasingly fundamental.

Contributing to society's welfare also helps attract top talent and ensure a positive and stimulating work environment. All this translates into increased productivity and, therefore, added value for the company. But how do we get there? TIM's journey also includes the gender pay gap manifesto, which is proof of our commitment to equal opportunities and against discrimination, both of which are key to the improvement of business performance.

And it is with this in mind that we have committed to a broad programme to upskill and retrain our people. Similarly, with the aim of providing a better work-life balance for everyone, we introduced smart working years ago. Indeed, thanks to smart working as many as 32,000 of our people were able to immediately and easily set themselves up for home working as soon as the Coronavirus emergency required it.

A company investing in the environment, the community and its employees is a company that is committed to a better future for society and as such for itself, fuelling a truly virtuous circle. A company that, in a nutshell, creates value through sustainability. 

(*) Source: McKinsey Quarterly