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The importance of ethical finance in the new business world

Ethical finance is a buzzword that is everywhere at the moment. But what does it really mean and why is it important in the ever evolving business landscape? Defined as finance which takes into account not only financial returns but also environmental, social and governance (ESG) factors, ethical finance is not just about doing good, but is pivotal for the security and longevity of your business in today’s competitive markets. 

At B2B APM we are committed to using finance as a force for good. We recognised that in an increasingly digital economy, business lending needs to keep pace. This is why we invest in socially and environmentally responsible initiatives by offering an innovative digital lending model that accelerates growth, empowers sales teams and saves you time and energy, so that you can focus on the things that matter. Find out why investing in your triple bottom line now will not only create a positive impact, but drive revenue, profits and the efficiency of your business operations.

Invest in our shared future

It is no secret that we are facing a mounting environmental crisis. For purpose driven businesses, green tech suppliers and service providers, the future of our planet is not just a peripheral concern, but is at the heart of your vision and mission. Ethical finance helps businesses align financial decisions with your values, and enable you to make a tangible impact on the world around us. ESG standards refer to those based on the environmental impact of your business (E), the social impact on communities (S) which includes working conditions, diversity and inclusion, human rights and health and safety, and the (G) stands for good governance; this means any issues concerning governance and shareholders such as board structure, executive pay and shareholder rights. Ethical finance sources take all of these into account, not just profitability.

In the Telco and SaaS channels, adhering to ESG standards is a strategic imperative. Not only does it increase your reputational value and build trust with clients, partners and end-users as a responsible business, something that is incredibly important as a business that deals with data privacy, but a commitment to ethical finance appeals to today’s best talent. With research revealing that 53% of the UK’s workforce say sustainability is an important factor when choosing a company to work for, and this figure rising to 67% for those aged 16-24, businesses need to consider their impact in order to retain the next generation of top employees. Committing to diversity, inclusion and investing in high working conditions is only going to help attract talent and increase employee satisfaction, reducing turnover. In fact, the most diverse companies outperform their less diverse peers by 36% in profitability.

At B2B APM, we believe in channelling resources into sustainable and socially responsible projects. Our innovative liquid subscription model is contributing towards the digitisation of business lending, improving the efficiency of operations, whilst supporting businesses like yours to achieve their ESG goals in a cost effective and flexible way.

High financial returns

It is a myth that businesses have to sacrifice profits for the sake of being more socially and environmentally responsible. In fact, ethical finance is about how people, planet and profit all work together to maximise your returns. Adhering to ESG standards can actually lead to cost savings, waste reduction and operational efficiency. Investors are increasingly prioritising ESG compliance, meaning that you can access capital more easily by embracing ethical finance. A review from the Arabesque and University of Oxford of the academic literature on sustainability and corporate performance found that 90% of 200 studies conclude that good ESG standards lower the cost of capital – showing that adopting sustainable practices helps to create financially stable and healthy companies.

Whilst investing in environmental initiatives, like improving the ethics of your supply chain or transitioning to a greener material, might initially seem to be the more expensive option, consumers are often willing to pay a premium for the more sustainable option. We also often see high returns for these costs such as increased growth, profitability and cash flow. Did you know that between 2006 and 2010, the top 100 sustainable global companies experienced significantly higher mean sales growth, return on assets, profit before taxation, and cash flows from operations in some sectors, compared to control companies?

Stay ahead of competitors

In today’s constantly changing market, service providers need to be innovative and creative in their approach to stay ahead of the competition. By pursuing ESG goals and ethical finance, you will be coming up with new solutions to environmental and social challenges to help position yourself as a responsible industry leader. Whether you are in SaaS, telco or another subscription based market, it is easy for your end client to change their mind about you at the click of a button. With an increasingly eco conscious consumer, being recognized as an ethical business can be the decisive factor in making deals and retaining customers – so don’t your lack be the reason that a competitor wins over you.

By proactively embracing ethical finance models, you can also future proof your business by preparing for any regulatory measures that are likely to come into place in the future – and avoid pitfalls or penalties that your competitors might face. Ethical finance creates long term resilience for your business, and as the industry continues to grow, make sure that you are keeping up with the rest by staying responsible in your compliance. Set yourself up for stability, foster trust with stakeholders and increase your adaptability to any market challenges.

Summary

Ethical finance is incredibly important in today’s business landscape. Profit is not just the defining factor for success anymore, and businesses need to embrace all ESG standards to see long term success.

At B2B APM we are committed to ethical finance. We pioneer digital technologies and innovative business lending whilst ensuring we have the biggest impact from both a social and environmental perspective in everything we do and every investment we make. We are committed to fostering equal opportunities and inclusivity for all by ensuring everyone has access to fair financial services. To find out more about our liquid subscription model to help businesses capitalise on recurring revenue streams, get in touch today. Let’s transform finance together.