Why developing an ethical sustainability strategy is crucial for a Singapore-based business

A profound and ongoing shift is reshaping the global business landscape. Consumers today are no longer solely focused on price and product. Instead, they are demanding greater accountability and expect a demonstrable commitment to ethical practices. 

In a study conducted by the Carousell Media Group and the IAB SEA+India, it was found that 87% of Singaporeans¹ are willing to pay a premium for ethically sourced or produced goods. Many Singaporean businesses are aware of such evolving customer sentiments. After all, decision-makers are consumers themselves, experiencing these changing expectations firsthand. However, the challenge lies in translating awareness into action.

Hence, this blog post will dive into the benefits of ethical practices, providing a roadmap for Singaporean companies to adopt a sustainable business strategy. We'll also explore key areas of ethical conduct, showcase real-world examples, and offer practical guidance for businesses seeking to align their operations with the values of today's conscious consumers.

The benefits of ethical and sustainable business practices

1. Enhanced brand reputation

Ethical practices are the bedrock of a strong brand reputation. By integrating ethical practices and environmental sustainability initiatives into their operational strategy, businesses build trust and credibility with customers, employees, and investors. A positive brand reputation can command premium pricing, attract top-tier talent, and foster long-term customer and employee loyalty.

2. Attracting and retaining talent

In a competitive job market, ethical companies have a distinct advantage in attracting and retaining the cream of the crop. Employees, just like consumers, are increasingly seeking purpose-driven organizations that align with their values.

3. Improved financial performance

Environmental, Social, and Governance (ESG) factors are increasingly used to assess a company's sustainability and ethical impact. A comprehensive meta-analysis conducted jointly by NYU Stern Center for Sustainable Business and Rockefeller Asset Management found a positive relationship between ESG and corporate financial performance. 

Specifically, 58% of the studies focused on operational metrics such as Return on Equity (ROE), Return on Assets (ROA), or stock price² showed that strong ESG performance was correlated with better financial outcomes.

4. Risk mitigation

Prioritizing sustainability and ethical practices plays a crucial role in mitigating business risks. By adhering to legal and regulatory requirements, companies can avoid costly fines and penalties. 

Ethical conduct also helps to minimize the risk of reputational damage from unethical behavior. By promoting ethical procurement and fair labor practices, companies can also mitigate supply chain disruptions and ensure business continuity.

5. Customer satisfaction and loyalty

Fair treatment of customers and emphasis on corporate social responsibility both contribute to increased customer satisfaction and loyalty. Businesses that actively demonstrate a commitment to environmental stewardship – for example, by developing a sustainability strategy that minimizes environmental impact – can further strengthen these relationships.

Key areas of ethical business conduct

Now that we have explored the benefits of ethical and sustainable business practices, let's delve into the key areas businesses need to focus on to ensure ethical conduct throughout their operations.

Fair labor practices

Companies should prioritize fair labor practices, ensuring that employees are paid fair wages and provided with safe and healthy working conditions. Fair treatment of employees fosters a positive and productive work environment, leading to increased employee morale and engagement.

Environmental sustainability

Companies have a responsibility to minimize their environmental impact by integrating sustainability into their practices. This includes carbon reduction initiatives, using eco-friendly materials, promoting recycling and waste reduction, and investing in renewable energy sources.

DHL Express, for instance, is deeply committed to carbon emission reduction through its GoGreen Plus service. This sustainable logistics solution aims to reduce scope 3 carbon emissions, which are indirect greenhouse gas emissions in a company’s value chain, and promote eco-friendly practices across all operations.

One of the key initiatives within GoGreen Plus is the use of Sustainable Aviation Fuel (SAF). SAF is a cleaner alternative to conventional jet fuel, produced from renewable sources like waste biomass and used cooking oil. By utilizing SAF for global shipping, DHL Express is looking to pave the way for a more sustainable future for the aviation industry.

Supply chain ethics

Transparency and ethical procurement practices are essential throughout the supply chain. To achieve this, companies should go beyond simply stating expectations and actively engage with their suppliers. Here are some practical steps businesses can take:

• Clear code of conduct: Outline ethical expectations for suppliers, covering labor, environment, and anti-corruption.
• Supplier due diligence: Assess potential suppliers' ethical track records before onboarding.
• Continuous improvement: Regularly review and update ethical sourcing policies.

Community engagement

Ethical businesses actively engage with their community through corporate social responsibility (CSR) initiatives. This strategy may involve supporting local charities, participating in volunteer programs, or contributing to community development projects.

Transparent and honest communication

Open and honest communication is paramount in ethical business conduct. Companies should communicate transparently with their stakeholders. This includes providing accurate information about products and services, disclosing environmental and social impacts, and being responsive to consumer concerns.

DHL Express: Committed to ethical business

Code of Conduct

DHL Express takes ethical business practices very seriously. For instance, the company's Code of Conduct outlines its commitment to responsible corporate behavior, including compliance with laws and regulations, respect for human rights, and fair competition. This code serves as a guide for all employees, ensuring that ethical considerations are embedded in every aspect of the business.

Sustainability initiatives

Having long understood the impact of global trade on carbon emissions, DHL Express is dedicated to becoming a leader in sustainable logistics. Its commitment to environmental sustainability is evident through its comprehensive GoGreen Plus initiative.

DHL has also invested significantly in transitioning its fleet towards electric vehicles, optimizing delivery routes using advanced technology, and implementing energy-efficient technologies and practices in its facilities and operations. 

Social responsibility

For companies like DHL Express, social responsibility is a core value that guides their actions and initiatives. DHL Express actively participates in various social responsibility programs globally which include disaster relief efforts, partnerships with non-profit organizations, and initiatives to support education and community development.

Employee well-being

Recognizing that its employees are its most valuable asset, DHL Express prioritizes their well-being and fosters a positive and supportive workplace. This commitment is reflected in the company's efforts to provide a safe and healthy work environment, promote diversity and inclusion, and offer ample opportunities for growth and development.

Embrace ethical business practices for a sustainable future

Ethical business practices are essential for long-term success in today's business environment. They are not merely a compliance requirement or a public relations exercise but rather a fundamental driver of value creation and sustainable growth. 

By integrating ethical considerations into all aspects of their operations, Singaporean companies can unlock a multitude of benefits. Ultimately, ethical conduct is not just the right thing to do, it's also the smart thing to do for businesses seeking to thrive in the long term.

It's important to recognize that a company's ethical impact extends beyond its own operations. Partnering with a global shipping and logistics provider committed to sustainability can be a strategic decision with long-term benefits.