Sustainable Practices Good for Businesses During Economic Crises

Companies prioritizing sustainability are better positioned to survive during times of crisis and experience economic growth, new research from the University of Guelph has found.

Researchers looked at sustainability performance during the COVID-19 pandemic and before and after the 2007-08 financial collapse.

They found companies that invested in environmental, social and corporate governance during the global pandemic had more positive economic outcomes, whereas the opposite occurred during the 2007-08 financial crisis.

Now, sustainability provides a kind of “insurance” to protect against economic downturns, researchers found.

“If you think that environmental damage isn’t going to impact economic growth, you’remistaken,” said co-author Dr. Kathleen Rodenburg, professor in the School of Hospitality, Food and Tourism Management at the Gordon S. Lang School of Business and Economics. She o-authored the study with Dr. Jing Lu, Dr. Lianne Foti and Dr. Ann Pegoraro, all faculty members in the Lang School.

Companies are now recognizing that sustainability helps with long-term performance, Rodenburg said, leading to improved investor confidence and business reputation, among other advantages.

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