Banks Increase Investment in Sustainability - Assignment Example

The paper "Banks Increase Investment in Sustainability" is a wonderful example of an assignment on business. Among the ways in which banks invest in sustainability is through the adoption of green technology. By adopting this type of technology, banks are seeking to replace the consumption of non-renewable resources with renewable resources. The key to the adoption of this technology is the use of renewable sources of energy such as wind and solar. Banks are also investing in grassroots environmental projects as a way of creating sustainability. In addition, banks seek to reduce their greenhouse gas emissions and to further train employees on the need for environmental conservation. Some banks are also keen to ensure that they partner with companies whose goals are geared towards delivering value to society and the environment.

Among the advantages of investing in sustainability is an increase in economies of scale and efficiency of operations that in turn allow for low pricing of products and services (Krosinsky & Robins 142). This helps a company to keep its rivals out of the competition by providing low-cost products and services than the competitors can offer. Investing in sustainability provides a pricing power for a company and this makes it increasingly difficult for such a company to lose its market share even during economically hard times.

Investing in sustainability also establishes a positive image that appeals to consumers. Research by the Natural Marketing Institute indicates that consumers are 58% more likely to buy products and services from companies that invest in sustainability. The research further shows that 68 million adult Americans make their decisions on the goods they will purchase based on the social and environmental values held by a company. In addition, the research indicates that 52% of employees feel that their employers are not doing enough to conserve the environment (Krosinsky & Robins 142). The report highlighted the importance of investing in sustainability as a way of increasing employee retention and recruitment.

Despite its benefits, investing in sustainability can also pose challenges to a company. Among the risks associated with investing in sustainability is the uncertainty associated with natural sources of energy. Since the supply of energy by renewable sources depends on nature, relying on these sources may be risky. Additionally, investing in sustainability being a long-term project can also pose short-term risks to a company. These risks include reduced operational funds that can lead to inefficiency in management. It is therefore important that a company weigh available options before deciding on the sustainable investment approach it will take.

Ranked as the most profitable bank in the US, Wells Fargo’s sustainability goal can be seen as a genuine commitment rather than a mere window dressing to make the company look good. Having recorded a net profit of $20.8 billion in 2013, the company has the financial capability to achieve its sustainability goal. The company’s steady growth into America’s most profitable bank has also contributed to its resolve to invest in sustainability. With the bank financing a third of all mortgages in the US, it is becoming increasingly important for the company to invest in sustainability to secure this growth.