NextGen IUS Business Club: Why Sustainable Businesses Win?

Every action taken by an individual or a business leaves a mark on the community, becomes part of history and shapes the future. Businesses, individuals, alongside governments and organizations, form a crucial system that determines the sustainability of our environment. Each carries responsibility for their actions.

This article examines why businesses that care about environment and sustainability win in today's market, and why those that ignore them risk becoming irrelevant.

This analysis focuses on the 17 Sustainable Development Goals (SDGs), which are the core of the United Nations „2030 Agenda for Sustainable Development”. These goals include the impact on everyone in society. The Environmental, Social and Governance (ESG) framework is used to assess a business’s contribution to sustainable goals. ESG provides investors, partners, and stakeholders with concrete metrics to evaluate a company's sustainability performance. Aligning with the SDGs improves ESG performance and helps companies attract investors and enter global markets.

Using the ESG framework, the SDGs have become practical business tools rather than just ethical guidelines, helping companies grow and stay competitive in the long run.

SDGs as a business strategy

The SDGs provide businesses with a standardized language to communicate sustainability efforts to global stakeholders. While national regulations often differ across countries, the SDGs offer a global framework that supports international partnerships and investment.

Alongside other forces, businesses play an important role in supporting the achievement of the Sustainable Development Goals. Their impact, resources, innovation, and influence on markets make them central actors in this global mission. Companies that do not integrate sustainability into their strategy are already falling behind. As competitors, governments, and consumers move toward markets where sustainability is the new standard, firms that ignore these changes will gradually lose relevance.

SDGs give companies clear strategic advantages:

• Direction and goals: Clear targets aligned with global priorities
• Communication tool: Standardized language for reporting sustainability efforts
• Progress tracking: Measurable indicators to monitor impact
• Network building: Connection with global partners, investors, and conscious consumers
• ESG enhancement: Direct improvement of Environmental, Social and Governance scores

Through the SDGs framework, the idea of sustainability becomes a practical strategy. This strategy helps create a global community of governments, companies and individuals who share common values. As a company's ESG profile is increasingly important for investors, global partners, and customers, implementing the 17 SDG goals means businesses are strengthening their market position.

How do businesses shape SDG outcomes?

Understanding the strategic value of SDGs is one thing, but seeing their impact is another.

When businesses apply SDGs, their positive impact becomes visible in job creation, improved labor standards, investments in education, environmental protection and support for local initiatives. Through their transition to sustainable business practices, companies transform both their internal culture and the communities they serve.

While all 17 goals are interconnected, Goals 8, 9, 12 and 13 directly shape business operations:

• Goal 8. Decent work and economic growth

  Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.

• Goal 9. Industry, innovation and infrastructure

  Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation.

• Goal 12. Responsible consumption and production 

  Ensure sustainable consumption and production patterns. 

• Goal 13. Climate action

  Take urgent action to combat climate change and its impacts.

Companies that perform well in these areas become more efficient, comply with regulations and stand out in the market.

How do governments support SDG Implementation?

Governments play a crucial role in creating the conditions that allow sustainable business practices to thrive. While businesses can independently choose many elements of their microenvironment, such as targeting sustainability-oriented customers, selecting suppliers that match their values, and cooperating with responsible intermediaries, in other words the macroenvironment in which they operate is shaped by government policies.

Government contributions include:

• Creating a clear regulatory framework aligned with SDGs
• Setting environmental, ethical and social standards for businesses
• Providing financial incentives, grants and tax benefits for sustainable practices

By shaping the legal and economic environment, they ensure that sustainability is integrated into the core functioning of the market.

The specific practices, tools and levels of support vary from country to country, but the principle remains the same: governments create the playing field on which sustainable business can compete fairly.

What exactly do businesses gain from sustainability investments?

Sustainable businesses think long-term, which influences internal processes and encourages everyone in the company to consider sustainability. By integrating the SDGs, companies build a stronger reputation and gain trust from their communities.

Concrete business benefits include:

• Market positioning

  Because sustainability is becoming the standard of future markets, investors and business partners increasingly assess whether a company operates ethically and sustainably. Entry into international markets, especially the EU, often requires high alignment with sustainability standards.

• Financial benefits

  Sustainable companies benefit from incentives, grants and support programs, which make their operations more efficient. High ESG scores also attract investment funds that prioritize sustainable portfolios.

• Target market alignment

  Companies whose target market includes Generation Z must take SDGs seriously. These consumer segments pay more attention to sustainability than any previous generation. They actively seek out ethical and sustainable products, research company values before purchasing and are willing to switch brands based on environmental and social performance.

• Customer loyalty

  Customers seek greater value and are often willing to pay higher prices if their purchase contributes to sustainability. This shifts competition from price wars to value creation.

   

Why do consumers reward sustainable brands today?

Customers are a key part of any company. Companies exist to solve customer problems and their success depends on how well they understand and meet those needs. A product is a solution to a customer's need, but it must also have the right price, place and promotion that match the target group. In today's markets, winners are not those who offer the lowest price. Winners are those who offer the greatest value.

Sustainable brands create a community, not just sales. It's about the emotion that brands evoke. The feeling that their purchase makes a difference. Customers feel they are contributing to a mission, not just buying a product. This emotional connection creates deeper satisfaction.

What drives consumer preference for sustainable brands:

• The feeling that their purchase contributes to a good cause
• Stronger emotional connection with the brand
• Greater trust in quality and transparency
• The perception that sustainable products last longer and are safer
• Customers increasingly purchase based on values, not just product features.

Real-world examples

These principles become clearer when we examine real companies. Consider two contrasting approaches:

1. Regional example: DM Drogerie Markt

   DM Drogerie Markt is a great regional example of a company that actively integrates the Sustainable Development Goals into its business. When shopping at DM, we can see sustainability in practice through a wide selection of eco and organic products, including the company’s own “DM Bio” line. The company also offers refill and bulk options where available, uses more recycled materials and less plastic in packaging, and provides recyclable bags at checkout. By making sustainability visible at every touchpoint, DM transforms routine shopping into value- aligned behavior, strengthening emotional connections.

   Step by step, DM raises awareness and helps educate consumers about responsible shopping and recycling. In addition to selling products, the company supports environmental initiatives, runs eco-campaigns and encourages healthy living, helping to achieve the SDGs.

   In this case, we can see that DM's approach include all three ESG pillars: Environmental by packaging reduction, Social with consumer education and Governance though transparent sourcing.

   While DM's efforts are commendable, questions remain about supply chain transparency at scale and whether their growth model can maintain these standards as they expand.

2. Global example: Temu

   The Temu platform introduced an option where, when ordering products, you can donate a symbolic amount for tree planting. Even though your order is worth much more than the donated amount, this optional gesture makes customers feel they are contributing to something positive.

   Temu's business model, fast, cheap, global shipping, inherently conflicts with Goals 12 (Sustainable consumption) and 13 (Climate action).

   This tree-planting option may focus more on image than real change. This highlights the risk of greenwashing, as simple actions such as a small tree-planting donation, can raise questions about how important it is to separate real sustainability actions from marketing tactics.

    

Challenges and limitations

Despite their many benefits, the SDGs can be difficult for businesses to implement because they also involve challenges and limitations, such as:

• Cost barriers

  Moving to sustainable materials, renewable energy, or ethical supply chains can be expensive, making it harder for smaller businesses to keep up. As a result, sustainability efforts often favor larger, better-funded companies.

• Greenwashing risk

  When companies use SDG language without meaningful action, it can reduce trust and make it difficult for consumers to identify real committed businesses.

Competitive disadvantage

In markets where sustainability standards are not enforced, companies that invest heavily in SDGs may face higher costs than competitors who cut corners. Without proper regulation, ethical businesses can be penalized for doing the right thing.

These challenges don't negate the strategic value of SDGs they highlight the need for clear standards, third-party verification and government support to level the playing field. As markets mature and regulations tighten, early adopters will be positioned to lead while laggards scramble to catch up.

At the end we can conclude that businesses play a key role in achieving the SDGs, but sustainability depends on the actions of everyone in society. Businesses benefit through profit, growth and loyal customers, while society benefits through a better environment, stronger communities and greater personal satisfaction.

Ajla Alijagić