Rising seas, ferocious wildfires, floating islands of plastic in the Pacific Ocean that are 50 feet long. The list of environmental calamities continues to grow. Business owners often feel that while environmental initiatives to mitigate problems are good for the Earth and better for consumers, they can hurt business. Making something green or sustainable involves higher costs without a corresponding bump in profits — at least that’s what many think.
However, a growing body of evidence from companies around the world suggests that the relationship between ecology and economy is not as competitive as many assume. When done well, it’s possible to advance both pursuits simultaneously.
Customer Appreciation, Big Savings
Many consumers are increasingly interested in purchasing from companies with a sustainable focus. A study by Nielsen found that more than half of online consumers across 60 countries say they are willing to pay more for products and services from companies that are committed to positive social and environmental impact. In North America, 42% of respondents say they will spend more to buy socially responsible brands.
Ethical concerns can be the drivers of huge savings. Large companies have saved substantial amounts of money by investing in sustainability. PepsiCo Inc. saved more than $375 million between 2010 and 2015 after starting energy, green packaging, water, and waste reduction programs. Between 2008 and 2018, Hilton reduced carbon emissions and waste by 30% and energy and water consumption by 20%, saving more than $1 billion in operating costs.
Little Changes Can Add Up
But you don’t have to be a multi-billion dollar conglomerate to reap the rewards of going green. Small changes can save money, lead to higher employee satisfaction and attract more customers.
Allowing employees to telecommute can save on how much office space you will need to buy or rent, lead to lower utility bills and even cut the cost of how much you spend on such supplies as paper towels and copy paper. According to Global Workplace Analytics, which focuses on workplace strategies, average real estate savings with full-time telework is $10,000 for each employee working at home for a year. By allowing some employees to telecommute, IBM slashed real estate costs by $50 million and drug company McKesson saves $2 million a year.
While in the office, shed some light on energy efficiency by switching all lighting to LEDs. While they cost somewhat more to purchase, savings add up over time. According to the Consumer Federation of America, the average 10-year cost to buy and use an LED light bulb with the equivalent of 60 watts was $13.70, while the average 10-year cost of the incandescents and halogens was $69.49.
Water- and energy-saving appliances can save a small office about $300 a year, according to the U.S. Environmental Protection Agency. Save trees—and costs—by printing and copying fewer documents. Tell employees they don’t need to print out emails and reports and consider making more of your business’s publications digital. And for the paper you do use, make sure you have accessible recycling bins so that it doesn’t end up in landfills.
Renewable Energy Benefits
If you own the building in which you house your business you have even more options. Solar power can reduce your carbon footprint and substantially reduce electricity costs. Converting sunlight to electricity that’s generated by burning coal keeps carbon from being released into the atmosphere and exacerbating climate change.
According to EnergySage, which helps match property owners with solar providers, the average commercial property owner pays around $538 in monthly electricity bills before going solar. After solar panel installation, their electricity bill was reduced to approximately $91, cutting costs by 83%. The initial investment in solar panels can be pricey, but tax credits may be available to help offset costs, and some companies offer solar panel rentals rather than purchase. Solar water heaters and ovens can help cut down on electricity costs as well.
Depending on how much land your business occupies, it might be worth investing in a wind turbine to generate electricity. You will need to check zoning ordinances and laws about how far a turbine needs to be placed from buildings and trees. As the wind pushes the blades of the turbine, energy is captured. And, as with solar, if more electricity is produced than your business needs, the power company may pay you for the excess.
Another renewable energy option is hydropower, where energy is produced with flowing water that turns a waterwheel or pump. The new micro-hydropower systems are a far cry from water mills used over the centuries but operate on much the same principles.
Implementing green initiatives can mean you might have to think about reorganizing some of your business practices, reassigning some employees to take on research and oversight roles for new programs. Some organizations hire a sustainability director. Take a look at your current organizational chart and see if some shuffling can help align new duties that will help you protect the environment while also increasing profits.