3 Ways in which Green Business Will Improve Your Bottom Line
Green business – often called sustainable business – involves thinking about how your operations are impacting the natural or social environment in which you operate: in other words, looking at your business “through a green or sustainability lens”. EVERY business has an impact on the natural and social environments.
There are 2 basic questions to ask when embarking on a green or sustainability assessment:
- Are there ways in which I can change my business to reduce its negative -or create a positive – environmental or social impact?
- If so, which of these changes will improve my financial performance by reducing costs or increasing revenues?
Finding positive answers to the second question is critical because, if there’s no positive financial benefit to taking green or sustainable initiatives, most business owners will likely regard them as purely philanthropic endeavors to which they cannot devote time or resources.
However, there are hundreds of ways – some large, some small – in which green business actions deliver innovation, competitive advantage, financial benefit AND a positive impact on the natural or social environment. They fall into three general categories.
1. Cost savings, risk mitigation & improved operating efficiency
This involves looking inside the business and its operations to identify ways to:
- Reduce or eliminate waste (e.g. recycle material that is currently landfilled)
- Improve resource productivity (e.g. use less material to package a product or less energy to deliver a service)
- Reduce or eliminate risk (e.g. substitute a non-toxic material for a hazardous substance)
An extension of this is to engage suppliers to implement similar sustainability initiatives in their business such that it impacts your own business favorably – both financially and environmentally. Many large corporations are forcing their suppliers to “go green” for this reason but this is obviously more difficult for smaller companies
2. Incremental revenue generation through new or improved products, enhanced brand image, customer loyalty & market reputation
This means looking at the company’s products or services to determine:
- If they can be redesigned to reduce negative environmental impact (e.g. products that can be more easily recycled at end of life, delivering services electronically versus physically)
- Whether it’s possible to develop entirely new, breakthrough products or services that address a green or resource efficiency need in the market
- How the company’s green products or services can be promoted and marketed in such a way as to enhance the company’s image, enhance customer loyalty and increase revenues. (Other things like price and quality being equal or better, increasing numbers of consumers – both individuals and businesses – will opt for green products and services).
3. Establish a creative, productive, innovative people culture
This is one aspect of the often-overlooked human side of sustainability. After all, a business can (and many do!) “waste” its human resources just as easily as it can waste natural resources like energy and materials. Research shows that, other things like compensation and working conditions being a equal, people prefer to work for a company that practices green and sustainability initiatives because they like the idea that their work makes a beneficial contribution to the planet and/or the community as well as bringing them a paycheck. This will result in financial benefits to the company through:
- Reduced staff turnover
- Ability to hire the best and brightest because the company will be an “employer of choice”
- Improved productivity because employees are more loyal and hence inclined to go the extra mile. Probably drives better customer service too.
- Goodwill from the local community because employees’ commitment to green practices spills over into their personal lives and the local environment.
Featured Image Credit: https://www.flickr.com/photos/56227271@N03/