The last decade has seen environmental concerns become a common feature in the minutes of board meetings the world over. The climate crisis and the corresponding pledges made by national governments to curtail its effects have had a marked impact on all of us, including those in the business community.
As a business owner, investing in environmentally friendly solutions might be appealing – but it’s a little harder to perform a cost-benefit analysis when the advantages of going green aren’t exactly clear. Return on investment (ROI) is critically important to businesses, especially given the tumultuous economic circumstances of 2020, and cutting fossil fuel usage or switching to eco-friendly appliances might not be top of the agenda right now.
If these concerns sound familiar, keep reading to learn how adopting sustainable business practices could benefit your business.
1.Improved brand image
Going green means more than just doing the right thing. By adopting more sustainable business practices, you stand to generate a stronger following and build a better brand image.
All of this comes down to public opinion and awareness. According to figures from KPMG, some 67% of UK consumers say that they care more about the environmental impact of the goods they buy than five years ago. The same study showed that 53% of consumers opted for companies that deal in environmentally friendly goods whenever possible.
Whether it’s water conservation, better electricity management, or a supply chain overhaul, getting your green credentials right could leave you in a better commercial position overall. These days, brands perform best when they realize exactly how they appear to the public eye, and that means that action is absolutely necessary when it comes to important issues like climate change.
Showing your commitment to the environment can go a long way when it comes to the public’s perception of your business and could even lead to improved loyalty along with new customs.
2.Reduced business costs
One of the key concerns cited by sustainability skeptics is that investing in greener business practices could be disproportionately costly. In stark contrast to this belief, the reality is that environmentalism can in fact lead to reduced business costs and increased efficiency.
The development of sustainable business practices has a two-fold effect on business efficiency. Firstly, any environmental strategy worth it’s salt will include energy conservation measures that could lower your business energy bill and introduce sophisticated systems such as air source heat pumps that reduce the need for you to spend with a heating supplier.
In addition to this, employees involved in your business’s transition to new energy-efficient ways of working are more likely to be invested in the company’s future. Policies that synergize with the concerns and ethical beliefs of staff can lead to a more engaged workforce and it’s not hard to see how that could lead to higher working efficiency levels.
3.More fundraising opportunities
Sustainability is a big business outside of the consumer realm, too. With figures from investment hub Morningstar indicating that investors poured €120 billion into sustainable investment options during 2019 alone, the markets have displayed a profound interest in green business practices.
Whether you’re heading towards a public listing or if you’re just a small family business, the interest shown towards commercial sustainability is a sign of things to come. Investors would not have put so much money on the line if they weren’t confident in the future of environmental businesses, and their firm belief in green corporations is only underscored by the €668 billion worth of assets under the management and ownership of European sustainable funds.
If you can differentiate your business from its competitors by committing to an eco-friendly strategy and more palatable commercial activities, you could very well benefit from some of the capital that’s on offer. In plain terms, you could go green and expand your business with the extra funding you generate as a result.
4.Increased profits
Of course, business decisions usually come down to the bottom line, and sustainability is no different. Whilst you might be concerned about changing your business practices or investing in what can ultimately be quite expensive technology and green utilities, becoming more eco-friendly can in fact boost profits.
According to McKinsey’s 2014 report Profits with Purpose: How Organizing for Sustainability Can Benefit the Bottom Line, companies with high ratings in environmental, governance, and social responsibility outperformed the market over the mid to long term. What this shows is that an investment in green practices is not only a commitment to the environment but also to the future success of your business.
It’s a well-established fact that firms that can display a robust approach to corporate social responsibility perform better than their more unscrupulous counterparts – ultimately leading to a better business outlook.
5.A futureproof business model
Climate change is a truly global issue, and no country can hope to get away with shirking its responsibilities. With the Paris Agreement driving the international movement towards reducing greenhouse-gas emissions and supporting sustainable business practices, there can be little doubt that we will see significant legislative and regulatory changes as governments move to make good on their climate pledges.
In the UK, the ground has already been made towards a brighter and greener future. With a commitment to reducing greenhouse gas emissions by 80% by 2050, and an outright prohibition on the production and sale of new petrol and diesel cars from 2030, the nation is on track to become a leader in the field of sustainability.
As further rules and regulations pass through parliament, businesses will need to make a substantial investment to bring their practices in line with the law. Manufacturers will need to find more effective and environmentally friendly waste disposal solutions, for instance, whilst retailers might have to provide enhanced disclosures in respect of their supply chain.
Businesses that move towards more sustainable practices now will be better equipped for the future. From penalties and fines to increased consumer demand for sustainable commerce, changes now could really pay off in years to come.
Preparing for a green (and profitable) future
If these benefits sound appealing, there are some quick wins that you and your business could benefit from. You’ll need to commit long term if you genuinely want to reap the rewards from more sustainable business practices, but some of the ideas below just might help you kickstart your eco action plan.
- Get real with recycling – and move beyond putting paper and ink cartridges in the right bin. Offices are a great place to get environmentally friendly without spending a lot, and upcycled furniture could add character to your workspace whilst helping to save the environment.
- Consider becoming a ‘B Corp’ – ‘B Corps’ are businesses that undergo a voluntary certification process every two years, with the aim of showcasing and verifying their social and environmental credentials. Getting involved in an accreditation process could help you to push for further environmental change within your business at a speed and scale that could not otherwise be achieved.
- Let employees work from home – during 2020’s COVID-19 pandemic and beyond! An exodus from the office might be just what the doctor ordered, since coronavirus has already made it necessary for businesses to consider how agile working can factor into their model. It might be all the more appealing when you realise that it could help you to cut office energy costs, too.
- Operate a leaner business – with downsized floorspace and limited use of heavier machinery. Whether you’re in manufacturing or have a professional services firm, the size of your carbon footprint correlates directly with the size of the premises and the kind of equipment you’re using. Cutting these down could result in a significant improvement in your environmental credentials, and even your overheads. If you’re moving your business online, you can do so simply by developing a good website and deploying a secure and reliable eCommerce payment gateway to ensure you can keep taking orders. It really can be as simple as that. Choose your best card reader for small business uk.
Ultimately, sustainable business practices are a choice now – but they won’t be for long. As the climate emergency reaches its eleventh hour, authorities across the world are looking for new ways to prevent any further degradation of our planet’s ecosystem and the environment that we call home. Getting on board now could see your business benefit financially and socially, whilst failing to take the necessary steps could spell trouble as consumers turn to greener competitors.