In today's business environment, finding ways to make a positive impact is a crucial consideration -- and one of the best ways to achieve this is by going green. Sustainability is poised to majorly impact corporations, investors, and small businesses in the coming years.
Building sustainability can deliver very real benefits to businesses of all sizes and industries. You don't have to be a big brand like Amazon to start trying to go green -- or seeing the results. Here's how.
While there are costs associated with going green, sustainability efforts can help businesses reduce their expenses over time. For example, an analysis by O2 found that in the United Kingdom, a business with 1,000 employees could save an average of $3.3 million per year on energy and travel costs simply by adopting a flexible workspace with employees working from home two days a week.
Sustainability initiatives designed to eliminate waste can also boost savings. Streamlining manufacturing and implementing steps to prevent damaged or defective goods can help lower production costs.
Even actions that don't require changing business practices can help save money. For example, LED lighting has been found to use 90 percent less energy than incandescent bulbs while offering a 25-times longer lifespan. Simple steps like improving building insulation or using energy-efficient appliances and equipment can further reduce energy-related expenses.
Across practically every area of your business, you will likely find opportunities to implement sustainable solutions that help cut costs -- as long as you take the time to look into them.
In a recent interview with Investing.com, Maksim Sonin, a Sloan Fellow at Stanford Graduate School of Business, argues organizations that commit to investing in technology focused on reducing carbon emissions can separate themselves from their competition. As a long-term investment, adopting climate-focused technologies and solutions will become an important point of differentiation with climate-conscious customers.
In fact, according to research from PDI Technologies, 68 percent of Americans are willing to pay more for sustainable products, and 79 percent want to buy from environmentally friendly brands. Among Gen-Z and Millennials, these numbers are even higher.
Despite this, many small-business owners have been sluggish in implementing sustainability initiatives. As such, going green offers significant potential to jumpstart your brand by giving you a clear unique value proposition, and to start winning over customers who are actively wanting to buy from sustainably-minded brands. Capturing brand loyalty through sustainability now will be much better for your company than waiting until everyone is doing it.
Another important consideration with going green is that it will help your business be better prepared for future regulatory changes that are sure to come. Even though CERAWeek has seen debates about whether switching to renewables is the right strategy, the growing consensus is that we need to move to a low-carbon economy.
In the United States, the current administration has climate goals to achieve a net zero emissions economy by 2050, as well as eliminate carbon pollution from electricity by 2035. Legislation that creates incentives to implement sustainable practices (such as tax credits for solar installations) greatly offset the expenses associated with going green, making this more manageable for business owners.
In the long term, however, it is likely that businesses will be required to comply with climate-related regulations, regardless of their current level of preparation. Taking steps to become more sustainable now ensures that you won't be caught trying to play catchup when stricter regulations are introduced (which would result in a more expensive transition).
And of course, noncompliance would likely result in fines and other penalties that hurt your business's finances and reputation.
These benefits are really just a few of the ways that going green will help your business in the long run. The drive toward sustainability will only become more powerful in the years to come. Entrepreneurs who act now will position themselves to benefit the most, and put themselves ahead of others who will be forced to catch up.
At the end of the day, however, going green isn't just about benefitting your business -- it's about helping the planet and everyone on it. And that should be motivation enough.
