Why Companies are Investing in Sustainable Business Practices
More than 1,700 businesses across all 50 U.S. states have made an ambitious commitment to corporate sustainability. These companies — ranging from small businesses to large corporations like Target and Apple — make up $6.2 trillion of the economy and are contributing to the rise of sustainable business practices across many industries.
The companies are integrating an array of green practices, not only to reduce their carbon footprint, but also to improve their bottom lines.
Going green helps companies create a positive reputation, reduce spending, receive tax credits and provide employees with a healthy work environment. When you factor in how each of those contribute to your company's success, you'll likely notice a return on investment.
Consumers Value Companies with Positive Social and Environmental Impact
More than two-thirds of consumers say they are willing to pay more for products and services that come from companies committed to positive social and environmental impact, according to the Nielson Global Corporate Sustainability Report.
“Small businesses need to find a competitive advantage that creates customer loyalty — and socially responsible practices mean a lot — particularly to buyers who are already inclined to support small businesses," said Tom Paladino, founder and CEO of Paladino and Company, a green building consulting firm based in Seattle.
Many small businesses benefit from eco-conscious customer loyalty, like United By Blue, an outdoor apparel company based out of Philadelphia.
"We frequently see customers purchase from us because they know or have heard about the sustainable materials we use in our products, or because of our mission to remove a pound of trash from the earth's waterways for every product we sell," said the company's founder, Brian Linton.
Instituting Green Practices within Your Business Can Reduce Operating Costs
Green business practices focus on eliminating unnecessary waste and avoiding toxic chemicals. There are simple ways to begin using green practices within your organization that can also make a significant difference in your overhead.
For instance, switching to long-lasting LED bulbs, which use up to 80 percent less energy than standard light bulbs, can save your business up to $20 per bulb in annual electricity costs. That simple swap can really add up for a small business with a large office or retail space. Investing in Energy Star-qualified devices can further reduce costs, especially if your business uses commercial equipment that requires a lot of energy.
Paladino also recommends using e-receipts instead of paper. Approximately 250 million gallons of oil, 10 million trees and 1 billion gallons of water are used to create receipts just for U.S. companies. With e-receipts rising in popularity, eliminating paper receipts is a simple way to significantly reduce cost, carbon footprint and waste — and to begin transitioning to a paperless business.
Along with these simple, low-cost options, some businesses may want to invest in larger-scale efforts — such as installing solar panels to generate electricity.
Robert Gaskill is co-founder and CEO of Motev, a Los Angeles-based luxury car service stocked only with electric Teslas. "Going green was substantially more expensive up front, but we know there will be a savings over the long term that will eventually reward us in a couple years," Gaskill said. Plus, it has the additional perk of giving his company positive publicity. "We are starting to be contacted by clients that have used standard car services but now have green initiatives and incentives proving we are in the right place at the right time."
Receive Credits and Rebates for Your Sustainable Business Efforts
Your business may be entitled to tax credits and rebates if you go green by using green energy sources, using green vehicles or donating to green charities. In addition, having an energy audit done can save money on energy costs. Look into whether your state or city will pick up some of the cost to make repairs to your office to improve its energy efficiency — many have programs that do so.
One such program, San Diego Gas & Electric's Business Energy Solutions Program, can defray the cost of updating things like lighting, heating and cooling systems for your office space with their money-saving incentives for small businesses and no-interest financing options. The state of New York offers the NY-Sun Incentive Program for small business owners who want to invest in solar energy for their small businesses. Advantages of the program include financing options and discounts on solar systems for commercial buildings. In addition, the federal government offers rebates on energy systems based on solar, wind and geothermal power for small businesses through the Business Energy Investment Tax Credit (ITC).
Green Initiatives Contribute to a Healthy Work Environment and Strong Company Culture for Employees
Dan Miller is president and founder of Mulberrys Garment Care, a small business that operates in Minnesota and California. His firm uses only environmentally-friendly chemicals to dry clean and launder clothing — a practice that helps protect the health of his customers and employees. "There's no question that our green business practices — which are a part of our ethos — and our excellent service record help attract customers who appreciate that we use nontoxic chemicals to launder their clothing," said Miller. "It's the main thing that differentiates us in the industry and creates a safe working environment for our employees."
For the same reason, Paladino recommends creating a greener officer by using low-VOC paints and finishes in your building, replacing existing cleaners with non-toxic products, and decorating with live plants to improve air quality. By cutting down on indoor exposure to toxic chemicals, your company can create a healthier work environment for everyone.
Green initiatives can also be used as employee perks. For example, creating a flex program for telecommuting or transit to reduce vehicle-based greenhouse gases gives employees the flexibility to work from home or gain additional compensation for commuting.
Evidence shows that sustainability is becoming a major component of business in the U.S.. The companies that are making sustainability part of their core business strategy are benefiting from that decision.