Green actions can boost business profits and resilience
The economic and business outlook is modestly improved, but still tenuous. Many businesses are wisely continuing to employ the strategies and tactics that helped them survive the depths of the recession, and keeping alert for additional strategies to boost performance and resilience in challenging economic times.One such strategy that can help a business boost both profitability and resilience during any economic downturn is increasing the organization’s environmental sustainability. Sustainability refers to adding a focus on long-term environmental and social responsibility to the traditional business focus on financial responsibility.Sometimes it’s assumed that any focus on environmental responsibility would only add costs, but businesses are increasingly realizing that increasing a company’s sustainability performance actually results in numerous sources of business value. These are briefly described below, emphasizing the three that offer the most near-term benefits.Near-term benefitsProcess Improvements: By improving processes businesses new to environmental sustainability can realize immediate positive impacts on their results and resilience. By assessing all of their value chain activities, companies can uncover countless opportunities to reduce energy, waste and cost, and to increase resource efficiency, productivity and profits. Many sustainability actions are low-cost or virtually no-cost, and many have ROI and payback periods competitive with or better than other typical business or capital investments.Risk reduction: Improved environmental sustainability helps reduce regulatory, legal, public relations and business risks. By being in compliance with local environmental regulations, sustainability reduces the potential for fines or fees.Sustainable practices also reduce the risk of lost business due to customers’ environmental requirements or their desire to work with more sustainable companies.Businesses in locations or industries vulnerable to climate change impacts (e.g. coastal businesses, seasonal tourism) also have a vested interest in reducing their contribution to the climate change that could put their business at risk for losses or increased insurance costs.Brand and culture benefits: Businesses that improve their environmental performance gain increased employee and customer loyalty and an enhanced reputation in the community, often leading to both direct and indirect financial benefits.Employees continue to report that they prefer working for companies that are environmentally and socially responsible. Companies enhancing their brand via sustainability are often able to hire the best talent, reduce the time and cost of the recruiting process, and significantly reduce employee turnover costs.Sustainability actions can even contribute to increased employee productivity, reduced absenteeism, and in some cases reduced health-care costs for businesses.Greater customer loyalty translates into protection from loss of revenue to competitors.And an enhanced reputation with local community officials can help maintain license to operate and expand operations if needed.Future benefitsThe benefits of an increased sustainability that are further down the horizon include product and market opportunities, as well as ways to favorably influence the business context. Companies can explore ways to enhance the environmental performance of their products or add new – often premium-priced – environmentally friendly product lines to meet customer expectations.Companies can also often uncover or create new market segments that have a sustainability component (think Zipcar and short-term auto rental).Finally, companies that enjoy a reputation for being green can often favorably influence industry standards, regulations, legislation and other “rules of the game” that may not only offer broad benefits, but which may also benefit the company itself.In a challenging economy that is in a cautious recovery, the instinct is to be wary of anything that seems like additional cost. Many businesses are finding, however, that well-planned environmental sustainability strategies and actions, with their focus on wise use of resources, actually deliver significant benefits that strengthen both the bottom line and the long-term foundation of the business.After all, that’s what sustainability is all about – resilience over the long haul.Bryan Sheehan, founder and president of SymbioSus Sustainability Consulting Inc., can be reached at 774-285-6823 or firstname.lastname@example.org.