April 22, 2020
Sustainability is more than just a buzzword in today’s business world. It’s about the short-term and long-term health of our environment, our communities, and our companies. Even if you’re personally concerned about the effects of waste, pollution, and unsustainable practices, do you extend that concern to the way you run your business? The evidence shows sustainability is worth the investment. How can sustainable practices help you grow your business? Here are six benefits of carbon footprint management.
1. Keep operating costs down
If you’re not optimizing every part of your business, you’re leaving money on the table. Many environmentally friendly practices double as cost-saving measures by reducing waste, whether it’s switching to a paperless office or cutting back your energy use.
For example, Kimberly-Clark invested $350,000 in LED lighting and retrofitting to replace less efficient fluorescent bulbs in one of its fabric mills, saving $160,000 per year. With the help of a $93,000 utility rebate, the project paid for itself in less than two years. Advocate Health Care, an Illinois-based healthcare system, reduced its energy consumption by 23% per square foot between 2008 and 2015, keeping 203,000 metric tons of carbon dioxide out of the environment. In doing so, the healthcare system saved $23 million.
Lower operating costs help your bottom line while a reduced carbon footprint helps the planet.
2. Help customers feel good about your business
Across industries, consumers are increasingly demanding more sustainable products and services from environmentally conscious businesses. An analysis by NYU’s Stern School of Business showed this demand accounted for $113.9 billion in sales in 2018, up 29% from 2013.
But the demand for sustainability doesn’t stop with products. According to Nielsen, 81% of consumers worldwide feel strongly that companies should help protect the environment. This means managing your carbon footprint is crucial to earning the trust of your target audience, whether they’re patients, patrons, or partners. Promoting successes in going green can help you position your business as the responsible, environmentally friendly choice.
Going public with your efforts to reduce, reuse, and recycle is also an opportunity to be transparent with your customers — a growing need for every company. A 2018 study by Sprout Social showed 86% of consumers believe transparency is more important for businesses than it’s ever been. This means managing your carbon footprint can be an excellent public relations move.
3. Get ahead of regulations
With 1,810 climate-related laws and policies worldwide, compliance is likely already on your radar. Managing your carbon footprint can of course help you stay on the right side of the law, saving you from expensive penalties and keeping you in business. As climate change is a rising priority with many countries, it’s safe to expect additional regulations in the future.
Sustainability efforts above and beyond what the laws currently require will make it easier to adjust to stricter regulations that may be coming. They also demonstrate your commitment to environmental responsibility, positioning you as a leader rather than a follower.
4. Stand out from competition
Consumers have countless options when it comes to which products they buy and which companies they support. Setting your business apart from the rest can be difficult. Showcasing your environmental responsibility can help people determine that your business is the right one for them. Many shoppers — 44%, according to one study — say they prefer to patronize companies that share their values, and 88% say they would be more loyal to a company that supports social or environmental issues they care about. In fact, many people are willing to pay more for a product or service that they know is sustainable.
Of course, your business isn’t the only one trying carbon footprint management. Taking concrete steps to reduce, reuse, and recycle can help you attract vendors and other partners who share the same commitment to sustainability, thus magnifying your collective impact.
5. Be a catalyst for innovation
Doing things the way you’ve always done them can stunt your company’s growth when it comes to innovation. For many businesses, new sustainability practices have presented challenges that resulted in innovative solutions.
An excellent case study is Nike, which developed the popular Flyknit material to manage its carbon footprint. The specialized Flyknit yarn system creates 60% less waste than traditional shoe construction methods. In four years, it diverted 182 million bottles from landfills. Flyknit shoes have also been a hit with consumers, bringing in upwards of $1 billion in the first five years.
Innovation can happen in all kinds of industries. In the Netherlands, the flower industry’s search for more sustainable growing methods led to major cost savings, improved their product, and made them more competitive in the global market. Without these environmental concerns, these business innovations would not have happened. Your efforts to reduce pollution and be a better steward of the environment could lead to your next big breakthrough.
6. Investors expect it
Investors are increasingly concerned about the carbon footprint management in their portfolios as climate matters become more urgent. Many are divesting from carbon-heavy companies and industries and scrutinizing the sustainability practices of the companies they invest in. Sometimes this is out of genuine concern for the environment; other times it’s an effort to avoid future fines or other risks associated with a failure to go green. Either way, this trend is worth your attention.
The world’s largest investment firm, BlackRock, has announced it will make sustainability a core feature of its investment strategy. That means avoiding investments in companies with a poor track record in environmental areas and focusing on greener companies and industries. Bank of America has pledged $300 billion toward sustainable investments over the next 10 years, and Goldman Sachs has said it will invest $750 billion over the same period.
Demonstrating your commitment to sustainability can help you attract investors that are key to growing your business. It can also help you keep your current investors happy as their concern for sustainability increases.