Some attribute it to Al Gore’s film, An Inconvenient Truth. Others point to the disastrous affects of Hurricane Katrina. And just about everyone knows that something’s wrong with eating Thanksgiving dinner on your back deck in 30- degree heat. For whatever reason, North Americans are finally convinced of the growing urgency of addressing global climate change.
Unfortunately, when it comes to investing in sustainability strategies, most business owners are too time-crunched and cash-poor — if they even know where to start. “Busy is definitely part of the problem,” says Whitby, Ont.-based Bob Willard, one of North America’s most respected analysts of the value of environmental sustainability in business.
But here’s a reason to find some time. In the past few years, organizations in Canada and around the world, from KPMG to the Canadian Council of Chief Executives, have been extolling the benefits of going green. Willard’s own extensive research indicates that by integrating sustainability practices into their operations, small and medium-sized companies can increase their profits by at least 66% over five years. “Being socially responsible doesn’t impede business success,” says Willard. “It accelerates it by avoiding risks and adding to the bottom line.”
The low-hanging fruit comes in the form of eco-efficiencies, “which is just a fancy term for saving money in certain areas,” says Willard. Among them: energy, water, materials and waste handling. For example, reducing waste volumes can reduce the need for the labour and machines that handle waste.
In the longer term, green firms can also expect reduced recruiting and attrition costs, and increased productivity. “Employees want to contribute to a company that they think is doing the right thing,” says Willard. For example, three-fifths of the graduates and potential employees surveyed by global management consultancy Accenture in 2004 rated “ethical management” as an important factor in choosing an employer. Similarly, 68% of the students in a 2003 global survey by Toronto- based GlobeScan disagreed that salary is more important than a company’s social and environmental reputation when deciding which company to work for.
Going green can boost revenue as customers increasingly factor the corporate citizenship of potential suppliers into their purchasing decisions. For instance, two-thirds of consumers are likely to switch their spending to companies that have demonstrated a commitment to green policies, according to a survey released earlier this year by Bullfrog Power, a Toronto-based producer of electricity from environmentally friendly sources.
Finally, more savings can be achieved by green businesses, which financial institutions view as better risks, in the form of reduced insurance and interest rates. “When all benefits are quantified in a holistic business case, the rationale for acting becomes readily apparent,” says Willard. “The market is so ready for this stuff. The timing is perfect.”
Vancouver-based Small Potatoes Urban Delivery has enjoyed significant benefits from implementing green initiatives. The grocery-delivery service has, for example, cut 60% from its lighting costs by removing lights from areas that didn’t need to be lit, and by replacing others with energy-efficient bulbs and ballasts. It prints its customer newsletter on the back of invoices, saving 200,000 sheets of paper per year, as well as the employee time it takes to stuff an extra sheet into every order. It also buys many of its computers second-hand or rebuilt, saving the company thousands of dollars while preventing e-waste. (Globally, discarded electronic devices contribute one billion pounds of plastic to landfills.)
The company even has an easier time finding staff because of its policies. “A number of [job applicants] say they chose us because of our social and environmental mission,” says president and CEO David Van Seters, adding that his recruitment costs have been “significantly reduced.”
Start your colour shift simply by asking employees and customers how they’d feel about your business going green, and get them engaged. “Keep it loose and open, as a fun thing to take a look at,” says Willard. “Don’t go into this like it’s a crusade.”