Going green could save greenbacks and more
March 20, 2023 | Symphona
Nowadays many businesses are looking for creative ways to cut costs and preserve profits. As a bonus, some profit-enhancement initiatives can also be good for the environment. Here are some eco-friendly moves that may enable your business to cut costs — as well as build revenue and long-term value.
The most obvious way going green can save money is through reduced consumption of water, electricity and gas. Many utility providers will provide free audits of your company’s consumption. In the process, you may learn simple, but not necessarily obvious, steps to save resources.
For example, did you know that allowing electronic equipment to rest overnight in “standby” mode can add 10% to its energy consumption? You can lower consumption and your energy bill simply by powering down electronic equipment completely at the end of the workday.
Examples of other green business practices include:
• Minimizing single-use items, such as disposable coffee cups, paper bathroom hand towels, plastic water bottles sold in vending machines and single-serve coffee pods,
• Choosing paper products over plastic alternatives,
• Providing recycling bins and discounts to customers who bring in reusable bags,
• Using electronic methods for communication and data storage,
• Maintaining work-from-home options for employees to cut commutes,
• Providing financial incentives to employees who commute using public transit,
• Donating unneeded office equipment and furniture, instead of sending them to a landfill,
• Installing water-saving faucets and toilets,
• Shipping products using full truckloads (rather than partial truckloads), whenever possible, and
• Selecting suppliers that share your commitment to sustainable business practices.
Modest changes your business makes can be magnified to the extent that they inspire employees and customers to adopt the same practices personally. Plus, certain energy-efficient improvements may qualify for valuable tax breaks.
Opportunities to add value
Green business practices may sometimes increase business expenses and/or require capital investment without an immediate financial reward. However, companies that commit to going green may reap rewards over the long run.
For instance, studies show that many people would be willing to change their buying habits to help reduce negative environmental impact. That includes paying more for green substitute products and switching to more eco-friendly brands. So, going green can help generate additional revenue, grow market share and improve gross margins.
Likewise, adopting green business practices may also make your business more competitive with others that have already jumped on the bandwagon — and may give you a leg up on competitors that aren’t as environmentally conscious. Plus, a commitment to green business practices may help you attract and retain workers who have similar values. This may be a major upside in today’s tight labor market.
Showcase your efforts
Financial statements are a great place to communicate your company’s commitment to eco-friendly business practices. In a financial reporting context, green business initiatives fall under the umbrella of environmental, social and governance issues. These matters may be disclosed in your footnotes — or you may decide to issue a separate “sustainability” report. Contact us to discuss which financial reporting options would be most effective for your business.