ROI Impacts of Going Green

Kyle Nixon Environment Leave a Comment

Your Business and the Environment

Running a successful business depends greatly on the return on investments of your decisions. Knowing where to invest can be very difficult at times, however there is a particular area that many companies are investing into that delivers consistent returns, and it is right outside your window.

The environment has proven itself to be quite the fruitful business partner to many companies. Knowing how to align your investments with the environment can result in great returns for your business.

An Investment in Your Image

Perhaps the most obvious return of your business going green is how it will benefit your business’ image. It is no secret that companies who go out of their way to be environmentally friendly are celebrated in the media. A great example of this is the company tentree, whose company slogan is “ten trees are planted for every item purchased”. Parallel to that, companies who have environmental mishaps such as; oil spills, or draining natural resources without a plan for sustainability, are often vilified and criticized in the media.

Investing in green initiatives for your company is a great way to appeal to a larger customer base, as environmentally-savvy customers actively seek out green companies. According to a 2015 ConeCommunications/Ebiquity Global CSR study that surveyed 10 thousand consumers from nine of the largest countries in the world: 90% of consumers expect companies to address social and environmental issues, and 84% of consumers reported that they seek out responsible products when they can. Many consumers will actively research what companies are doing for the environment, and by investing in green initiatives you will setting your business apart from your competitors.

Going Green Cuts Costs

How you feel about the environment might be irrelevant to your business, but costs and profits are not. However, by investing in green strategies for your business can greatly reduce costs and increase profits.

Over the last two decades, many large companies have made green investments and have seen a huge reduction in their business costs. Wal-Mart, for example, made a commitment to revolutionize their truck fleet in 2005. Through the innovation of loading, routing, and driving techniques they were able to deliver 830 million cases of product while driving 300 million fewer miles by 2007. By 2015, investing in a greener truck fleet alone saved Wal-Mart $1 billion. From 2005 to 2017, Wal-Mart has reduced their C02 emissions by 40 million metric tons through all of their green initiatives including the “greening” of their fleet.

Another example is DuPont, one of the world’s largest chemical companies. In 2008 they launched a new energy plan that cost $50 million to implement but saves them $50 million in energy costs each year. This green investment earned DuPont their money back in 12 short months and allows them to greatly save on energy costs and help the environment for every subsequent year, meaning after a decade their $50 million investment will save them $450 million. Between 1990 and 2010 DuPont was able to reduce greenhouse gases emissions by 72% and use 6% less energy while their company grew by 40%.

Decide What Works for Your Business

Many companies are cutting major costs by investing in green initiatives for their businesses. There are many ways you can go green and cut costs too. You can do something as simple as replacing the lights in your office with LED lights, or as elaborate as revolutionizing your energy plan. Going green is not something you have to figure out for yourself either, there are many services that will help you become environmentally friendly and cut costs. For example, a field service solution can provide you with software so your fleets can load, schedule, and route more efficient routes saving you time and money.

An Investment in Your Employees

Not all positive returns on your investments are obvious at first glance. Some returns are an indirect cause of your well-placed investment, and the return is unexpectedly beneficial to your business. In the case of investing your business into going green, the unanticipated return is how your employees will react and how they will benefit you.

Environmental awareness has become a popular habit for people to practice, particularly with millennials. Millennials are not just a new demographic of consumers to target, but are also entering the workforce and will very likely become your employees. According to various surveys and studies, almost 80% of millennials want to work for companies who are environmentally conscious. This mentality is not exclusive to millennials and by investing in green practices for your business you are creating a company that many environmentally-conscious employees would be proud to work for.

While a strong public image for your employees to be proud of is great, investing in green practices for your business can have much more significant benefits. By investing in greening your business’ workplace, you can create a work environment that allows your employees to achieve their full potential.

The benefits of a green building for your employees, and ultimately your business, are outstanding. The studies show that employees in green buildings are simply more efficient, which means a significant boost to your business. According to a study from the US Building Council, businesses with green buildings in the United States have seen $180 billion in increased work productivity annually.

Not only do green buildings allow your employees to be more efficient, but green buildings keep them healthier. Green buildings have been found to reduce self-reported “sickbuilding syndrome” symptoms such as respiratory problems, fatigue and skin irritations by 30%. Additionally, a study from The American Journal of Public Health showed that a green building could allow an employee that suffers from asthma and respiratory illness an additional 1.75 hours of work each year. Similarly, green buildings could grant employees who suffer from depression an additional 2.02 hours of work each year as well. Ultimately, the US Building Council has estimated that companies with green buildings are able to save up to $58 billion of sick time each year.

Commit to Your Investment

If you have decided to invest in the environment, you must ensure that you are committed to that investment. A half-hearted effort in your investment to the environment can very well lead to a negative return.

It is important to remember that many customers are very green-savvy and can identify “greenwashing” fairly easily. Greenwashing is when a company spends a considerable amount of time and money into creating the illusion that their business is “green” instead of using that time and money to implement business practices that actually positively affect the environment. Examples of greenwashing include when a company advertises their new “environmental action plan” after an environmental scandal for their company, or when a company overtly presents their “new green technology” but it is only a small fraction of their otherwise not-so-green business.

Invest in the Environment

Investing in green practices for your business is an investment in the future success of your business. The returns of which will see an image of your company that your employees can be proud of, an improved bottom-line, an increase in your employee’s efficiency, and most importantly: an improvement in their health and well-being.

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