By: Marc Karell, Owner, Climate Change & Environmental Services
Monitoring and Evaluation
Some companies are hesitant about becoming “green,” concerned about the costs or considering it an exotic, non-business issue. They think of this as actions to “save the Earth,” which is not their responsibility. However, sustainability is now recognized as a valid business concern. Savvy companies which have comprehensively addressed the issue have gained core business benefits. This article presents 9 purely business reasons (with real life examples) to develop a robust “green” program.
1. Making the Monetary Case
Reducing greenhouse gas (GHG) emissions is most commonly achieved by reducing both fossil fuel combustion and electricity usage. Given their high costs (example, >$4/gallon gasoline), such reductions will result in significant cost savings.
But energy savings are especially significant. If an energy audit saves your company $100,000/yr (less than $10,000/month) in expenses, what is the sales equivalent? At 10% profit, sales would need to be increased by $1 million/year to earn your company the same $100,000. Which is easier? The answer differs for each company, but for most increasing sales is more difficult (i.e, ads, salespeople, etc.). Also, energy reductions save perpetually, while increased sales must be repeated every year.
Reducing GHG emissions can also result in sellable carbon credits. The U.S. voluntary market can provide extra revenue if reductions are properly certified.
Finally, there are financial incentives to pay some upfront costs of “greening” efforts and gain tax rebates later.
Example: DuPont has reported investing heavily in energy reduction projects since the 1990’s. DuPont estimates that absolute energy usage declined by 18% since 1990, even though production grew by over 47%. In total, DuPont claims to have avoided over $5 billion in energy costs.
2. Create New Products and Sell More
Re-branded “green” products can give you a competitive sales edge. Example: GE’s Ecomagination is an example of re-branding existing products as “green,” leading to doubling of sales in three years.
3. Meet the Expectations of Customers and Suppliers
More customers care about product “carbon” data. Examples: Walmart requires many suppliers to submit GHG emissions data for eventual posting. According to Automation World, T-Tek Material Handling sells a beverage pelletizer using less energy than its competitors’ brands. Using “green” as its main selling point, sales of the T-Tek pelletizer soared.
4. Raise Employee Morale: