By: Nathan Sykes
The scientific consensus on anthropogenic climate change only grows stronger. The most recent word from scientists is that the present warming of the globe is “unprecedented” in the last 2,000 years. Some 99% of scientists stood in agreement on this in 2011, and now the scientific community has declared there’s “no doubt left” that human activity is warming the earth.
Of course, many types of environmental damage don’t require even climate change’s minuscule leap of faith. Individuals, companies and corporations engage in wasteful practices daily almost as a matter of course. And we seem willing to pollute our air and water to the point where our IQs begin to drop.
Some business leaders seem to believe going green has to come at the expense of profitability. But this isn’t the case. As we’re about to see, turning to environmentally friendly practices can also be a profit-booster.
Consumers Want Environmentally Conscious Brands
The public saw the light on good environmental stewardship sooner than the business community, and for reasons that should be obvious. Companies that double down on wasteful and environmentally destructive practices, instead of engaging in a good-faith effort to pivot to something cleaner, are not long for this world.
There’s no doubt in 2019 that consumers prefer sustainable companies and products. Nielsen has studied the demand for responsible environmental practices and found brands which capitalize on this demand can put themselves in an ideal position to outperform their rivals and score more business. In Nielsen’s words, “No matter what, sustainability is no longer a niche play: Your bottom line and brand growth depend on it.”
They back this claim with numbers. During the yearlong Nielsen study, the demand for sustainable personal care products grew by 13%, sustainable coffee by 11% and sustainable chocolate by 2%. As these statistics demonstrate, when companies are ready to make the switch to more environmentally friendly products, shoppers will be waiting to embrace them with open arms.
Financial Incentives and Tax Benefits
One of the most effective ways to inspire change is to come up with an incentive. Companies can be slow to change, so this means offering tax benefits and other financial perks for choosing sustainable practices and renewable energy.
Every state offers a different set of financial incentives, so it pays to see what’s available in your area. As of this writing, California has 218 incentives listed. Other states and U.S. territories have dozens or just a couple of programs in place. Here are some examples of the kinds of financial support companies can receive:
- Business tax deductions for installing lighting, heating, air conditioning or water treatment that reduces facility or campus energy use
- Grants and tax credits to make alternative energy installations easier to afford
- Subsidies and tax credits to purchase vehicles which meet relevant fuel efficiency standards
- “Bonus depreciation” for companies that reuse certain types of equipment or engage in recycling efforts
These are somewhat indirect ways to benefit your company’s bottom line, but the advantage is still clear. Investing in a clean energy system or a fleet upgrade reduces your taxes, as well as on your recurring energy bills.
Cost Savings From Organic and Sustainable Materials
Industries have been working to make it more realistic and cost-effective to manufacture using organic and sustainable materials. Depending on the vertical in which you do business, making this change could be far more attractive than you might have thought.
One of the most memorable success stories in organic manufacturing hit the news in the 1990s, when Ibrahim Abouleish, founder of Egypt’s first organic cotton farm, perfected the sustainable growing and harvesting techniques he’d been working on since 1997. Abouleish’s hard work demonstrated to other cotton producers all over the globe that sustainable growing isn’t just a nice idea, but is also extremely friendly to the bottom line:
- Abouleish’s farm, known as Sekem, helped reclaim farmable land from the Sahara region. Their organic growing techniques helped improve the soil’s ability to absorb CO2 and simultaneously reduced their farm’s use of water by up to 40%.
- Over time, the cotton farm’s spending on necessities continued to drop, even while their crop yield rose by nearly 30%.
- The cotton produced using these techniques is durable and more elastic than cotton produced in traditional ways.
Today, Sekem is one of the leading producers of organic food products in Egypt. The lessons learned from their early forays into organic planting, harvesting and manufacturing remain an illuminating example for businesses to follow.
Zhangzidao Fishery Group, located in China, is another success story. When they switched to integrated multitrophic aquaculture to create balanced ecosystems from which to farm, they created a system in which some species serve as prey for others, reducing the need and expense of bringing in external food sources. The process also does not exhaust seabeds or key marine species.
A Secondary Market for Refurbished or Recycled Products
Some of the best-known companies in the world don’t want you servicing their products and then selling them again on secondary markets. Microsoft had a man, Eric Lundgren, jailed for selling laptops he’d repaired and then installed copies of Windows on from restore discs. His goal was to help keep e-waste out of landfills by finding homes for electronic gadgets others didn’t need, didn’t want or couldn’t fix themselves.
This move justifiably generated some bad PR for Microsoft. But it did us the favor of catapulting “right-to-repair” legislation into the mainstream.
If companies want to stop consumers from discarding their products before their time, but don’t want to encourage the kind of behavior that got Lundgren thrown in prison, they can do a couple of things:
- Design hardware and software in an intentional way so users can repair these devices themselves more easily.
- Build a robust “secondary market” within the company for buying back used or damaged products from customers for resale or recycling.
It took years of research, development and investment, but Apple now has something that resembles option two. Customers with a busted iPad or MacBook can get some money back for it, and Apple gets a potentially resellable refurb. Everybody wins, including the environment. Smaller companies can do this too, but they need the right enterprise planning tools to get all the pieces into place and then to maintain visibility of every product shipment, return and refurb.
Ideally, you’re more convinced now that sustainability and a green company culture don’t have to come at the expense of profits. There are probably lots of options in front of you, right now, to help you connect these dots. The self-interest part is easy. After that, we have to be open to change, and we have to want to do better for our one and only planet.
About the author
Nathan Sykes is the founder of Finding an Outlet, where he covers business and technology.
Featured image via Pexels.