Combining environmental sustainability and business is a procedure that has mystified companies for years. Obstacles like miscommunication between finance and sustainability teams have hindered many companies’ past efforts to comply with green practices. Tying together an effective business plan that incorporates the two requires a lot of planning. Here are a few ways that companies can keep their environmental footprint in check while still turning a fat profit.
Budget With The Environment In Mind
Back in 2004, Johnson and Johnson had a greenhouse gas reduction target that they were unable to meet. That’s when they decided to invest $40 million a year to cut down on emissions. The initial investment was massive, but eventually they cut away a huge chunk of their operating expenses by using solar photovoltaics instead of conventional energy. This also allowed them to predict the returns they would get from such an investment—while funds allocated to regular energy sources tended to fluctuate, solar energy didn’t require any additional investment once the panels were installed.
To date, they’ve reduced greenhouse gas emissions by 138,000 metric tons, saving the equivalent of the electricity consumed by 21,000 US households! And guess what? They still achieved a return of 19% on their investment!
Factoring sustainability costs into the yearly budget can help companies determine expenses and plan out their operations. That way, they won’t have to compromise on income.
Give The Sustainability Officer More Control
Akzo Nobel, a global paints and coating company, decided to give their Chief Sustainability Officer some power over the budget. So every budgetary request exceeding $5 million had to be run by him and the Finance Controller before approval. That way, he could check whether the request complied with the environmental rules laid down by the company. He was allowed to reject requests that lacked an explanation of why sustainability practices were not considered.
These sorts of tactics can be adopted by companies who wish to engage their sustainability teams early on in a new project. It also helps to prevent budget requests that don’t factor in environmental concerns.
Drop Hurdle Rates
Products that are designed to be more friendly to the environment are usually very expensive to create. To tackle this, USP, a company that transports cars and automobiles, eased the minimum return requirement on some of their cars. These machines consumed less fuel and, as a result, cut fuel costs. By doing this, USP stuck to their environmental plans and were able to factor the reduced revenue into their budgets.
By lowering the bar for minimum returns on eco-friendly products, companies can give more importance to their environmental performance, and still allocate funds appropriately.
Include External Processes
When companies draw up a plan for environmental sustainability, they need to take all their dealings into consideration. This means looking at the entire corporate value chain and making sure that it’s aligned with the goals of the firm. For example, Natura asks its suppliers for a sustainability report, to give them a better understanding of Natura’s work culture. This helps the suppliers comprehend how the business, economy, environment, and society are impacted by their actions. That way they can tweak their processes to optimise management systems. Natura checks the environmental impact of the suppliers before choosing one that’s fit for the job.
Host a fundraising event.
All cause-driven programs are excellent for your image and public relations. It feels good to support something that is meaningful and far reaching. Adopt a green cause and do an annual fundraising event. There are all sorts of campaigns you can participate in, from planting trees to raising funds for social causes, for education, for healthcare, Find one that’s close to your heart and involve your employees. Let this be part of employee engagement activity.
Recycle outside the box.
In addition to recycling everything that can be recycled, think green when buying or replacing items. Consider purchasing used or vintage office furniture instead of brand new pieces. You can find great deals on barely used office furniture at both online or off line stores. Need new computers, laptops? Think if a refurbished solution will suffice. Most computers, even older ones will do the job for most of us. Any it comes at a fraction of the cost.
A smooth flow between business and sustainability may seem like a daunting task, but it’s essential. Without it, companies will be unable to satisfy their environmental duties while still earning a sizeable income.