How to run a "greener" business
Many businesses are finding that environmentally sustainable practices are more than the just right thing to do. Learn how you can best implement "greener" initiatives in your business.
As the world becomes more environmentally conscious, more and more business owners are beginning to look at environmental initiatives as necessities rather than passing trends. And while going "greener" is mostly about doing the right thing, you may be surprised to learn that it can also be good for your finances.
"There's a direct correlation between saving energy and saving money," says Stephanie Rico, senior vice president of environmental affairs at Wells Fargo.
ENERGY STAR statistics show that incandescent light bulbs cost about 75 percent less to operate and last ten times longer, energy-efficient food service equipment can save hundreds of dollars in annual energy costs, and qualified exit signs can save up to $10 each. Combined with other initiatives, these savings can be significant.
What's more, the "greener" economy (made up of businesses that operate with renewable resources and low carbon emissions) is growing at 10 times the rate of the general U.S. economy, according to Marcos Cordero, CEO and co-founder of the Green Business Bureau. "Businesses are rapidly going 'green' because they can increase revenue from new sales, decrease costs from operational efficiencies, better engage their workforce, and more effectively manage regulatory risks," says Cordero.
Whether you've already implemented environmental initiatives or are starting from scratch, it's generally a good idea to tackle the "greening" process step by step.
Start with the basics
At its core, going "greener" simply means making changes to your lifestyle or business practices for the safety and benefit of the environment. Often the first measurable changes are the most obvious, so look at the small areas in your business you can change right away. For instance, adjusting thermostats even a little or switching to more-efficient light bulbs can result in immediate cost savings.
It may seem surprising that going "greener" has bottom-line appeal. Most business owners think it will cost money, rather than make money. But even though replacing old, energy-crunching equipment may initially cost you more out of pocket, the benefits of that investment can pay you back in the long run.
Integrate sustainability throughout the business
"A business doesn't necessarily become 'green' overnight by making just a couple of little changes," says Wells Fargo's Rico. "Being a 'green' business is really more about integrating environmental thinking and decision-making into the core business strategy and priorities. Look at your business. Try to decide, what are your major opportunities on the environmental front? What can you influence? And, what are the risks of not going 'greener'?"
Once you've thought about your long-term goals for going "greener," consider the different approaches you could take. For example:
Make a pledge to reduce your warehouse, office or store's greenhouse gas emissions by a certain percentage.
Commit to participating in community service programs such as beach cleanups or educating young entrepreneurs about "greener"-business practices.
Reduce waste. Technology and cloud computing can help with eliminating the use of paper in the workplace. Think about all the ways you use paper, and investigate ways to become more efficient. For instance, consider using online banking to pay bills or opt for receiving online statements. Certain software even allows you to email receipts to customers.
Instituting environmentally sustainable practices can generate ripples of goodwill if your initiatives are authentic, ongoing and widespread.
"If you're thoughtful about what you're doing and demonstrating why it's a benefit – such as cutting out a harmful chemical from your manufacturing, so your product and local ecosystem will be safer, or simply using reusable or compostable cups to help keep your community clean – that can generate positive goodwill and increase engagement from your employees and customers," Rico says.
It's important to incorporate going "greener" into your whole business model. That is, don't treat your environmental initiatives like a marketing campaign with an expiration date.
"You truly have to integrate 'greenness' in all you do, or you run the risk of being called out for what's known as 'greenwashing,'" stresses Rico. Greenwashing is a term to describe a company that uses PR or marketing language to promote their business for being environmentally friendly, when it really isn't. There are many consequences for falsely promoting your business this way, including the loss of credibility.
To avoid greenwashing, be specific when making environmental claims, make sure you consider every aspect of your business that could be "greener," and follow through with those initiatives before labeling yourself a "greener" business.
Involve your staff
This isn't just a job for top management. Rico suggests it's good to get employees involved. "Management can set broad goals and make investments in energy-efficient equipment, but you still need people to close the refrigerator door, use the proper recycling bins, turn off their computers at night, and so forth."
By involving your employees, you may find they have valuable suggestions or ideas to contribute. "Because they're on the ground, so to speak, employees can see at the local level where some problems are and how improvements can be made," Rico says.
Track your success
To maximize your "greener" potential, it's crucial to set specific and measurable goals and track your progress. "First assess your opportunities and put together a plan, then measure how well you're doing," Rico says. "It depends on how you're tracking progress, but you have to measure it somehow or you won't be able to see the changes and make adjustments as you go."
It's also important to remember that the job is never truly done and environmental consciousness is a never-ending process. You want to keep an open mind and stay vigilant for new and better ways to incorporate environmental initiatives in your business.
"Over time, businesses in general are moving in a 'greener' direction," Rico says. "The ones who are being proactive about it are better positioning themselves for the future."
For more information and resources, check out the Small Business Administration's (SBA) Green Business Guide.