Whenever I work with an organisation on improving their environmental performance there are always a few people in the company who bring a good dose of scepticism about the merits of going green. I really like these people as they tend to be the ones that become the biggest green advocates as initiatives are implemented and benefits demonstrated.
There are four and a half reasons why it makes perfect sense for an organisation to go green. Here I discuss each and then set out some of the key principles that companies need to consider before beginning their green journey.
Why go green?
1. Identify energy and resource inefficiencies:
For many organisations I work with, energy has gone from being about 1% of operational cost to upwards of 5%. This can be a significant cost! Taking environmental action to identify energy and resource inefficiencies can save loads of money and help your bottom line. The beauty about energy and resource efficiency is that it makes great economic sense and can be measured. Investments in energy efficient lighting and equipment can be assessed against payback periods and savings accumulate year-on-year
2. Win and retain business:
Research shows that your environmental credentials can count as much as 20% in a formal tender situation. In fact recent findings from Core Communications found that 71% of consumers consider the environment when they shop, up from 66% in 2008. The same trend is true of B2B companies that want to do business with companies that invest in a greener, fairer future.
Being able to demonstrate your environmental performance should be seen as a unique selling point. Selling your green credentials to new customers either in a tender or in your sales pitches may provide the additional ammunition you need to close that sale. Word of warning though – If you are thinking about marketing your green credentials then beware of greenwash. You don’t want to risk undermining your green message by making statements that are untrue
3. Engage stakeholders:
Taking green action is a great way to engage your stakeholders, especially staff. Most people want to do business with, or work for, an organisation that is ethical. This is true for the biggest organisations as well as for smaller companies. Green business action engages stakeholders in a positive way that can only reflect well on perceptions inside and outside your organisation
4. Manage and mitigate risks:
Many organisations start to green their performance due to external pressures from government and regulatory bodies. These pressures have grown in prevalence over the past decade or so due to an increased awareness of businesses role in addressing environmental / climate change concerns. Being ahead of the curve can help you manage regulatory risks that may be on the horizon for your company or mitigate competitive risks. Why let your competitors get there before you?
4.5 It’s the right thing to do
Finally, being ethical and reducing ones impact on the environment is the right thing to do. This is true for individuals and it is true for organisations as well. Of course organisations are constrained by economic realities such as cash flow and profitability. The costs and benefits of environmental action will always need to be weighed up against the impact on an organisations performance
Benefiting from going green and striking the right balance
As outlined above, going green can be extremely beneficial. So why is there so much scepticism around green initiatives?
The reason is because most companies execute initiatives poorly. In most cases organisations try to cut corners, run before they can walk or fail to take people along the journey. Worst case scenarios occur when companies pay lip service to appease staff and customers but never actually commit to taking tangible action that delivers results. In these cases going green can be a complete waste of time and money.
To avoid these shortfalls organisations need to strike the right balance in terms of investment and commitment to green initiatives. Like most business decisions, this requires strategic thinking.
The first step is to implement a well thought out environmental policy that sets your green strategic direction. From there organisations should start small with low cost actions that are highly visible, like recycling. Senior leadership in driving actions through is key, as is delegated responsibility and performance measurement of those tasked to deliver outcomes.
As successes are demonstrated they should be recognised and communicated throughout the organisation. Actions can then be scaled to include initiatives that cost more but have clear and proven paybacks. For example, the implementation of energy efficient lighting or building energy management systems that deliver carbon and cost savings.
It is important to remember that going green is more of a marathon than a sprint. The benefits accumulate over time and the journey to improved environmental performance is one that pays dividends in the long term.