Contrary to what many top-level executives and shareholders may believe about the cost of “going green,” implementing sustainable innovation projects can increase profit in a number of ways: saving money by innovating ineffective and wasteful business practices, attracting the growing population of environmentally-concerned consumers, and avoiding steep regulatory penalties.

Example: “According to city council data published by Curbed, buildings produce an incredible 71% of New York’s greenhouse gas emissions.” In an effort to slow climate change, governmental bodies around the world are implementing regulations that come with high penalty costs for companies that fail to comply. Some industry giants are taking steps towards being environmentally-friendly, and these changes are leading to considerable savings. Despite the seemingly obvious benefits of “going green,” some companies have been slow to make such changes due to a misconception that it costs more to be environmentally-friendly. The up-front costs can be intimidating, especially for companies with more traditional leadership, but they can lead to long-term benefits for both the business and the planet.

Why Going Green Is More Profitable

Sustainability initiatives and profit are not mutually exclusive. By innovating outdated business practices and adopting more efficient, environmentally-friendly practices, businesses can cut costs on things like materials, fuel, transportation and utilities to improve their bottom line. Technology is your friend! There have been huge advances in technology that can benefit the cost-effectiveness of your business. Evaluate your company’s biggest costs to figure out where there is room for improvement. Example: Lagunitas: The brewer brought a new type of treatment system onsite that cleans the 7 gallons of high-strength wastewater made with every gallon of beer. The methane byproduct is used to produce electricity. They save more than $1 million per year on utility costs Another example: Walmart: introduction of technology that reduces energy use when trucks are idling and software that creates more efficient routes can improve fuel efficiency by 90% and reduce carbon dioxide emissions. While driven internally by profit, the public-facing image is one of altruism. Make no mistake, big corporations understand what consumers expect. More savings equals more profit, keeping shareholders happy while connecting with modern consumer expectations — and doing the right thing.

Consumer Relations

There is a massive cultural shift happening, as the information age and rise of social media are pulling back the curtain on the core causes of much of society’s problems. Climate change is the single greatest threat to our collective wellbeing in history. Climate change is something that affects everybody. Consumers are concerned about the fate of the world, and their spending habits reflect that. Consumers, especially Gen Z, understand the buying power that they possess and are more likely to support businesses that they view as helping to address the climate crisis as opposed to contributing to it. Similarly, they are more likely to vocally boycott brands that refuse to go green. One of the strongest forms of consumer activism is voting with your dollar — for many companies driven by stakeholder profit, the decision is clear: people want to see brands adopt sustainable practices and encourage other businesses to do the same. Informed consumers demand better — companies must choose to either adopt future-forward policies… or perish.

Government Relations, Regulatory Pressure, And Tax Incentives

Citizens are placing pressure on the government to do more to hold corporations accountable for the harm they have done to the environment. Governments around the world are listening, in the form of regulatory penalties/tax incentives for companies with “green” practices. We expect to see major changes as the incoming administration turns national governmental focus toward tackling the climate crisis, one of the top four priorities of the Biden/Harris presidency. Regulations will shape the future of business practices. Might as well get ahead of it, before it’s too late. As many governments push toward net-zero carbon emissions by 2050, it’s important to remember that many options for offsetting carbon production exist. It is already possible to embrace carbon-negative practices. If all else fails, the government rewards businesses that make environmentally-friendly improvements in the form of Tax Incentives. For corporations whose stockholders are solely driven by monetary gain, that’s an easy way to win the base over while implementing internal changes.

Quick Ways For A Business To Go Green

Offsetting initiatives that make a company carbon neutral (or even negative), can act as a transition while embracing environmentally friendly practices toward a more circular economy. Planting trees is cheap, by the project, and a controllable expense for a business that can make a huge impact in the long run. Tree-planting initiatives are engaging for employees, benefit the environment, and benefit public image. Embrace alternative packaging, like biodegradable bioplastics, compostable materials, soy- and vegetable-based inks, etc. Plan for sustainability — how will your company function in a post-single-use plastics world? What sustainable alternatives can you work toward as a standard? Lead by example, instead of waiting until regulations force change. De-incentivize eating unsustainable foods (i.e. when WeWork stopped reimbursing employees for non-vegetarian meals)

Conclusion

The environment is changing, the world is changing, consumers are changing. It’s good business sense to adapt to these cultural and governmental pressures because they aren’t going anywhere.