3 Ways Your Business Can Make Sustainability Profitable
Sustainability within a business is often viewed as a luxury investment or a public relations ploy, but growing data suggests that sustainability activities can lead to increased profitability and increased business prospects.
Today’s entrepreneurs and business executives are often the most aware of the enormous influence that businesses have on society. As well as the urgent need to step up and make a change for our earth.
For both the environment and your company’s bottom line, adopting a more sustainable approach is essential. Here’s how you can help both the environment and your wallet at the same time:
How Is Sustainability Profitable For Business?
With almost everyone making major moves toward sustainability, even the major oil companies, it’s critical to not let your business fall behind. It’s not always an easy process, but it’s worth the effort because being sustainable and ethical puts your business on the right side of history. If you need more convincing, becoming more sustainable can have monetary benefits, too.
Consumers Are Willing To Pay Premium Pricing For Sustainability
According to major research of over 10,000 people from 17 countries, sustainability is becoming an increasingly crucial factor in customers’ purchase decisions. There is a substantial global paradigm shift in consumer perceptions of sustainability, as well as a move towards willingness to pay more for environmentally friendly products and services, according to Simon-Kucher & Partners’ Global Sustainability Study. As the world becomes more sustainable, this shift provides opportunities for all companies.
More than 85% of the world’s population has changed their buying habits over the last five years to be more environmentally friendly. 60% also take sustainability to be an important consideration when making a purchase. Those ready to pay extra for sustainable products or services would accept a 25% premium on average.
“Those ready to pay extra for sustainable products or services would accept a 25% premium on average.
Showcasing your environmentally friendly practices can help you stand out from the crowd and bring in new customers who are looking to support a company that is committed to protecting the environment.
On top of this premium pricing, it has been found that S&P 500 organisations, showing that they are managing and planning for climate change experience, have an 18% higher ROI than those who don’t integrate sustainability into their strategy.
Start by working with your network to ensure that sustainable practices are taking place up and down the supply chain. Consider the eco-design of your product and the environmental implications it has throughout its lifecycle, and then take steps to reduce the most significant of these impacts. If you’re a service-based organisation, ensure that you have rigorous internal sustainability policies in place. Shout about your sustainability practices across your website and marketing materials and showcase your actions, adding more value to your products and services in the consumer’s eyes.
Being Net Zero Reduces Energy Costs
A vital step in becoming a net zero company is switching to green energy, with 76.2% of greenhouse gas emissions in the UK coming from the use of fossil fuels, and if you’re looking for ways to cut costs, you’ll find sustainable practices and cost-cutting strategies frequently go hand in hand.
The fewer resources your organisation uses, the more sustainable it becomes. Businesses have to rethink how they get their resources as energy costs continue to rise. According to McKinsey, a sustainability strategy can drastically reduce operational expenses by up to 60% compared to conventional approaches.
Switching to a renewable energy source allows business owners to lessen their dependence on the grid and create their own electricity. Therefore, they save money on their energy bills, as well as staying away from volatile fossil fuel prices.
An excellent example of how renewable energy is becoming more cost-effective is BESS, or Battery Energy Storage Systems. These battery solutions allow businesses to store the solar energy they produce during the day and use it in the evening when grid power is most expensive.
Switching to renewable energy as a business is simple. Smaller energy providers are popping up all over the UK to help fill perceived gaps in the market. To help you reduce your carbon footprint and become more energy efficient, there are also small business grants and schemes available.
Green Tax Breaks For Companies Taking Climate Action
Over 60 FTSE 100 firms in the UK have signed up for the United Nations’ Race to Zero initiative, showing their commitment to becoming green and combating climate change.
If you can show that you’re serious about being green, you’ll likely see an increase in your company’s income. Consumers are eager to pay more for environmentally friendly brands, as previously mentioned.
Many businesses have regulations limiting who they do business with and will give preference to suppliers that are dedicated to net zero, meaning that B2B companies can also benefit from going green. That goes double for large corporations with centralised purchasing practices and public environmental obligations.
In order to lower the carbon footprint of their supply chain and cut emissions, multinationals and larger companies have long-term policies in place as well. As an example, many companies are seeking environmentally friendly ways to deliver their products, and some supermarkets will refuse to do business with suppliers who have a bad environmental track record.
When evaluating bids, public sector organisations must evaluate the environmental credentials of their suppliers. Be aware of this if your company deals with large corporations or has plans to do so in the future.
The government has also declared that businesses should strive toward net zero now and be able to present a “clear and credible carbon reduction plan” to be in place by 2050 if they want to compete for any future government contracts worth more than £5 million.
Green tax breaks are easy to apply for. To learn more about these environmental tax reliefs and other schemes for businesses, such as the Climate Change Levy and Emission trading, you can browse the government’s website.
At its core, being sustainable is the right thing to do. Considering the current climate crisis, companies must be more responsive to a world where rising sea levels and more frequent hurricanes are a fact of life, but businesses have a once-in-a-generation chance to help prevent further disasters and the ensuing economic collapse.
Sustainability is here to stay, and companies that accept this simple reality will reap immediate benefits.
If you’re looking to take action to become a net zero business, then book your free call with one of netXero‘s sustainability experts today. In just 30 minutes, you’ll get a score based on your carbon emissions and a personalised roadmap to show you how to comply with climate legislation and profit from sustainability.
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