Although each company has their own reasons and motives for being more green and sustainable in business, here are a few of the primary benefits to becoming a more sustainable company.
Enhanced Brand and Increase Competitive Advantage
The Natural Marketing Institute (NMI) has found in their consumer research that knowing a company is mindful of its impact on the environment and society makes consumers 58% more likely to buy their products or services. A subculture called “Cultural Creatives” has been emerging for the past 40 years and is now in the mainstream leading this sustainable revolution. This demographic according to the NMI is roughly estimated at 68 million adult Americans who make purchasing decisions based on their personal, social and environmental values. They find consumers are willing to spend up to 20% more on environmental sound products and services. According to the BBMG Conscious Consumer Report, nearly nine in ten Americans say the words “conscious consumer” describe them well and are more likely to buy from companies that manufacture energy efficient products (90%), promote health and safety benefits (88%), support fair labor and trade practices (87%) and commit to environmentally-friendly practices (87%), if products are of equal quality and price.
Increase Productivity and Reduced Costs
Through development of more sustainable business practices, efficiency in operations will increase. With better use and conservation of resources, operations will be streamlined and costs will decrease.
Improve Financial and Investment Opportunity
Financial and investment analysts have recognized companies who have developed sustainability plans with regards to energy efficiency and reduction of environmental impact as an important evaluator criterion. A Goldman Sachs study revealed that companies in six industries considered leaders in environmental social and governance policies have outperformed the general stock market by 25% with 72% of the companies outperforming their peers since August 2005. Another study based on CFO Research that surveyed 175 top finance executives more than half believe their companies will increase revenue through strong sustainability initiatives.
Minimize Carbon Risk and Improve Energy Efficiency
In Ernst and Young’s 2008 report on ‘The Top 10 Business Risks for Business’ highlight two key business risks; 1.failure to respond and plan for environmental regulations and 2.energy efficiency as important business risks to mitigate. It is estimated that companies will be required to cut 25% of carbon emissions by 2020 and 50-80% by 2050 which will be mandated by both state and federal regulations. This will affect the availability and costs of energy which are expected to double within the next 10 years.
Increase Employee Retention and Recruitment
Employees want to work with companies who are ‘doing the right thing’ and being proactive with corporate environmental and social programs. A 2007 survey by Adecco, an international HR company, found that 52% of employed adults feel their companies should do more about the environment. More importantly, companies want their employees to be loyal and ethical to the organization. According to a Global Study of Business Ethics by the American Management Association, one of the top five internal practices for ensuring an ethical corporate culture is developing corporate social responsibility programs.