While there is little argument that eco-friendliness should become a driving principle for all businesses in the near future, considering the high investments costs and seemingly scarce short-term benefits can make some business owners balk. Add to that a political tide that seems to be turning against sustainability, and it is understandable that many business stakeholders are uneasy with the prospect of going green now.
The analytical cliche: “the most important thing is the bottom line,” is likely the first thought that comes to mind when making this kind of decision. If a business doesn’t make money, it can’t stay in business. The bottom line is as important as its ethical impact when considering the future of a company.
This very reason is why every business needs to go green now. Contrary to popular belief, in today’s economy, “sustainable” equals a better bottom line. Why?
Despite a chill to climate change, there are still millions of dollars in tax credits available to businesses that invest in green-initiatives. Most are artifacts of the 2009 economic stimulus plan, which provided incentives in the form of tax credits for companies to go green, enhancing their bottom lines by investing in the environment. At the time, credits were made available to companies that utilized environmentally friendly business practices; like switching to renewable energy sources (solar or wind power) or using electric vehicles for their transportation fleets. Most of these credits are still available to businesses.
Two of the best:
Up to 30% of cost tax credit for switching to sustainable power sources
A $1.80/ sq ft credit for buildings built or renovated to be energy efficient
There are still dozens of tax credits available like these, and businesses with sustainability on their minds would do well to pounce on them now, before they go away.(1) Many states, like California, also provide generous tax subsidies to green initiatives, over and above federal credits, meaning higher profit via a lower tax liability.
Aside from reducing your business’s tax burden, going green now will also slash your operation costs. As Emily Reyna, project manager for the Environmental Defense Fund, asserts, “sustainability is first about improving the bottom line.”(2) Unilever is a shining example of this. By first reducing their environmental footprint and then adding ingredients that are better for the planet into all of their products, they saw higher margins and their sustainable product line is now a multi-billion dollar business.
To replicate this success, businesses can:
- Eliminate almost all electricity costs by switching to solar panels (and get a tax credit)
- Reduce gas expenses by switching the corporate fleet to hybrid vehicles (and get another tax credit)
- Spend less on waste processing by training employees to use resources more efficiently (Dr. Bronner’s is a great example of this in the upcoming book about Climate Action Teams!)
On a purely statistical cost:benefit analysis, going green wins out completely. While most businesses will need to start small – first by taking advantage of low hanging fruit such as switching off lights and processing waste better – they will see that sustainability saves money at every step. Next week we will look at the soft benefits sustainability brings to the table.