Benefits of Going Green
- Dave Craft
- Oct 25, 2023
- 8 min read
Updated: May 30, 2024
At a time when SMEs need to concentrate more than ever on generating revenue, finding time and resources to improve sustainability can carry limited appeal. But there are some significant commercial payoffs to establishing a solid environmental strategy.
The two biggest factors are cost saving, and the other is sales because whether we like it or not, buyers increasingly want to see green credentials, and it applies to B2B and consumer markets. According to the most recent Amazon Business State of Procurement Report, 69 per cent of B2B buyers work at organisations that insist on suppliers having demonstrable sustainable practices. Similarly, the Future of Marketing study found that 72 percent of business buyers are more likely to buy from socially responsible companies, with 48 per cent saying they are ‘much’ more likely to buy from them. These are telling numbers, and there is plenty of other reports that says more or less the same thing.
Consumer sentiment relating to spending and the environment is more fragmented, and depends on price and to some degree on product category, ingredients or components, place of origin and recyclability of packaging. However, studies say that between four and eight per cent of consumers do not take environment into consideration when making purchasing decisions, while at least 61 per cent are either concerned or very concerned about it. And all reports indicate that climate change is a growing factor in consumer spending.
The result of sustainability becoming such an important purchasing criteria, is that in realistic business terms, it can be considered as much about being competitive positioning as it is about protecting the planet. Those that can demonstrate that they have real commitment to it have a commercial advantage.
Even for businesses in the early stages of a sustainability journey, the authentic pursuit of such credentials holds value when genuine progress is being made. Being able to point to consistent steps forward translates as an effective commercial attribute when presented correctly.
What is more widely understood are the risks associated with making exaggerated claims about sustainability, and the line between enthusiasm in promoting good practice, and spilling over into unearned positioning. The public in particular, has a finely tuned antennae when it comes to assessing climate change claims, and there is a long road back for those perceived to have gone too far.
In addition, adjudication bodies such as the Advertising Standards Authority (ASA) hold greenwashers to account, and often add further humiliation and fines on top of damaging condemnation in mainstream and social media. A good example was the mauling of Innocent Drinks, a brand that portrays itself as on the side of everything that is good. It claimed unsupported green credentials, and is owned by Coca Cola, one of the biggest plastics polluters in the World. The ASA banned Innocent advertising as misleading.
The greenwash labelling of real offenders should not deter the honest from maximising the commercial returns from declaring progress with carbon reduction. Actions and results should be treated as a company selling point. They should be a key element of sales and marketing messaging, easy for outsiders to find, and ideally publicised through an in house or appointed public relations and social media consultancy.
Making savings
Saving money is where the most direct commercial gains can be made through sustainability, and there are major quick rewards when first starting on the journey. Saving on lighting, heating and water is nearly always possible through simple initiatives like fitting LED lights, turning lights off when not needed, cutting back on the use of paper, and not leaving machines plugged in on standby.
On their own, small actions may seem fairly trivial, but they all make a difference. The rule of ‘marginal gains’ dictates that minor changes add up to significant results. Something as simple as putting a note on an office printer saying,’ Do you really need to print that?’ has been shown to save more than £500 a year in paper and ink costs. Going as paper free as possible makes an even more radical difference. This can include double sided printing, proof reading before printing, only printing in black rather than colour whenever possible, and scanning documents to circulate emailed copies rather than distributing paper copies all make a difference.
In this situation, engaging employees on cutting carbon is important. Better still, is asking them to put forward ideas. They know some aspects of company function better than anyone else, and therefore have unique insights on what might be achieved. A suggestions box with an incentive for the best ideas often works well.
It may also be helpful to put posters in appropriate workplaces places to remind and motivate employees on what can be done to reduce carbon. Below are links to sites offering free posters on sustainability subjects. Ironically, after what has been covered in previous paragraphs, they have to be printed, but short term harm may lead to longer term good.
Saving On Water
Installing toilet cistern reduction devices is easy. This is a technical description for something as simple as putting a brick in a toilet cistern to reduce water use in flushing. But it is possible to buy something cheaply that is made for purpose, and can be obtained via this link https://nwl.watersavingkit.com/product/cistern-displacement-device/
Tap aerators are another good idea. These devices are cheap, and can save 60 per cent of water by mixing air with water flow. There little noticeable reduction in water pressure, and worth looking into. Aerators can cost very little bought online through kitchen and bathroom supply companies https://www.hartplumbingspares.co.uk/category/tap-spares/tap-aerators/
Internal leaks in toilets are common, and cost money. They are identified by a constant humming sounds and water movement in the toilet. It is caused by the refill valve not closing correctly, and often can often go unchecked for years wasting hundreds of gallons of water.
It is possible to take a DIY approach to fixing toilet leaks. There is a useful guide via this link https://www.checkatrade.com/blog/expert-advice/leaking-toilets/ However, this approach should be undertaken only with prior experience, and it is often best to call in a plumber that may also identify other problems.
For those that can, collecting rainwater that falls on office roofs is another option. Similar to rainwater butts for gardeners, it is possible to store water in tanks for washing or purposes other than drinking. For detailed information please use this link https://www.aquaswitch.co.uk/commercial-rainwater-harvesting/
Cutting Energy Costs
Reducing carbon profile alongside the potential of cutting gas and electric bills is usually easy. A quick search of relevant price comparison sites normally produces savings when switching to green energy. Big Clean Switch is a useful starting point https://bigcleanswitch.org/business/ along with Green Energy Switch https://www.greenenergyswitch.co.uk/business-energy/ A list of the top rated green energy companies can be found here https://www.energy-review.co.uk/guides/best-green-energy-suppliers/
For some companies, energy management software is a consideration. It can make a difference to the bills and emissions of bigger SMEs, and those that use a lot of energy through the nature of what they do. Leading programmes such as Energis Cloud https://energis.cloud/en/ , Clear VUE Business https://clearvue.business , Facilio https://go.facilio.com and MRI Energy https://info-emea.mrisoftware.com , all offer savings opportunities through informed control of energy usage. But the reality is that such software is not needed by the majority of SME sized non manufacturing organisations that can do just as well with a tick box DIY approach of actions, such as installing LEDs, and making sure lights and electronics are switched off when not in use.
Supply Chain Savings
There are often savings to be found in supply chain procurement. There is a specific guide to this subject in another section of the website.
Transport
Like so many aspects of business, transport is unique to every company, and there are multiple variables involved. With the cost of fuel being so high for so long, most SMEs nailed down the best way to make savings on it, and journey frequencies, a long time ago.
One travel option that is constantly changing, and worth reviewing from time to time is electric vehicles (EVs). Battery distances are getting better, they charge quicker, and there are more public charging points. This makes EVs a more realistic proposition for some. For others there is still some way to go before EVs are up to the job, which means hybrids are often the emission and costing saving answer.
However, EVs for staff can be another matter, and the cost to companies is almost nothing for enabling employees to lease company electric cars. As a salary sacrifice exercise it can make a lot of sense. Income tax is not paid on deductions for monthly car payments, and employees make major savings in other ways, plus of course carbon produced from business journeys and commuting is cut radically.
The depreciation and running costs for fossil fuel cars bought at a price of between £16,000 and £22,000 can be higher than £10,000 a year, plus any finance used to buy a car. A full 55 litre tank of fuel costs in the region of £85, but by contrast a battery charge cost less than £20. Employees can cash in their old cars for a new EV with a starting price of £200 a month, with makes such as VW being available for £350. EV leasing can be an attractive option. It has been conclusively shown to help attract and retain the best employee talent.
There are plenty of EV car leasing companies, and the better ones will save time by doing all the administration and tax paperwork. They include Trywre and Octopus. https://www.trywyre.com/purchase-vehicles and Drive Electric https://www.drive-electric.co.uk
Finance
Finance has become an area of business that increasingly comes with a need for green credentials. Commercial lenders frequently want to see evidence of good environmental practice before they are prepared to consider investment. There will come a time when it will not be possible to obtain business finance without an appropriate environmental strategy, including money for start-ups.
A key factor of business investment that was identified in qualitative research conducted on behalf of city investment legal specialists Taylor Vinters, is that a growing number of investors now consider environmental practice as a relevant proxy indicator of long term value. In other words, carbon reduction programmes have commercial value.
In essence the business finance sector increasingly sees a lack of green credentials as a signifier of risk. Therefore, if investment is required then the presence of a robust environmental strategy is likely to be an enabler in getting the money needed. Absence is increasingly likely to be a sticking point.
Recruitment and staff retention
For smaller businesses, adopting positive sustainability practice enables recruitment of the best talent. Research by McKinsey and many other surveys have found that the better the company carbon reduction programme, the more the best talent is attracted. A survey by Randstad of a sample of 35,000 employees found nearly half of Millennials and Gen Zs will not take a job unless the employer matches their social and environmental values.
The same applies in terms of employee retention. Many of those that decided to leave companies during the Great Resignation say that it was due to not being able to find common values with their employer, including the approach to climate change.
Being able to attract and keep the best employees at a time when there is a skills shortage, means adopting good environmental practice as a positive HR initiative. There is a dedicated guide to this on the website accessible through this link – over to you again Dave.
Next steps
The simple truism is that forging a path towards greater sustainability saves money and provides commercial advantage. It does demand some additional investment, but equally there are quick wins. And progress can be implemented on a modular basis as other considerations allow.
Changing the carbon profile of an SME does not have to be rushed. Rather, the key to success is consistency. A journey of a thousand miles begins with the first step, and there is no need to sprint the whole way.