In today’s increasingly competitive landscape, more and more companies are realising that being sustainable is more than an environmental gesture—it makes long-term economic sense.
Here are the top 10 reasons companies should care about sustainability:
1. Cost Savings. “Sustainability is first about improving the bottom line,” says Emily Reyna, a project manager for the Environmental defence Fund’s Corporate Partnerships Program.
Reyna works with EDF Climate Corps, a program that places MBA and MPA students in companies, including McDonald’s, Verizon and Target, to “build the business case for energy efficiency” by identifying ways to slash electricity and gas use.
Since 2008, fellows have uncovered energy efficiency opportunities — from changing light bulbs to replacing old computers — that would save $1 billion in net operational costs over project lifetimes.
2. Consumer demand. Being green not only saves money, it also creates new revenue by attracting customers who care about a company’s environmental footprint.
3. Risk mitigation. “With energy costs rising and uncertainty in supply, it is important that companies start re-thinking how they obtain and use inputs,” says Reyna.
4. Leadership. Traditionally, companies adopted sustainability strategies in order to comply with government regulations and avoid fines. Now leading-edge corporations are embracing the concept of sustainability in order to be a part of the conversation on environmental policy, says Eliot Metzger, a senior associate at the World Resources Institute.
5. Tax incentives. According to Area Development, federal, state, and local governments offer a range of financial incentives for undertaking environmentally-responsible activities. These include investment-, production-, or consumption-based income tax credit, accelerated depreciation for certain capital expenses, exemptions from state or local sales taxes, and cash grants.
6. Employee retention. “Working for a bigger cause excites employees,” says Metzger. “It’s one of the softer measures to wrap your head around, but if you talk to someone where sustainability is embedded into the corporate culture, it’s a selling-point to attract and retain workers.”
7. Brand reputation and publicity. Fostering positive consumer relations through sustainable initiatives generates brand value and improves a company’s image.
8. Resource limitations. Natural resources like fossil fuels and water are finite. As scarcity increases, cost also increases. “At some point the resources with which we depend upon will be more expensive or we won’t be able to get it, says Reyna. “So companies need to be prepared to protect those resources so they will be plentiful or find alternate resources for their products and services. The winning companies will do both.”
9. Keeping up with the competition. A 2011 survey of nearly 3,000 global executives by MIT Sloan Management Review found that about two-thirds of respondents believed sustainability was necessary to being competitive in today’s market.
10. New revenue opportunities. “Companies like DuPont, Nike and IBM are looking ahead to see how natural resources, climate change, and energy can drive innovation and inspire new business models, products and services,” said Metzger. “These are the factors that are going to determine future winners and losers in the marketplace.”
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