The Business Benefits Of Going Green
As business owners and leaders, we would all like to think we have the best interests of the community and the planet top of mind when it comes to the important decisions we make and their implications for the wider community.
But, when it comes to costing us more money, or impacting our profits or revenues, sometimes those best interests have a habit of quietly exiting through the window.
The sad reality is, there has to be a business case and ideally, a potential return on investment for businesses to ‘go green’ or decarbonise their business, because ultimately it is going to cost some time and money for businesses that want to reduce their carbon footprint.
Though let’s be clear, investments businesses make now will likely pale in comparison to the investments they might have to make in the future, should some of the greatest risks of climate change take place.
Let’s hope they don’t eventuate, and don’t despair because there’s lots of good climate change initiatives popping up lately, but it is wise and pertinent to explore the business case for going green and investing in carbon neutrality.
1. Attract A Whole New Demographic Of Consumers
It is now undeniable that consumers want to support businesses making an effort to be ‘greener’ and help stop climate change. Numerous studies and articles have been published in recent years highlighting this long-term consumer trend, so let’s look at the data behind this and review some of the most impactful ones.
‘66% of all consumers and 75% of millennials want more sustainable brands and packaging’
According to Business News Daily, citing a 2023 report from leading global consulting firm, McKinsey & Co, at least two thirds of consumers are showing preference to brands that are more sustainable and genuinely care about the environment.
2. Reduce Operational Costs
Hands up who enjoys paying their energy bills?
We didn’t think so.
Reducing your carbon footprint might even save you money, particularly if you own a commercial property or have a long-term lease on a building with access to rooftop space.
‘Some companies have seen an 89% reduction in their power bills by installing solar’
The rooftop of commercial and industrial buildings are perfect locations for installing solar, and can result in an up to 75 per cent reduction in energy bills.
Furthermore, businesses can install LED lighting in their offices, which will decrease energy usage and things like Smart Meters, which monitor power usage and can alter usage patterns.
In countries such as Australia, there are lots of government incentives for installing solar and LEDs.
3. Improve Staff Retention & Recruiting
It’s a much easier sell for businesses attempting to recruit new staff if your business is trying to do some good in the world and help stop climate change.
It’s also much easier to retain staff.
‘Two thirds of employees would be more likely to work for a company with robust environmental policies’
A recent report from Forbes, citing a report from intranet company Unily, stated that 83% of employees feel that companies aren’t doing enough about climate change, and a whopping two thirds would be more likely to work for a company with robust environmental policies.
Businesses everywhere are complaining about the skills shortage, so perhaps its time to show you are motivated by more than just money to win the cream of the crop when it comes to talent.
4. Reduce Supply Chain Costs
Once you begin the path to reducing carbon emissions in your businesses, you’ll quickly learn that Scope 3 is the area of your business causing the most emissions. This is typical across all businesses.
Given the size of Scope 3 emissions, it represents the largest opportunity to reduce emissions.
Another thing you’ll quickly learn once you begin reducing and offsetting your greenhouse gas emissions, is that it becomes much better and will cost you less to do business with other companies that are carbon neutral or low emissions, because this will reduce your Scope 3 emissions, and ultimately, the number of offsets you may need to purchase.
“The economic forces built into the carbon credit system will force businesses to seek out other green suppliers to do business with”
By the same token, if you are a carbon neutral business, you become more valuable to other companies that you supply goods or services to, because it means less Scope 3 emissions for all your clients.
This is the genius of the Kyoto Protocol and the carbon credit system. Despite its troubles, if and when it is made mandatory for businesses, the economic forces built into the system will force businesses to seek out other green suppliers to do business with.
5. Increase Conversion Rates
Are you selling online? There is a very good chance you can increase conversion rates just by showing off your carbon neutral status and enabling consumers to offset emissions at the checkout, which can further offset emissions.
Carbondash has seen increased conversions in the 10-20% range with it’s carbon neutral checkout widget built specifically for Woocommerce, called Climate Cart.
If you are trading online, you can download the Climate Cart plugin now, and have customers offsetting emissions within minutes.
This increase in conversion is backed up by other companies are seeing similar results.
As Australian buy-now-pay-later company, Zip, shows, online nutrition retailer Nuzest increased cart conversion by 22% and apparel brand Tribe Kelley saw their cart conversion increase 19% when they added carbon neutral options at checkout. They also had nothing but positive feedback from their customers.
This increase in shopping cart conversion is largely driven by the 70% of millennials that say a company’s environmental focus does influence their purchase decisions.
“Online nutrition retailer Nuzest increased cart conversion by 22%”
So in summary, there are a tremendous amount of benefits for any business that is considering reducing their carbon footprint and working towards protecting the environment.
The first step on that journey is finding the right carbon footprint calculator software that will make the process of measuring and reducing emissions easy, and helps your businesses capture some of these business benefits of being carbon neutral as described above.
Carbon Dash is here to help when you cross that bridge.
If you’re a business wanting to reduce carbon emissions, Carbon Dash offers a user-friendly carbon accounting solution. Click here to learn more.