Eight Business-Critical Reasons for Going Green

by Peter Forint, BA, MBA

Do your eyes role when someone suggests that your company go green? Is that because you think that person doesn't have a clue about running a profitable business in today's hypercompetitive world?

If that's the case, you should consider these 8 business-critical reasons to adopt an environment-friendly strategy:

1. Corporate Customers Are Demanding It: Global 2000 companies are realizing the benefits of adopting sustainable strategies and are demanding that their upstream suppliers follow suit. For example Wal-Mart has already forced its suppliers to reduce packaging.  This cuts down environmental waste (landfill and carbon emissions), and saves them millions in annual transportation costs.

2. Retail Customers Are Demanding It: It used to be that the greenies were a "fringe niche of granola eating tree huggers", but they have now evolved and grown into a highly desirable marketing segment known as Lifestyles of Health and Sustainability (LOHAS). They have higher than average incomes and are willing to pay premium prices for green products/services.

But it is not just this niche that is interested in green products and services; mainstream consumers are also becoming more aware of environmental issues and are increasingly choosing green products/services when offered.

3. Investors Are Demanding It: Understanding the various strengths and weaknesses of companies and the potential opportunities and threats to whole industries are critical for investment success. Thus, publicly traded companies are being monitored for their contributions and exposures to global climate change by the Carbon Disclosure Project, www.cdproject.net, a group representing over 475 institutional investors with $55 trillion in assets under management. Large and small companies that fail to adopt environmental imperatives will find it harder to secure capital, whether through debt or equity.

4. NGOs Are Demanding It: Companies that appear to lack "Corporate Social Responsibility" in their strategic planning and operations, are often targeted by Non-Government Organizations, attract negative publicity and suffer decreased sales as a consequence.

5. Employees Are Demanding It: Potential and current employees want to be engaged in meaningful work, and this is especially true with younger generations. As the current baby boomers retire, competition for labour will grow and companies that do not adopt environmental imperatives may lock themselves out of the talent race.

6. Regulatory Compliance: Environmental legislation is growing year by year. Ensuring that you meet all legislative requirements regarding the environment will help you avoid the costs of litigation, court ordered fines and restorative actions.

For example, staring January 1, 2010, Ontario businesses emitting more that 25,000 tonnes of CO2 per year are required to track and report under new Greenhouse Gas Reporting Regulations. (That would be the largest 300 or so manufacturing facilities in the province.) Companies emitting between 10,000 and 25,000 tonnes are asked to voluntarily report ahead of when Canadian regulations catch up and synchronize with the American Clean Energy and Security Act. Plus, do you want to give the Americans another reason to exclude you from their markets by not aligning with their requirements?

7. Create Cost Savings by Eliminating Waste: Many companies throw away their money through obsolete technology and processes that waste materials, energy, and water, stealing away their profits.  Consider having a sustainability assessment done on your company to see where you can save money and go green.

8.  Improve Cash Flow & ROI:  Eliminating waste can free up cash flow and improve financial results by reducing your operating costs.  Doing so might even get you that line of credit or loan that your banker has been denying you.  Your insurance costs may also be reduced.

9. BONUS REASON: It's the right thing to do. Leave a positive legacy for your children and grandchildren!

I believe that every business needs to go green to compete and succeed in today's economy.  To learn where to start, give me a call...

Peter Forint is Regional Vice-President with Wardell Professional Development, a business coaching and consulting organization serving owner-managed and family run businesses. Email: peter.forint@wardell.biz, GTA: 416-290-5718, Toll Free: 877-290-5718.

Next Article: Network to Grow Your Business, by Mark Wardell, President and Founder of Wardell Professional Development.