Going Green, Making Money and Cutting Costs--Why Sustainability Is Good For Business
TRENTON, New Jersey
July 12, 2012
– In an increasingly environmentally conscious society (and an increasingly environmentally threatened world), the importance of sustainability in business has become self-evident. Yet when I meet with other CEO's interested in green business, the same question always arises: do sustainability initiatives really drive sales? If pressed for a short answer, I would say yes, going green can improve your bottom line – but not only due to sales lifts. There are several other important benefits that warrant consideration.
Given the rising interest in environmental issues, I believe that modern businesses literally cannot afford to disregard the challenges of sustainability. This, however, is a pivotal problem in today's corporate world: viewing sustainability as a challenge rather than as a solution. In a recent EcoFocus Trend Survey, for example, 55% of respondents from the U.S. reported that they try to purchase products packaged in recycled materials; 61% claimed that they try to buy recyclable packaging. Clearly, environmental sustainability has valuable commercial applications.
By going green, businesses can improve their public image, attract more eco-conscious consumers, and make a very positive difference in the world. For example: when my company, TerraCycle, tested a gift-with-purchase promotion for Frito-Lay earlier this year, we included pencil cases upcycled from chip bag packaging. The result? We kept waste out of landfills, Frito-Lay saw a sales lift and TerraCycle was able to promote its business – everybody wins. Sustainability, and CSR in general, creates massive ‘shared-value’ for all stakeholders through cause-related marketing and other efforts that are good for profits, people and the planet.
Although driving consumer interest is crucial, there are other parties to be considered. Going green can give businesses a competitive edge over their peers through successful brand differentiation. It follows logically, then, that other organizations will also favor more reputable business partners. What's more, everyone wants to take pride in their job; I know my employees work with exceptional passion and commitment because they know that they are making a positive difference in the world. Recent studies show that new entrants into the job market are far more interested in working for responsible companies and are even willing to take a smaller salary to work a company that shares their values.
There are various external benefits associated with sustainability initiatives, but going green can also improve businesses internally. We live in an age of information and innovation, both of which are integral to any successful business model. By collecting, analyzing, and even publicizing data on energy usage and efficiency, manufacturers can optimize productivity, cut costs and go green – the push toward more sustainability in business is a positive force for all involved.
So, do sustainability initiatives really drive sales? I believe so, but they also create several other important benefits: they strengthen brand equity, create efficiencies up and down your supply chain, cut production costs, and improve B2B (in addition to B2C) relations – the list goes on and on. Whether you're a small business owner or the CEO of a large-scale company, sustainability is your green light to environmental and economic success. As resources become scarcer, and therefore more expensive, consumers become more educated and aware of the impact of their choices. Businesses with a jump-start on sustainability will be ahead of the competition.