Why Going Green Can Make Your Business More Profitable
Why going green can make your business more profitable? Going green led to Apple generating 100% of energy from solar panels in its campus and UPS saving an estimated $85m per year by optimizing its delivery. Cost reduction aside, going green also attracts customers and talents since a survey reported 52% of people being more eco-friendly than 6 months ago, supporting businesses that care about social responsibility.
Global Insights Pulse Survey reported that 52% of the 9,370 people from 26 countries said they are more eco-friendly than they were 6 months ago, a 2% rise in percentage points since the June 2021 Pulse Survey.
As environmental sustainability gains global traction, consumers and investors are now more conscious about a product’s origins and its company’s business practices than ever. Unlike in the past, price is no longer the only motivation when it comes to “adding to cart”.
Businesses have benefited from going green.
TNW reported on how companies like Apple are cutting huge energy costs thanks to their use of solar panels, and UPS saves an estimated $85 million per year that their delivery trucks’ machine learning system saved.
At a roundtable featured on The Business Times, the CEO of China Everbright Water, CapitaLand Mall Trust Management, and City Developments shared how their organisations continue to reap the benefits of promoting sustainability. In transforming wastewater into clean water for communities, Everbright has adopted the Environmental, Safety, Health, and Social Responsibility Management System, boosting the company’s long-term overall efficiency.
Why has the adoption of sustainable practices become a topic of interest?
“We are in the beginning of mass extinction and all you can talk about is money and fairy tales of eternal economic growth” ~ Greta Thunberg.
Environmental activists today are more persuasive, influential, and aggressive.
Ever since environmental activist Greta Thunberg’s presence at the “School Strike for Climate” campaign had gone viral on the internet, environmental awareness among netizens has taken a global effect, inspiring thousands of young people across the world. Her actions have catalyzed millions of environmental awareness campaigns across social media and transformed consumers’ self-awareness towards sustainable business practices.
As such, it has become prevalent for us to witness major shifts in their business marketing campaigns towards ethically sourced green products. Today, social media influencers who have been outsourced by market brands have also learned to take notice of companies’ manufacturing origins before signing any agreement, for fears of being blacklisted by their followers for supporting unethical businesses.
In Singapore, the environmental ministry even pays social media influencers to spread the word on climate change. According to The Straits Times, the initiative called the #ClimateActionSG Instagram Photo Contest, involves the micro-influencers posting photographs of themselves practising eco-friendly habits in Singapore, and urging others to do the same.
The adoption of environmentally sustainable business practices has become a topic of interest, with growing environmental activism and governmental efforts to raise public awareness about the significance of climate problems. Going green may not only appeal to businesses who wish to positively contribute towards climate causes but also empower businesses to win the hearts of the growing number of eco-friendly consumers.
Why are consumers looking out for green products?
Millennials - increasingly say they want brands that embrace purpose and sustainability.
According to the Nielsen report, "Brands that are able to strategically connect (sustainability) to actual behavior are in a good place to capitalize on increased consumer expectation and demand." The report adds, "Sustainability claims on packagings must also reflect how a company operates inside and out." More customers are demanding sustainable products from sustainable companies. The time for businesses to go green is more pressing than ever if they do not wish to lose out in this changing consumer landscape.
Consumer trend - Green is the new black.
With rising threats to the environment, an increasing number of consumers have started to pay attention to sustainable development to protect the world we live in. The concepts of green purchase and green marketing have gradually become popular.
- Green Purchase (which refers to eco-friendly product consumption activities conducted by consumers to save resources and protect the environment)
- Green Marketing (which refers to the marketing activities designed by enterprises for all consumers) are strategies used by companies to minimize the environmental impact of their products and services.
Many companies have changed their production strategies to actively respond to environmental problems and changes in consumers’ environmental attitudes. Most consumer theories that explore the impact of individual factors on green purchase behavior believe that increased exposure to environmental knowledge and values is impacting green purchase behavior by influencing consumers’ environmental attitudes.
Millennials have also shown a preference for joining companies that emphasize sustainability in the workplace, making it harder for businesses without such policies to attract and retain top talent. To top all this off, many companies enjoy government support for their support of environmentally sound practices.
How can I transform my business into an eco-friendly brand?
You may not need to invest as much as Swedish furniture giant Ikea’s plan to invest €1 billion in projects to encourage sustainability, or Google’s US$2 billion investment in solar and wind projects. With the climate challenge too big for any one company (or country) to tackle alone, every little bit helps – and at a big enough scale, even the smallest changes can make a huge difference!
To get started on sustainability schemes, your organisation may consider taking the following “baby steps” in the workplace:
- Conduct an energy audit. Take a long, hard look at power consumption in the office and zero in on possible “energy vampires” such as unused outlets and outdated devices and equipment. Use LED lights as well as motion sensors and automatic power-off timers where possible. Place notes near devices to remind users to switch them off after use.
- Conduct a water audit. Also, keep an eye out for leaks and other ways in which water might be wasted.
- Use or purchase recycled or secondhand office furniture and equipment. Not only does this reduce solid waste, but it also cuts operational costs.
- Go paperless, go digital. Several large companies such as General Electric, Nike, and A&T have saved millions of dollars by going paperless. Put a “print as necessary” policy in place and encourage recycling by double-sided printing or reusing paper.
- Look into work-from-home (WFH) setups. The use of power and paper aren’t the only things to be reduced when employees are allowed to work remotely. Carbon emissions are likewise cut back with fewer commutes to and from the office, and office rental costs also go down when entire teams work off-site full time.
- Hold meetings online. As part of going digital, online meetings reduce carbon emissions the same way remote work does
- Be smart with eco-friendly packaging. While eco-friendly options can be more costly, consumers are willing to soak up that expense in the overall product price, says industry publication, Packing Strategies.
- 50% of British consumers would choose an eco-friendly packaging option at a higher price.
- 69% believe companies should be required by law to use eco-friendly packaging, even if it means a price increase.
- 75% of British consumers want online retailers to offer more eco-friendly materials when packing their orders to minimise waste.
- 75% of international consumers would pay more for sustainable packaging.
Tips to improve your eco-friendly packaging include:
- Biodegradable materials: These packaging materials break down within a moderate timespan.
- Recyclable materials: These materials can be sent to the appropriate facilities for processing to be subsequently recycled into new raw materials.
- Reusable materials: This is the most eco-friendly option as there is no waste generated and no plastic pollution
- Do not use a mix of materials. If your packaging contains two different types of polymers, for example, that can render it unrecyclable. If you have to use plastic, sticking to one type is better.
Going green can lead to countless positive business results including being more profitable. Multinational corporations that have invested in reducing their negative environmental footprint have saved hundreds of millions of dollars in overhead costs by embracing green energy or by finding energy-efficient solutions to big problems. Cost reduction aside, going green can also help your organisation to attract and keep customers since a growing number of people are willing to support businesses that care about social responsibility.
Finally, going green can appeal to talented employees by imbuing your organization with purpose. Employees who work for socially responsible businesses will reward the company with increased productivity.
“The fact is… big businesses assess risk and opportunity at a global level, which means that their actions can reverberate across the planet. They develop systems that not only scale up but require stability and continuity to be good investments… These days, it is Big Business – not governments or consumers – that is stepping up… because they know their own corporate futures are at stake.” – National Geographic
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Darryl was born and raised in Singapore, the Little Red Dot situated at the heart of Asia. Growing up, he realised his interest in research, consumer psychology and entrepreneurship, which have motivated him to participate in multiple national-level entrepreneurial projects for which he clinched recognisable accolades. As a young and aspiring business consultant, he is now interning at a local business development and marketing consultancy firm to nurture his passion, and pursue his mission of helping businesses while contributing towards positive social changes. Through his knowledge and experience, he hopes to create more appealing articles that can impact businesses.