Why bother greening your business?

Why bother greening your business?

You would have to be living on Mars over the past couple of years not to be aware of the “greening” of virtually everything in the name of environmental sustainability and cost savings.

As an individual, I am genuinely worried about climate change, the continuing damage to our environment, the ugly legacy we will leave our children and grandchildren, and the 100 year storms which seem to happen every couple of years now. Fuel costs have risen to a point where energy is a material portion of our family expenses. We recently traded our SUV for a smaller sedan and around the house we are more conscious of the principles of reduce, reuse, and recycle. We know we can do more and we understand it is up to us to make it happen.

As a business leader however, I and probably many others like me are not so confident on the logical steps required to “green our business”. While I am clearly not an expert in this area, I have given this some thought, conducted some basic research and would like to share some insights on the topic of “greening our businesses” in the form of a FAQ.

1. Why bother greening your business?
2. If oil prices drop to $100 again will all this green stuff blow over?
3. Is there a return on investment (ROI)?
4. Do customers really care about green?
5. Will customers pay more for green products and services?
6. How green is the business now?
7. What is “green washing”? What is “green sheen”?
8. How green do we need to be?
9. How might we create a green culture?
10. What is some good greening the business resources?

1. Why bother greening your business?
Many, including our customers would say this is a rather silly question at this point given all we know now. We must green our businesses because; it is the right thing to do, our employees (existing and even more so recruits) will expect it, our customers and partners will soon (if not already) ask us to prove it, and because there can be a return on investment. I wonder if General Motors debated “green” in the board room over the past couple of years.

2. If oil prices drop to $100 again will all this green stuff blow over?
No. The price of oil may drop some; it might even drop to close to $100. While possible, this is not likely to cause the green stuff to blow over. High oil prices are with out a doubt a key catalyst for every thing green because the impact is so universal, but I believe the green thing is more fundamental now. We all have a responsibility to lessen our impact on the environment and our purchasing power will increasingly only go to those we believe are on the same green page as we are.

3. Is there a return on Investment (ROI)?
Yes. But when a business looks at “green” in terms of getting off the grid by implementing for example a windmill, an energy savings based ROI can be measured in a decade or more. This ROI timeline is neither compelling nor practical for most small and medium sized businesses. This is not the way to think though. Many of the greening methods and initiatives do not require big capital expenditures. The ROI of “greening your business” should be measured in improved top and bottom line, improved employee and customer loyalty, market expansion, and yes reduced energy costs. Further, there is likely a financial risk in not being green because being so will have the opposite effects.

4. Do customers really care about green?
Yes. In business to business segments it is becoming common place for companies to demand their partners and suppliers are green. This in fact is essential for them to be green. Corporate responsibility, including being green, will become a common procurement specification.
In business to consumer segments, one could argue that the expectations here will rise even faster. Corporate brand managers are very concerned about their companies green reputation. Those businesses targeting customers which fall into the gen x and y categories had better be green or going that way.

5. Yes but will customers pay more for green?
Yes and No. In the short term, B2B and B2C companies will be able to charge a 5 to 10% premium, but not in the medium long term. Quality control and ISO certification were key business initiatives in the 80’s and 90’s. They were differentiators at first, but over time they became table stakes, part of the cost of doing business.
Green however I believe is different. Quality and ISO affected the delivery of your products and services only, not our environment which could affect us all.
When it comes to green, customers will look for the high value products and services which are also green (read will not buy your products and services unless they are green). While customers do in one way or another pay for quality, it is now table stakes and they have come to expect it. The same will go for green. For the next 5 to 10 years businesses will be able to differentiate by offering excellent products which are also green.

6. How green is the business now?
This is a tough question to answer. With out some type globally accepted or defacto neither green measurement nor documented comparables how can we tell how green we are. For now, beyond some rudimentary carbon footprint/green house gas emission calculators, we are sort of on our own. I wouldn’t try this as an excuse though. We need to proactively baseline “our greenness” in order to truly make measureable improvements and obtain a measureable return on investment. Every business needs a green plan of some kind and need to continually refine it over time. This does not have to be complicated. More on this later.



7. What is “green washing”? What is “green sheen”?
Green washing is a term used to describe the perception of consumers that they are being misled by a company regarding the environmental practices of the company or the environmental benefits of a product or service. The term green sheen has similarly been used to describe organizations which attempt to appear that they are adopting practices beneficial to the environment. Source: Wikipedia
It should go with out saying that neither green washing or green sheen would help the brand of any organization.

8. How green do we need to be?
I believe that we are all expected to understand where we are right now, and use best efforts over time toward greening our business. No one is expecting an overnight green makeover, just as no one will tolerate a total disregard for green. A business must make a genuine effort and be able to share with key stakeholders how they are approaching greening the business.
Share? Yes share, via a simple list of things which have been done, are being done, and will be looked into in the future. Employee involvement is key to making sure the maximum impact is felt.
When it comes to key B2B customers, a proactive review of their website to better understand published policies relating to green (environmental, carbon foot print, green practices, etc) will give you perspective on how green you will need to be.

9. How might we create a green culture in our business?
Be genuine. Share with the staff that you would are looking for ways to green the business and that everyone is responsible for making it happen. Set clear high level guidelines that green initiatives which cost more than $X to implement or will affect the performance of the business relating to customer satisfaction must be first approved. Make a list of greening opportunities and when implemented, list the persons who came up with the idea and those who implemented.

10. What are some good greening the business resources?
- Good ideas for the home and office: http://www.greenlivingideas.com/
- Calculating carbon footprint: http://www.carbonfootprint.com/
- Helpful information as well as incentives to green your home and business: http://www.conservens.ca/
- Information on carbon offsets: http://www.v-c-s.org/
- Information on ISO green standards such as ISO14064: http://www.iso.org/
- Resource for both businesses and individuals who want to be environmentally proactive and www.upongreen.com

Dan MacDonald

P.S. While we can all do our part in to green our homes and businesses in some meaningful way, we all need to be aware that many families are struggling to manage their finances especially high energy costs. A large percentage of these families are essentially unable to make some of the “green choices” many of us take for granted such as trade their vehicle for a more efficient one or use mass transit.