Five benefits of climate-friendly business practices

1. It can decrease your costs

Whether you make a product, sell goods or provide a service, chances are you’ve got heating and electricity bills to pay. Because these expenses are recurring, they represent simple ways to start integrating climate best practices into your operations while quickly seeing the benefits.

If you don’t think about the climate and reducing energy costs, it's a bit like writing a blank check to pay more for energy in the future. Energy costs can be highly unpredictable, but that also means reducing these costs will provide you with more certainty.

The benefits of reducing energy use are also a lot simpler to calculate than other aspects of climate-friendly practices: more energy use equals more expenses. By doing things like upgrading your windows, switching to energy-efficient appliances and turning off the lights after work, you can direct more of your money into your core business activities.

2. It can help future-proof your business

For Stephan Vachon, professor of operations management at HEC Montréal, energy costs represent a pure risk, as does climate change—and he believes both risks will require more and more managerial attention.

Across the country, environmental factors will increasingly create new challenges for business owners.

Companies in storm-prone regions, for instance, will face more shutdowns due to extreme weather events. Stores in wildfire-susceptible and flood-prone regions will have to protect their assets from natural disasters, and food producers in heat domes will have to find ways to protect their goods during heat waves.

Vachon says climate practices like responsible energy use and measured inventory management can help businesses build a buffer against what could be an increasingly costly future.

Taking stock of how energy costs and climate change will impact your business—and your clients’ choices—in the years to come will help you choose growth strategies more likely to succeed in a low-carbon economy.

3. It can maximize your output and cut waste

Waste is inefficient and costly. Whether it’s exhaust from your delivery vehicles or the plastic scraps from your packaging, pollution is made up of materials you bought—and won’t use.

“If you’re going to reduce pollution, you need to increase the yield of the inputs you purchase,” says Vachon.

He encourages businesses to maximize their yields by redesigning their products and business processes—which will also cut waste. Becoming more efficient with your resources can help you become leaner, so you’ll see fewer dollars fly out of exhaust pipes and slip down drains. The only remaining by-product of waste-reduction becomes sustainability itself.

4. Customers are more likely to buy your product

Today’s consumers see through greenwashing and share their experiences widely. Underneath the scrutiny is a desire to see sustainability succeed.

A 2021 BDC survey of more than 1,000 Canadians found that 34% of consumers consider the environmental impact of their purchasing decisions, going up to 45% for people aged 18 to 34. The survey also revealed that 80% of consumers are willing to pay more to reduce their environmental impact.

There’s an element of competitive advantage. You can become the supplier of choice by taking a proactive stance on climate.

However, businesses can hurt their image with consumers if they’re not taking sustainability seriously. If customers perceive that a business is failing to address the climate crisis—or worse, contributing to it—they may start to walk away.

Carla Heim, Director, Corporate Sustainability at BDC, says many consumers are skeptical of green claims. She encourages businesses to consider seeking external certifications for their climate-friendly initiatives to prove that they’re walking the talk.

5. It inspires your employees

A productive workforce needs motivation, and more and more employees are looking to their employers to take climate actions.

This is especially true with our younger generations, who generally really see it as important to work for an organization that shares their values.

But to achieve your climate goals, you need your staff to buy in. For example, if you want to use less electricity, you need employees to feel motivated to turn off lights in empty rooms and power down their computers at the end of day.

Because training staff on new habits can be challenging, Heim encourages new businesses to integrate these sorts of company-wide habits early on.

Writing your climate goals into your mission statement can give your team a guiding set of principles to follow. “Your mission statement is critical to your purpose and should define the impact your company will have on consumers and perhaps the world,” says Heim.

Companies with compelling climate commitments can also recruit and retain ambitious and energetic employees by making them part of the firm’s mission.

Conversely, if workers are disengaged, it can lead to high turnover—which can really damage a company’s ability to grow and meet its goals.

Next step

Get more tips and data about the environmental transition by downloading our study A Transformation in Progress: How Canadian Entrepreneurs Are Taking on the Environmental Challenge.