Five benefits of environmentally-friendly business practices
Read time: 9 minutes
Today, businesses that use sustainable practices are seen as leaders in their fields. But sustainability is fast becoming a requirement for doing business, rather than a choice.
Many consumers already prefer to support good corporate citizens, and governments as well as investors are increasingly demanding progress on sustainability.
In other words, there’s no time like now to start incorporating sustainability into your business practices.
Sustainability starts in your mission statement and nurtures your future. It requires buy-in from your employees, discipline from your company’s leaders, and a consistent effort to ensure you’re on track. But it pays off—for everyone.
Here are five benefits of implementing sustainable practices in your company.
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 sustainable practices into your operations while quickly seeing the benefits.
“If you don’t think about sustainability and reducing energy costs, it's a bit like writing a blank check to pay more for energy in the future,” says Simon Hutton, Senior Advisor, Sustainability and ESG at BDC. 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 sustainability: 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 sustainable 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,” says Hutton.
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.
If you're going to reduce pollution, you need to increase the yield of the inputs you buy.
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 at the moment,” says Hutton. “You can become the supplier of choice [to consumers] by taking a proactive stance on climate.”
Hutton also says that 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,” he explains.
Your mission statement is critical to your purpose and should define the impact your company will have on consumers and perhaps the world.
Carla Heim, Senior Advisor, Social Entrepreneurship at BDC, says many consumers are skeptical of green claims. She encourages businesses to consider seeking external certifications for their sustainability initiatives to prove that they’re walking the talk.
Certify your commitments and actions
Certification offers a stamp of approval to demonstrate that your operation reaches specific social and environmental standards. It’s a valuable way to prove that your business is committed to certain outcomes outside of your budget.
One well-known certification for sustainability is the B Corp certification. To become a certified B Corp, your company must write its commitments into its articles of incorporation. “This change in the legal structure basically says that when you make decisions as an organization, you make decisions that are best for your employees or best for the environment,” Heim says. “That puts everybody on notice.”
Other process-based certifications—such as ISO 14001—set out management systems for businesses seeking to boost their environmental performance. Compliance with such a certification ensures that your business has processes in place to catch inefficiencies, remediate product or service defects, and continually improve its sustainable practices.
Vachon says implementing such a review system early in your business’s life can reduce growing pains. “It will force you to be disciplined with your costs,” he says. “It will force you to be disciplined with your energy consumption and to manage inventory properly. It has many aspects that can be in synergy with the rest of your operation.”
However, both Heim and Vachon say you shouldn’t necessarily strive to achieve certifications (which can be costly) before you’ve found your feet. Rather, they suggest you build up your business to align with the criteria set out in certifications so that when the time is right, you’ll be ready for the stamp of approval.
5. It inspires your employees
A productive workforce needs motivation, and more and more employees are looking to their employers to take a stand on issues like sustainability.
“This is especially true with our younger generations, who really see it as important to work for an organization that shares their values,” says Hutton.
But to achieve your sustainability 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 and Hutton encourage new businesses to integrate these sorts of company-wide habits early on.
Writing your sustainability 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 what Hutton calls “compelling sustainability 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.
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.