While many companies are avoiding developing sustainability policies, a select group are responding to the need for urgent action. One might think this is a concern for Fortune 500 companies and ask, why does my small business need an environmental sustainability policy? Environmental sustainability has become an essential component of 21st century business operations. As demand for environmental accountability increases, sustainability reporting will play a greater role in how businesses demonstrate their environmental leadership, capture market share, and sustain themselves for future growth. Let's explore how environmentally friendly operations and policies can directly impact your bottom line.
Many consumers opt for a company that cares about the environment. Faced with choices, consumers look for reasons to exclude options. The lack of commitment to the environment is a good reason. Perception is key, and your brand and reputation are at stake. Having a sustainability policy shows you are committed to protecting the environment.
Through a few minimal changes, a business can realize meaningful savings. For example, consider how much is spent per year on paper and the space used to store it. Implementing a “go paperless” policy saves trees and money spent on paper, printers, ink and disposal. Furthermore, it can save human resource hours by reducing the need for filing. Store files electronically and get rid of those big, space consuming filing cabinets. This will free up space for things that are more important for your business and employees.
Another bright idea for saving money is through conversion to LED lighting. Did you know that energy used by lights alone can be 20-50% of your electric bill? Upgrading your business to light emitting diode (LED) lights can be a powerful savings tool that you shouldn't overlook. Converting to LED lights will reduce your business' electric bill now and for years to come. It can also improve visibility of your storefront. Bright LED lighting will make your business stand out and be safer and more inviting to consumers.
Does your business require signed documentation? If so, consider electronic document signing, often known as eDocs, to facilitate faster, more efficient internal processes. This not only saves money and time, it is attractive to consumers.
Do your competitors have an environmental sustainability policy? If the answer is Yes – you can clearly see you need to start drafting. If the answer is No, this is a unique opportunity to get ahead of the game and be an industry leader.
Some clients may request paper invoices; however, e-mail is much more efficient and timely, and quite often, more secure. Many consumers are opting to receive statements, invoices, and more electronically. Consider the money that could be saved with reduced paper, postage, and human resource hours processing snail mail. Invoices can be sent out with the simple click of a button.
Governments are increasingly offering sustainability-related tax incentives to encourage organizations to invest in projects and technologies that reduce the carbon intensity of their operations. Identifying and securing tax and other business incentives can often help companies meet or improve the return on investment (ROI) thresholds that are required for these projects. Governments across the globe are looking for new sources of revenue. This has led to an increase in environmental and energy taxes in recent years. These taxes cover activities including emissions, manufacturing of certain products, transportation, energy generation, resource use and other negative environmental externalities. As the global economy continues to rely on fossil fuels, concern over limiting the release of carbon dioxide emissions associated with the combustion of these fuels has intensified. Carbon taxes and cap-and-trade systems are examples of ways to limit these emissions. Such carbon regimes are not only growing geographically, but are beginning to cover more industries as they progress.
An Ernst & Young LLP Environmental Sustainability Tax Survey gauged the level of involvement of business tax departments with their companies' broader corporate environmental and sustainability initiatives. The survey included responses from 223 senior executives at companies of various sizes and industries. Survey results show many businesses are missing out on cost savings due to the lack of integration of sustainability efforts.
CEOs are starting to recognize that issues such as climate change, water scarcity, and impacts on natural resources concern society, and that these issues affect their business. As greater attention is paid to these new issues, a series of best practices have evolved, and a movement is now under way to elevate sustainability performance to a status nearing that of financial performance. We will dive into the framework of a sustainability policy and best practices we have identified in upcoming blog posts within this series.
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