Financial benefits of green practices

12 Jun 2015

Edward O Wilson said: "The great challenge of the twenty-first century is to raise people everywhere to a decent standard of living while preserving as much of the rest of life as possible."

With unemployment at a record high of 26.4%, and with constant price hikes and electricity shortages stifling the South African economy, how can going green benefit business, decrease costs and, coincidentally, save the planet?

While big business might not be overly concerned about the effect that its actions has on the environment, it does care about its bottom line - so why not implement eco-friendly practices that will protect the environment and enhance profits? Many green practices save businesses money by reducing overall operational costs, such as the decreased use of water and electricity or the use of green cleaning products, which are highly concentrated and more effective than traditional products.

Tax on carbon emissions

In an ongoing effort to thwart climate change, the South African legislature has passed carbon emissions tax legislation. As was confirmed in the National Budget speech delivered earlier this year, this legislation will require that all corporate businesses pay carbon tax as from January 2016. Businesses that do not prepare for this reality will face severe taxation, negatively impacting on the profitability of the business. Formulating sustainability plans, and implementing sustainable practices now will ensure that the level of taxation is minimised in the future.

Going green in the office also has the added benefit of creating a healthier work environment for staff. This encourages a healthier workforce, meaning less absenteeism and increased productivity. In turn, again, positively affecting the business' financial performance.

While decreasing operational expenses alleviates some pressure, increasing income would facilitate greater business success. By repositioning a company as a sustainable organisation, greater market share can be achieved. It must, however, be ensured that the organisation does not sell itself as green, while it is really only green-washing. Should the company's non-effective green practices be exposed, the negative effect on the reputation of the business will be devastating.

How to go green

How can businesses go green? Purchase from green suppliers, instil an organisation wide energy and water saving culture, recycle, use environmentally friendly cleaning products, decrease paper usage, update office equipment with greener options and consider alternative energy option, to name but a few green avenues. A great way to determine the best approach is to hire the expertise of a consultant to conduct and energy audit. Although the business may not be able to implement all of the suggested aspects immediately, the data could assist in formulating a plan of action.

It is possible to improve an organisation's green scorecard, without compromising on profitability. In fact, in practice, using the balanced scorecard to ensure sustainability shows great benefits, after all, "Every profession bears the responsibility to understand the circumstances that enable its existence." - Robert Gutman.