Chasing green
Sustainability is great, but it has to ultimately help your bottom line.
By Fred Koury
February 2009
In recent years, there’s
been a sudden surge in
interest in the idea of sustainability. Whether it’s
looking at alternative energy sources or using recycled carpet in a building
project, the focus on environmentally friendly practices has grown exponentially.
The problem is, a lot of
these green initiatives cost
money but have little, if
any, direct return to your
profits. There are always
exceptions, and some businesses may have a clientele
that demands a greater
focus on the environment.
But for the rest of us, we
are facing one of the
biggest economic crises
since the Great Depression.
Just trying to survive in
these economic times is a
major challenge. There
aren’t many organizations
that can afford to implement money-losing initiatives with little hope of
return other than some consumer good will.
In a Smart Business
national poll of senior-level
executives, 96 percent indicated that being green is an
important part of their corporate philosophy. But it’s
mostly talk because 45 percent said they aren’t willing
to invest any money in
going green, and another 34
percent would only pay
$5,000 or less for any initiatives. That’s not much of a
budget to accomplish a
companywide goal.
No one wants to deliberately harm the environment.
But in a business environment with a horrible economic outlook and tough
competition, there has to be
a return on everything you
do, environmental initiatives included. In our survey, 55 percent of respondents indicated that they
expected some form of
return on their investment
within five years of implementation — and rightly so.
You cannot run a mid-market business in this
economy based on good
intentions alone. You need
a solid business plan with
everything that is not contributing to the bottom line
trimmed out.
Everything has to be considered on its own merits.
If retrofitting your lighting
system will save you $5,000
a year and pay for itself in
three years, then it’s probably a good investment. If a
companywide recycling
program is going to cost
you $500 a month with no
measurable return, then it’s
probably not a good investment.
If there is a true demand
for something that is a
good product and environmentally responsible, then
someone will create it, no
matter what “it” is. That’s
the beauty of a capitalistic
society. Some entrepreneur
will figure out a way to
make the products we need
in a new way that will be
both Earth-friendly and
superior to what was on
the market before. When
that happens, a whole new
category of product or
industry emerges, creating
more jobs and more
wealth.
But, on the other hand, if
you try to implement initiatives based on a vague
hope that there will be
some payoff in the future,
your business will most
likely suffer. Most businesses that have implemented sustainability initiatives are either serving
consumer segments that
demand such action or are
doing things that will save
money.
For example, Coca-Cola
invested in energy management technology because
of the need to refrigerate
its products. The results
are a 35 percent reduction
— 650 million kilowatt-hours — in energy usage.
That will translate to a
direct savings to the company and help the environment.
It’s these types of initiatives that will drive true
sustainability. For sustainability to become widely
adopted in the business
world, it’s going to have to
be a win, both for the environment and for our bottom lines.
FRED KOURY is president and CEO of Smart Business Network Inc. Reach him with your
comments at (800) 988-4726 or fkoury@sbnonline.com.
