Sustainability Strengthens Your Business Operations

Sustainability, or the Triple Bottom Line of People, Planet and Profit, is a topic that often takes a back seat in smaller or medium-sized organizations due to lack of time or budget, or other priorities. This is the case even as larger organizations, such as the S&P 500, increasingly embrace sustainability.

According to a study by the Sustainable Investment Institute, 92% of those organizations include sustainability disclosures on their websites, and 78% issue reports. While the level and quality of information reported varies, the disclosures and reports are still a great indication that these companies recognize sustainability as important to their business practices.

Larger companies have recognized that sustainability makes business sense. They are beginning to factor in sustainability into their daily operations, and smaller and medium sized businesses would benefit from doing the same.

Why implement sustainability into business operations? For many reasons, but one is because it is riskier and costlier in the long term to ignore it than to implement it. Operational risks include any events that disrupt business processes. For example, major storms that can shut down your brick and mortar store, energy price fluctuations that make it tougher to accurately predict overhead costs, or increased turnover due to staff dissatisfaction.

Here's a quick look at these three examples of operational risk and how they can be addressed through the sustainability lens:

1. More frequent climate events

Storms are becoming stronger and more numerous worldwide. With this comes an increased likelihood of power outages, physical damage to buildings, and closed business days. According to a NOAA summary of the third U.S. National Climate Assessment, “some extreme weather and climate events have increased in the recent decade” and “impacts related to climate change are already evident in many sectors.” Still not convinced that climate change could affect your business? Check out this Forbes article and detailed Harvard Business School assignment with over 900 examples of businesses affected by climate change.

While resiliency planning is something that is recognized as necessary for cities, there aren’t as many tools available for businesses. There are, however, two that could help you start in that direction. One is PREP, the Partnership for Resilience and Preparedness, which is an open source platform developed to help corporations make long-term infrastructure decisions by improving their climate resilience planning. The second is NOAA’s Climate Explorer Toolkit, which lets you look at past and projected climate trends at a local level so that you can integrate that into planning, operational and investment decisions.

2. Energy price fluctuations

Wholesale energy prices are impacted by a variety of factors, including political unrest, natural disasters and market reforms. Those impacts are passed on to the customer, you. Depending on where you are located and the business that you are in, energy prices may have a minor or major effect on your bottom line, but they will have an impact, so it is to your benefit to reduce the costs and fluctuations.

To reduce this risk, start by reducing your overall energy costs. You can begin by speaking with your facilities manager and reviewing building controls, including setpoints and schedules. If you have some budget and own the space, consider an ASHRAE Level 1 energy audit and see what actions you can implement. Next, see if you can lock in your energy rates and either install solar or wind at your place of business, or purchase RECs(renewable energy credits). You can check the Database of State Incentives for Renewables and Efficiency for any potential rebates to defray some of the costs.

3. Increased turnover

Today’s top talent is looking to work for an organization that is taking actions that positively impact the planet and others. This is especially the case with millennials in the US. Per the U.S. Census Bureau, there are more than 74 million 18- to 34-year-old Americans. It’s the country’s largest demographic. The opportunity to make a difference is high on millennials’ priorities list, and if an organization is not making a positive impact and offering an inspiring workplace, odds are that those individuals will not stick around. While there are many estimates of the cost of employee turnover, the lower end studies are at about 20% of an employee’s annual salary. That’s quite a chunk of change, especially for smaller and medium sized organizations.

What can you do to increase the odds of employee satisfaction? Get them involved in projects that support the organization as well as the planet. This can be as simple as forming a Green Team, organizing a recycling campaign or challenge, and having volunteer days related to giving back. The added benefits of these actions is that your colleagues may find some operational efficiencies and additional cost savings, making it an even greater win.

If you're considering implementing sustainability at your organization, be sure to download our free sustainability checklist that can help you determine what you are already doing and some additional actions you can take.