Why it makes perfect business sense to be green

By: John Barwise

Date: 22 April 2013

Why it makes perfect business sense to be green/recycle sign and planet{{}}Rising energy prices, huge disposal costs and fuel taxes add to the cost of running a business – and the regulations controlling pollution and waste are getting tighter.

Saving energy, reducing waste and improving resource efficiency are the key drivers that will improve your business performance, reduce your overheads and increase profits.

Regulators, investors, insurers, customers and local communities all have a stake in what businesses do and how they operate.

Reasons for going green 

  • Savings from the efficient use of energy and raw materials — getting more from the same or less materials and energy consumption and from minimising waste, which reduces carriage and disposal costs.
  • Improved market share — a better environmental profile can generate an increased market share. The growth in green consumerism since the 1980s has meant that consumers are more likely to purchase products and services that are considered less harmful to the environment.
  • Enhanced investment opportunities — investment institutions take environmental considerations into account when deciding which companies to invest in. For example, the FTSE4Good Index now tracks companies with a proven ethical, social and environmental record, which further encourages ‘responsible investment’.
  • Reduced insurance premiums — insurance companies look at risks from potential pollution and set business premiums accordingly. They are more likely to look favourably on businesses that demonstrate effective environmental risk management. There are now specialist environmental insurance policies available to address environmental risk.
  • Environmental taxes — designed to encourage businesses to improve their environmental performance and resource management and minimise impacts. Examples include Landfill tax, aggregate tax, climate change levy, carbon reduction commitment and emissions trading schemes. In some schemes the money raised in taxes is paid back to businesses in the form of reduced employer’s insurance contributions.
  • Financial incentives – designed to encourage businesses to invest in low-energy technologies. Examples include Feed in Tariff, Renewable Heat Incentive, enhanced capital allowances, etc.
  • Environmental regulations – European and UK legislation and environmental regulations have increased substantially in recent years. The Environment Agency and other regulators consider environmental management systems (EMS) as a good indicator of an organisation’s responsible approach to their environmental liabilities and risks.

Green up your products and services and you will also increase your market share, reduce your overhead, minimise unit costs of production and improve your business reputation. 

John Barwise is a chartered environmentalist and registered environmental auditor, as well as chair of Cumbria Green Business Forum.

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