Can you Go Green profitably?
B-Corp accreditation, Carbon Offsetting, Plastic reduction – businesses are more and more aware of their environmental footprint and how this impacts customer perception.
This is wonderful for our planet. Yet it creates a real headache for those business owners who WANT to improve their footprint, but find that Going Green often comes at a cost.
If the green alternatives lead to a red bottom line, the business itself won’t be sustainable.
Where to start?
Plastic packaging is constantly in the news, whether being reduced in supermarkets or ending up in the oceans. Consequently, many businesses feel that this is the place to start their environmental journey.
Alternatives to plastic packaging abound: compostable takeaway tubs; paper ‘bubblewrap’; beeswax wraps instead of clingfilm; a return to glass. But frequently, these alternatives are more expensive than the unfriendly existing methods. If plastic is the answer for your business, are you using recycled or/and recyclable plastic?
Even if a direct alternative were the same price, making the swap is costly in itself: manufacturing machinery needs to be adjusted or purchased, the new products need testing, new designs may need to be produced.
A packaging overhaul is not quick or cheap, and companies need to have the funds and desire to invest in it. Many businesses decide that this is too large a project to tackle – understandably, if the investment of time and money will make the core business suffer, or eat up the profit margin. Having a green business is only an advantage if you still have a business.
Tackling Wastage = Saving Money
Having shelved large project plans, many business leaders are regretful and frustrated that they can’t do anything that doesn’t cost the Earth (pun intended).
Not so. Every business has a huge opportunity to become greener AND become more profitable. It’s one of the most overlooked opportunities in business.
It’s called Wastage.
‘Wastage’ occurs in many ways and you should regard it as not only physical items being thrown away, but your cash too.
Tackling Wastage creates the biggest profit impact when you have multiple prongs of attack across the business. Some are generic (power usage), some will need creative thinking.
Here are some examples. What of these could you do?
- Capture manufacturing waste and re-use it. Offcuts of metal or other products can be fed back into the manufacturing process, or sold on to a 3rd party – either way reducing your costs.
- Reduce the volume of your waste: compressors and shredders make your waste smaller, so you need fewer vehicles to dispose of it – lower waste & cleaning bills.
- Revisit your Demand Planning process. Can you make it more accurate, or longer term? Your aim is to have no out-dated stock to write off/write down – this is particularly tricky for perishable food products or seasonal items.
- Reduce your utility bills: turn off lights, computers, and machinery when not in use. Doing a tea-run and only boiling the kettle once instead of 3 separate times also counts- it all adds up and EVERYONE in the company needs to buy into the plan for it to work.
- Use fewer Consumable items: Printing cartridges and paper are top of the stationery purchase lists. Print less, print double sided, or try to be a paper-free office.
The opportunities are endless; identifying them and how to cut out the wastage for your individual business is where the creativity lies.
One way to break down the huge task of becoming greener is to set a challenge for the managers in each area. They are looking to reduce the costs under their control by 5%, with a focus on waste reduction.
Pushing this challenge out into the wider business brings employee engagement and produces brilliant ideas from those who are closest to each detail of your business.
It doesn’t need to be technically advanced. The simple ideas can be the most effective. It might be an extra recycling bin or buying more cups & glasses to ditch the need for disposables.
So, can you Go Green profitably?
Yes. Definitely Yes.
But there is no silver bullet: you have to embrace the challenge & think about all the ways you can tackle wastage in your business.
For example: Donating short-dated stock to a charity doesn’t stop you losing the profit from not selling these items,
- But it DOES save you the additional cost of removing & destroying the goods (less cost= more profit);
- It puts the items to good use and reduces landfill (green credentials);
- PLUS it creates the immeasurable value of positive brand awareness and goodwill generated. (Which in turn can lead to more sales, then better margins on higher volumes, more to invest in accurate planning and sustainable materials….)
And as your business becomes less wasteful in its current guise, other environmentally sound options will crop up, whether a chance to negotiate with a new, more ethical supplier, or the savings generated to date will now fund that packaging project.
From small acorns grow mighty green oaks….