Thriving in a changing business climate
Around the world, governments are beginning to respond to the global warming challenge by putting in place policies that aim to shift our economies away from a reliance on burning fossil fuels and emitting Greenhouse Gases (GHG). Most businesses will likely be affected by these policies in some way. A growing number of businesses have already begun measuring, tracking, and reporting GHG emissions and have demonstrated that migrating to a sustainable business model can be an opportunity for innovation, cost savings and increased profitability.
Bottom-line cost savings
Outperform your competition
Not only do recent studies report that companies with a sustainability strategy have stock prices that outperform their respective industries by 15% (A.T. Kearney, 2009), but a firm's energy related costs can be significantly reduced by reducing carbon emissions. In fact, a July 2009 McKinsey & Company report concluded that in the United States, energy efficiency improvement could generate savings of more than $1.2 trillion.
Avoid costly regulation compliance errors
It is a near certainty that a price on carbon dioxide emissions will escalate in the next several years. Requirements are changing at all levels of government, both in terms of incentives and stimulus funds, as well as regulation. For example, the Province of Ontario recently announced carbon reporting legislation that will phase-in carbon reporting for heavy emitters (more than 25,000 tonne's annually), while including voluntary reporting guidelines for smaller emitters. Preparing in advance will help organizations alleviate risk from costs incurred from excessive carbon emissions and fines resulting from non-compliance with upcoming regulations.
Meeting new supply-chain requirements
Meet changing supplier requirements
Many business partners, with Walmart leading the charge, are imposing strict requirements upon vendors to incorporate environmentally sustainable practices into their business operations. Walmart is already rating their suppliers on a Sustainability Index and state:
Taking steps to measure sustainability impacts, and setting targets to reduce those impacts lead to reduced waste and costs, as well as innovation and new revenue streams. There is no doubt, meeting targets on a Sustainability Index will become a requirement for many companies.
Adapting to a changing marketplace
Stay ahead of the curve on changing demographics
Changing demographics shows the generations moving into positions of prominence, as consumers and investors, are looking for meaningful action on global warming and climate change. A business that ignores this shift risks a slowdown in growth and a loss of market-share, as consumers and investors turn towards organizations that show a commitment to achieving emission reductions. Investors have the added concern of climate change risk exposure due to inaction.
Competitive advantage of credible green branding
Backup your green marketing claims
Credible branding and reputation are of critical importance to shareholders, customers, and prospective employees. However, with 98% of green marketing claims being either in-part or entirely false (Mulch, 2009), and 75% of consumers believing that environmental claims are just marketing ploys (Benismon Byrnes, 2008), substantiating claims with tangible data backed up with third-party support is becoming essential to gain a competitive edge.
Attracting and retaining top-tier employees
Young employees are looking for comprehensive environmental strategies
Now more than ever, young employees are demanding comprehensive environmental strategies from their employers, and job seekers are making it one of their decision criteria. In fact, 92% of Millennial (Generation Y) employees are more inclined to work for a company with a sustainability strategy, while 50% of these young grads are willing to take a lower salary to work for a company with a good reputation with respect to environmental sustainability (BrownFlynn, 2008).