There are substantial business benefits to taking the green plunge toward sustainability, even for small businesses.
By Anisha Sekar
When it comes to business, going green is not as easy as it sounds. There are a lot of barriers a company must overcome and for most businesses, the conundrum is between helping the environment and hurting their business.
In 2009, a Wells Fargo and Gallup Small Business Index survey found that nearly 70 percent of business owners did not believe that customers were willing to pay more for goods or services that were environmentally friendly, up 37 percent from April 2007. However, 90 percent of business owners in 2009 said that they participated in recycling or switched to more environmentally friendly products.
So while there are challenges to building an ecologically sustainable, profitable business, there are clearly opportunities for many small businesses as well?
A Silver Lining From The Recession: Going Green Saves Green
Along with customers being unwilling to shell out extra money for green products, lack of cash flow is a significant problem for businesses. In the same Gallup poll, one-third of small business owners admitted that the economy had a significant impact on their plans to become environmentally friendly. Over half had not invested in energy-efficient programs within the last 18 months.
Yet more and more, it makes economic sense to go green.
Many of the small businesses making the transition to environmentally products switch to using energy-saving light bulbs. Some companies even subsidize public transportation or provide buses for their employees – you’ll put in more hours on the Google bus or on a train with Wi-Fi than if you drive.
Moreover, low-margin businesses like restaurants can take advantage of energy savings, whether by reducing use or investing in energy-efficient products. Not only does this produce immediate savings – lower bills – but it also extends the life of the equipment.
Companies that use green cleaning products benefit employees who may suffer from respiratory-related health conditions. This is because environmentally-friendly cleaning supplies contain fewer chemicals such as nitrobenzene that have been linked to physical health problems. As health care costs rise – and employers often foot the bill – even small businesses have an incentive to invest in their employees’ well-being.
On the other hand, new innovations are bringing companies closer to higher efficiency. As a result, going green is becoming cheaper for businesses, often because more companies throughout the supply chain are investing (and sometimes sharing) the costs of going green. In certain cases, tax credits are issued to companies as an incentive to incorporate green technology in order to reduce emissions or use a source of renewable energy.
For example, a sales tax exemption is available to businesses in Florida who use solar energy systems, machinery, and other renewable energy technologies. These solar energy system incentives programs allow companies to take advantage of grants and rebates for energy-efficient technologies. In addition to grants and tax credits, the IRS also enables businesses that use hybrids for company cars to take an alternative motor vehicle credit on federal taxes. Up to 30 percent of a tax credit can be for the use of renewable or solar energy.
The PR battle
Companies such as Target and Wal-Mart have made a more apparent transition to going green: transportation routes to save gas, stocking greener products on their shelves, and incorporating composting and recycling. This has resulted in a positive reception for these “big box” stores, which usually find themselves on the receiving end of public ire.
Simply put, companies that go green can have a huge impact on the environment by reducing waste, saving energy, and preserving natural resources. While going green can be costly for small businesses that cannot necessarily afford green technologies such as solar panel installation, it can also open up new opportunities: publicity, tax credits and grants, an improved workplace, better sustainability, and in some cases increased revenue and lower energy usage.
Incorporating green cleaning products, hybrid company cars, using less paper, or converting to energy-saving light bulbs are things that all businesses should consider -- for the sake of our environment as well as their own bottom line.
About the Author:
Anisha Sekar is the VP of Credit and Debit Products at NerdWallet.com, a financial decision-making website that helps consumers make quantitative, informed choices. She studied at Brown University, and has worked at Silicon Valley startups as well as in the public sector.