Sustainability has been defined by the U.S. Environmental Protection Agency (EPA) as a blend of policies and strategies that meet society’s present needs without compromising the ability of future generations to meet their own needs. What was initially met with resistance has been replaced with the realization that, when enacted with planning, innovation, and company-wide buy-in, sustainability initiatives can have positive effects. In a January 2012 report, “State of Green Business 2012,” published by GreenBiz.com, it was found that over half of Global Fortune 250 companies saw a gain in financial value from their sustainability initiatives and that 48% of S&P 500 companies are now reporting environmental and social performance indicators.
What was once considered a “feel-good” effort is now a financial necessity, and often, a financial boost to a company’s overall profits. Compliance with more stringent environmental regulations may have been the impetus for movement but according to Kurt Kuehn, CFO of UPS, there are five reasons why companies should care about sustainability. If done correctly, these initiatives can:
- Cut costs
- Mitigate risks
- Generate revenue
- Drive innovation
- Improve employee development and retention
The additional reason companies should care about sustainability is, of course to benefit the environment. So what exactly are some of the most successful companies doing when it comes to sustainable initiatives?
- Con Agra reported savings of $22 million in 2012 by optimizing and improving their packaging, thus reducing 3 million pounds of material; improving palletizing and logistics; and conserving 646 million gallons of water; among other initiatives.
- Darden Restaurants, parent to Red Lobster, Olive Garden, Longhorn Steakhouse, and others has already cut its restaurant-wide water consumption by 15% in 2012, three years earlier than its 2015 goal.
- Walmart, ranked #1 retailer for onsite generation of renewable energy by the EPA, reduced plastic bag waste globally by 42 million pounds, which translates into 3.1 billion bags!
- FedEx estimates that, before the end of this year, they will have improved the fuel efficiency of their U.S. vehicle fleet by 22% compared to 2005.
These are just a few of the ways companies are saving money and the environment simultaneously. So, knowing all this, what can you do in your company?
- First, for any sustainability initiative to work, it needs buy-in from the top, down. It needs to actually be an integral part of overall corporate strategy.
- Raise awareness and education regarding your company’s sustainable practices, and encourage employees to practice their own, such as carpooling to conserve energy.
- Discourage paper when possible; encourage employees to work digitally and avoid making paper copies of documents.
- Implementing AP Automation and converting about 50% of your paper invoices to electronic invoices could save nearly one million trees and 240,000 tons of paper per year.
- Encourage your Procurement team to promote sustainability with your suppliers.
Most important, once you’ve implemented initiatives, track the savings your company realizes through a decrease in energy and material costs and an increase in employee productivity. There are a few situations in business where feel-good actions actually translate into “do-good” results for a company’s bottom line. This is one of them.
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