Establishing a sustainable business is becoming evermore important for small business owners. Not only do sustainable business practices positively impact the environment, there are also massive benefits for your business's bottom line. Read for ways to adopt sustainable business practices and the numerous benefits that follow.
Sustainable business practices are methods of operating that allow a business to reduce its negative impact on the environment and society and make a positive impact on the world around them, while still making a profit. Large businesses have long been interested in minimizing their environmental impacts, and because those actions boost business, as well as improve the world around us, more small businesses are joining them.
In recent years, business leaders and investors have become increasingly convinced that a business’s impact on the environment and society is linked to its long-term financial performance. And a focus on sustainability isn’t just for large corporations. Small businesses aiming for long-term success can also benefit from paying close attention to sustainability issues—even making a few small changes can make a lasting difference.
How can sustainability benefit my business?
Operating more sustainably offers a number of benefits for small businesses. First, it can reduce business costs.
For instance, when you choose to conserve energy by regulating your thermostat or turning off electronics when they’re not in use, your business utility bills will be lower. At the same time, your business will rely less on carbon-intensive power plants, helping to lower their carbon footprint and make a positive impact on the environment.
Similarly, if you choose to use recycled materials in packaging your goods, or simplify packaging for shipping, you’ll create less waste and decrease your carbon footprint. At the same time, those choices can also lower your packaging costs and boost your bottom line.
Also, implementing sustainable business practices can boost your reputation. For example, a recent study found that almost 70% of North American consumers say it is important for a brand to be sustainable or eco-friendly.1 When customers and potential customers see that your business supports the causes they care about, makes efforts to reduce its carbon footprint, or demonstrates a commitment to diversity, they are likely to be more interested in continuing—or starting—to do business with you.
In addition, companies that prioritize sustainability issues are more likely to attract investors and partners who are committed to building a better world. In recent years, the amount of money invested with sustainability in mind has risen sharply. For example, sustainable investments made in the United States rose 42% from 2018 to 2020, reaching $17 trillion in 2020.2
But even if you’re not currently looking for investors, committing to sustainable business practices can position your small business to attract partners and customers who also value sustainability. And if you choose to seek investors at a later date, you will have a strong competitive edge thanks to your longstanding commitment to sustainability.
Finally, sustainability can produce improved financial results. For example, a Harvard Business School study found that companies that implement sustainability practices generally outperform those that do not.3 Researchers found that highly sustainable companies are able to attract better employees, establish more reliable supply chains, avoid conflicts with nearby communities, and engage in more innovations, all of which lead to improved bottom-line results.
What steps can I take to make my business sustainable?
There are a number of steps you can take to make your business more sustainable. Consider these to get started and to help spur more ideas.
Commit to energy efficiency. You can make a number of changes, small and large, to make your business more energy efficient. Without investing much time or money, you can reduce your energy usage during peak hours by staggering workers’ schedules or running heavy equipment during evening hours, and program your thermostats to better manage energy during non-business hours. Your local utility company may offer a free energy audit, which can offer you more ideas for how to become more energy efficient.
For long-term projects that may require more planning and a larger investment, you can plan to purchase energy-efficient office equipment or invest in energy-efficient building solutions. And to help you finance those energy efficiency updates, some lenders, including the Small Business Administration, offer green loans, which are loans with specific environmental requirements for the funds.
Seek out green suppliers. The sustainability of your company doesn’t just depend on your own practices; it also depends on the impact of your suppliers. If your current suppliers don’t share your commitment to sustainability, consider asking them to make changes or looking for new suppliers. Green America, a nonprofit organization, offers a Green Business Network that includes hundreds of suppliers that have committed to principles, policies, and practices that improve the quality of life for their customers, employees, communities, and the planet.
Make charitable contributions. Choose organizations in your community that are making an important difference for the environment, and make a commitment to support them. You can do so by providing donations, local promotions, and sponsoring fundraisers that encourage environmental consciousness.
Prioritize recycled products or packaging. Most businesses purchase many products, such as paper, paper towels, toilet paper, and cleaning products. Make a commitment to purchase products that are made from recycled materials. Also, if you package or ship products for customers, look into recycled or recyclable packaging. By avoiding plastic in favor of paper or cardboard packaging, you’ll minimize your carbon footprint and keep more plastics out of the landfills.
Committing to sustainability doesn’t have to overtake your business strategy. In fact, taking just one of the steps above can benefit your company. Over time, you can look for opportunities to adopt more sustainable practices, based on your business goals and availability of resources. Rather than getting overwhelmed with the need to implement sustainable business practices, try to be inspired by the possibilities for building your business while making a positive difference on the world around you.
Looking for more inspiration or assistance in transforming your sustainability ideas into realities? Contact your Relationship Banker or get in touch with Santander Bank today; we’d love to help.
1. Bekmagambetova, Dinara. “Two-thirds of North Americans Prefer Eco-Friendly Brands, Study Finds,” Barron’s. Jan. 10, 2020.
2. “The Shift to Sustainable Investing,” FundX. Jun. 10, 2021.
3. Eccles, Robert, et al. “The impact of corporate sustainability on organizational processes and performance,” Harvard Business School study.
This article is intended for informational purposes only. Readers should consult their own financial advisers, attorneys or other tax advisors regarding any financial or tax strategies mentioned in this article.
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