How Sustainability improves business profits

The idea that sustainability in business improves profits may not make immediate sense to many readers. Profits depend on sales and costs, a simple equation. Sustainability in business both improves sales and reduces costs, although the equation is not simple.

In business, the main components are staff, resources, customers, government, financial institutions and other organisations. Reducing costs with staff and resource consumption are the main focus for a business at the beginning of their journey to sustainability. Energy and staff are the two costs that most small businesses highlight as their highest, thus usually the first focus areas in the first Sustainability Action Plan. Keep in mind that a company with a 5% margin that reduces costs by $1000 will achieve the same profit result as $20,000 in increased sales.

Energy efficiency improvements are possible if you know where to look. Business people are busy, managing time carefully through prioritising. Sustainability has not, until recently, been identified as being worthy of high priority. Due to this changing priority, a good range of business support is available to assist in the transition to sustainability. Sustainability consultants and software solutions are developing in response to growing demand.

Reductions in energy costs are often issues associated with behaviour and management. Maintenance management of appliances such as refrigeration and air conditioning system, together with behavioural change through staff compliance on energy policy directions on refrigeration and air conditioning, is an example of a system of components working together for the wellbeing of the system. There are multiple inputs working together in the most efficient way.

Reducing resource use, mostly energy, water and waste through improved efficiencies not only improves profit, it reduces the negative impacts on the environment. The environmental aspect provides further gains in profit through building brand loyalty. The environment is a common good that belongs to society. Society values the environment because it sustains life on this planet. Staff and customers are members of society and often members of the local the community. Staff work productively in a company that implements sustainable practices, rather than for a company that does not. The sense of “doing the right thing”, of caring for the environment for future generations, develops brand loyalty with staff and consumers. This is the basis of Corporate Social Responsibility (CSR).

Trusted brands attract more sales than competitors. Maintaining trust depends on sharing the progress towards sustainability. Sustainability reports are the market mechanism of providing information on company sustainability. The most common standard is the Global Reporting Initiative (GRI), based in Amsterdam. The GRI is voluntarily used by companies globally to build brand trust with CSR and in some cases to comply with government guidelines and legislation.

GreenKPI - sustainability

GreenKPI is Australia’s first automated sustainability software www.greenkpi.com.au designed to provide time and cost saving solutions for businesses of all sizes. For as little as $11 per month, the Topic “Energy” is available to support energy savings typically around 25% in the first year.

Sustainability is an ancient concept that is as crucial today as it has been since the first spark of life began on this planet began.

Author:

Johanna Kloot

Principal GreenKPI

johanna@greenkpi.com.au

www.greenkpi.com.au

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