Being an entrepreneur is much like being a parent. You want to see your business grow and prosper to the extent of it becoming mostly self-sufficient so that one day, once the roles have been reversed, it may take care of you instead. At the same time, you also want it to become a respectable member of society that takes full responsibility for its actions and puts the interest of others (and the common good) in front of their own. Namely, we’re referring to the use of green, renewable energy and the duty of every company, both big and small, is to search for new, eco-friendly ways of doing business for the sake of our children’s children. Now, this may seem like a burden too heavy to bear for a small business, yet here’s why it’s so important.
Since the fall of the Berlin Wall in 1989, the free market has become the dominant mode of trade across the globe with little to no intervention on the government’s part. However, the economic crisis of 2008 showed exactly how flawed this laissez-faire approach to trade was and how, when left to fend for itself, the market could not solve its own problems. The same goes for sustainability in the business sector where the lack of regulations does not warrant the use of non-renewable energy and fossil fuels. In other words, just because you’re permitted to do something doesn’t necessarily mean it’s okay. In the long run, if companies don’t take responsibility for their actions we’ll have yet another global catastrophe on an even greater scale which could cause irreparable damage to the whole planet. According to National Geographic, if global warming continues, by the end of the century sea levels will rise between 18 to 59 centimeters (with another 10 to 20 centimeters if the polar ice caps melt). Therefore, it’s now or never for companies to switch to a cleaner and more efficient method of energy consumption.
Now, if we forget the ethical dilemma of it all and take it from a strictly business point-of-view, going green makes perfect sense. According to a recent survey conducted by the Danish green energy company Ørsted, 82% of respondents want a world fully powered by renewable energy; so much so that they’d even chose a competing brand if they offered an eco-friendly solution. Meaning, businesses that do not implement green solutions into their business models are in fact losing a good chunk of their consumer base. So how does one measure their company’s ability to manage its carbon footprint? Simple, with the use of ESG Criteria.
What is the ESG Criteria?
ESG is short for Environmental, Social and Governance (Criteria) and it’s is a collection of norms with which investors evaluate a company’s influence on the environment, its carbon emissions, water and waste conservation efforts, as well as their community involvement, human rights policies (Social), shareholder rights, anti-corruption policies (Governance), and so on. Moreover, these key performance indicators are also used to screen companies for potential risks caused by bad ESG practices, meaning they aren’t there just for the sake of ethical principles. For example, the Deepwater Horizon oil spill plummeted the company’s stock prices which resulted in billion-dollar losses for investors; the same is true with Volkswagen’s emissions scandal. Hence why so many companies nowadays seek ESG consulting services to help them get compliant with these safety standards to attract new investors and ultimately grow their businesses.
Ways of Improving Sustainability
Now that we’ve got the theory covered, are there actually any practical ways that sustainability can help small businesses grow and expand? For one, upgrading your lighting design will not only lower the cost of energy consumption, but will also increase your worker output and reduce the number of sorting errors, as reported by this article where a mail-processing center in Reno, Nevada, saw a 6% increase in efficiency. The same goes for heating, cooling, and ventilation systems where newer (smaller) versions are more energy-efficient and require less annual maintenance than those bulky models dating back from the Cold War.
Another major topic in regards to improving the sustainability of your small business is waste disposal. Can the items in question be repaired, recycled, or re-used in any shape or form? If so, then find ways to implement these into your daily business practices. Never underestimate what a good roll of duct tape can do. Solving such minor problems, even temporarily, will lower the cost of operating and help you find a more permanent solution. In addition, you can sell off all the excess, or leftover, raw material you have to another company instead of letting stuff go to waste. For example, the Chuao Chocolatier brand, which specializes in making chocolate bars with salted potato chips and pretzels in them, sell off their leftover raw food ingredients to an animal feed company—pretty smart huh?
To sum up, running (and growing) a small business is more like a marathon than a typical sprint. Basically, you want your company to stand the test of time and weather any difficulties it may come across, no matter the challenge. In the long run, sustainability will do just that. There are no shortcuts or easy roads to success. This is why you need to start right now if you want to see an ROI in the near future.