Going green isn’t just better for the planet, it’s better for your business. Here’s why
Consumers, employees and investors want companies to be more socially responsible. Squeaky's Chris Bowden says businesses should act now
When president Trump announced he was pulling the USA out of the Paris Climate Agreement last month the business world reacted with dismay, with many CEOs reaffirming their commitment to tackling climate change.
They realise that taking action is not only the moral and responsible thing to do – it’s also the smart thing to do. They know they can gain an advantage because they understand the momentum behind decarbonisation is unstoppable.
The US solar energy sector now employs more workers than the coal and gas sector combined and is creating jobs two times faster than the rest of the US economy.
Here in the UK – as in many other countries – renewable energy is now the cheapest form of power and each year the costs continue to fall.
Smart businesses should be at the forefront of this movement
Leading by example and incorporating sustainability isn’t about ‘hugging trees’ – it gives businesses a competitive advantage.
A McKinsey report found that adopting green policies can create social value while also protecting and even enhancing shareholder value. While Deutsche Bank found that going green with renewable energy lowers costs and helps businesses outperform their rivals.
Large corporations like Google, Apple, Unilever and Ikea are leading the way by switching entirely to renewable energy. Increasing numbers of small and medium enterprises are following suit, recognising that it gives them an edge over their competitors.
Doing the right thing is demonstrably good for business, for instance the top brands in Havas Media’s annual Meaningful Brands have outperformed the stock market by 206% over the last decade.
Making the case for businesses to use renewable energies and go green
Consumers want it
The biggest argument for going green is that consumers want it – they want to feel good about the companies they do business with.
When faced with a choice between similar brands and offerings, customers increasingly choose those with sustainability and ethical credentials.
Unilever found that over half of British shoppers feel better when they buy sustainably made products. This is especially true of the younger generation who actively seek out brands and businesses that align with their values and are seen to be doing the right thing.
The same study also found a third of consumers now buy sustainable and environmentally friendly brands, creating a £817bn market. Making sustainability an intrinsic part of business strategy is the best way to have a share of this market since the trend is likely to rise over the coming years with a young generation of informed purchasers.
Employees want it
Increasing numbers of employees want to work for socially responsible companies. Surveys show that an impressive two thirds of people would choose to do so, even if meant accepting a lower salary.
Improving the sustainability of your business is a key way to not only attract the best talent – but also to get the most out of them. A UCLA study found that employees at eco-friendly companies are 16% more productive overall.
Hiring staff is expensive and with the average cost of replacing a staff member now more than £30,000, according to Oxford Economics, employee churn is costing British businesses £4.3bn a year.
Having sustainability as part of your business strategy will help reduce HR costs and also empower your employees to become advocates for your brand.
Investors want it
More investors are interested in investing in sustainable businesses as people and institutions want their money to align with their values.
Standard Life has previously announced that it believe this trend will grow to reach $1 trillion by 2020 – and in the US one in five investment dollars are designated for socially responsible investing.
With sustainability fully embedded into your business strategy, you have a greater chance to attract the eye of investors who wish to support your company in the long term.
The train has already left the station
The case for business sustainability self-evident, and it is coming – that’s not a matter of opinion.
As Tesla CEO Elon Musk recently said “Sustainable energy will happen no matter what. If Tesla never existed, it would have to happen out of necessity. It’s tautological. If you don’t have sustainable energy, it means you have unsustainable energy. Eventually you will run out, and the laws of economics will drive civilisation towards sustainable energy, inevitably.”
It’s worth noting that Musk quit as Trump’s advisor the moment the president ditched the Paris Agreement.
Instead of waiting for something to be forced upon them, businesses can opt in now – and buying clean energy is one of the most effective ways to do this. It makes business sense and it makes moral sense.
This train has already left the station and the world is moving on, don’t let your business fall behind.
Chris Bowden is founder and managing director of Squeaky, creator of a market which allows UK small businesses to buy directly from renewable energy suppliers in exactly the way Google does.