Does it make business sense to be more environmentally friendly?

Historically, businesses have perceived being environmentally friendly as a costly and inconvenient endeavour. However, the tables are beginning to turn and many companies are now realising real value in paying attention to their carbon footprint.

As the world faces rapid climate change, millennials (individuals born from 1977 to 1995), and Gen Z (the successive generation), are acutely aware of the impact their consumption practices have on the environment, and how little time we have to make amends.

From reusable shopping bags to electric cars, consumers are increasingly understanding their responsibilities to the environment and demanding more from their products, and in turn, the companies producing them. People are more willing than ever to adopt an eco-friendly lifestyle—and they are prepared to pay for it too!

So, how exactly can sustainable, environmentally friendly practices be a lucrative prospect for businesses?

Figures from a 2015 study suggest that while 66 percent of global consumers are willing to pay more for sustainable goods, a full 73 percent of millennials are. Despite the fact that millennials are coming of age in one of the most difficult economic times of the last century, they are willing to pay more for sustainability.

This is new. Until now, product sourcing had little to no effect on consumer choices. Perhaps this shift has something to do with today’s consumers considering their purchases as part of their wider lifestyle—people are looking for experiences, not just a product. This creates a relationship between their buying choices and whether or not they are in alignment with individual feelings and values.

With tougher international and local regulations, and the increasing costs of fossil fuels, the business world has more than image as an impetus for adopting more environmentally friendly practices. Big industries such as construction, automotive, electronics, and tourism are all feeling the squeeze of increasing energy prices.

More and more companies are looking to reduce their carbon footprint by reducing waste, recycling, and being more economical with their use of materials, all of which can also lower costs. Many companies are even using software to create supply chain models which can identify sources of emissions, the financial implications associated with them, and how opting for alternatives can help them achieve their sustainability goals. Other ways businesses are achieving monetary and environmental savings have been to introduce cloud storage instead of traditional paper archives, and using technology to connect with global partners, rather than physically travelling to meetings.

Studies suggest that consumers are actively avoiding companies who have a poor track record with the environment, so, if you are actually making efforts towards sustainability, it is crucial that you communicate that to your patrons. Share your green practices, whether it is your use of electric or hybrid cars or planting trees to offset your carbon emissions. However, do not make false claims—be credible, and you can promote your eco-friendly practices in order to successfully set your company apart from the competition.

Even if your actions are entirely motivated by profit, consumers will reward your environmentally responsible efforts. So, whatever you decide the best route towards sustainability is for your company, being green makes sound business sense.