Why it pays to go green

02 October 2007
Why it pays to go green

Making your business more sustainable not only saves you money, it can also win you customers looking for companies with green credentials

Reducing your carbon footprint and making your business more sustainable is not just good sense but good business sense, as you can also make some very healthy savings. While some will be clear, some are less so, but the ultimate bottom-line savings should speak for themselves.

One area where big wins can be made is utilities. As energy efficiency body the Carbon Trust puts it: "Saving energy is one of the simplest ways to increase profits without the need to increase sales." Put simply, the less you use the more you save, both in terms of bills and Climate Change Levy (CCL) fees. Simply turning off computers and lights when not in use will save you cash as well as carbon. Fixing leaks and dripping taps and introducing more water-efficient toilet systems will also deliver noticeable savings.

So what kind of savings are we talking about? Apex Hotels' environment director Jo Harbisher says the company's savings "are measured in the hundreds of thousands".

The Carbon Trust reckons the UK hotel and restaurant industry could relatively painlessly hack its £1b-plus annual energy bill by 20%, or more than £200m. And the Hospitable Climates programme, run by the Institute of Hospitality on behalf of the Carbon Trust, reckons its 5,000 participants save £13m a year in energy costs. At a time when utility costs have been spiralling there's even more incentive to reduce consumption.

The same goes for water. Getting a grip on the cost of water consumption to your business can be tricky. Envirowise, which offers advice on reducing water waste and offers free on-site resource-efficiency reviews, estimates that the "true" cost of water to a business can be more than three times the amount it pays to the water company because of related costs such as the cost of waste water disposal and sewerage. The good news is that simple and inexpensive water-efficiency measures could save businesses 20-50%.

While savings are less for waste management they're still tangible, and Hospitable Climates reckons a targeted waste disposal strategy can reduce disposal costs by a quarter.

In transportation, change is being driven by the Government, which wants 5% of motor fuel to be biofuel by 2010, while in London a new low emission zone for lorries will be introduced in the capital next February (www.tfl.gov.uk/lezlondon).

Add increasingly strict legislation to rising fuel costs and it's a good time to look at "greening your supply chain" and making your transportation and deliveries more efficient.

Becoming a more sustainable, responsible business can also help you attract the right staff and reduce recruitment spend. A recent YouGov poll found that about 70% of workers in London wanted their employers to have sound environmental policies.

More fundamentally, the marketplace is changing. Increasingly environmentally aware consumers are making more and more purchasing decisions based on a company's green credentials. Consumers are also more willing to pay a premium for greener alternatives.

Geoff Lane, partner, sustainable development, PricewaterhouseCoopers, points out that it's not just individual consumers driving this now, but corporate customers who want the hospitality firms they use to be up to speed on these issues. Fail to make the sustainable grade and you could lose some big clients.

With increasing green taxes and regulations coming in across the board, businesses which don't tackle sustainability now are only storing up troubles and financial woes for the future as they fall foul of legislation like the Climate Change Levy, for one.

The basic message then is that if you don't act now you will not only miss out on potential cost savings and a slice of the growing green pie, but risk becoming a dinosaur in the years to come. "You need to look at sustainability now," says Lane. "It's not a passing fad and it's not going to go away."

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