A beginner’s guide to going green at work, financially and otherwise.
During these past two years of global economic crisis, executives at companies around the world have been looking for ways to increase their bottom lines. Generally, businesses are stretching the dollar, adopting a “less is more” attitude. While some have laid off employees, reduced expenses and minimized salaries, some have opted to implement green initiatives as well. From small companies attempting to stay afloat with dwindling revenues, to large companies such as Dell and Yahoo! that are initiating corporate social responsibility (CSR) practices, these businesses are benefiting in ways greater than first thought imaginable. For one, greener workplaces mean healthier and more productive places to work, which is good news for a company’s bottom line.
In the United States, small- and medium businesses (SMBs) employ half the private sector workforce and use half the electricity and natural gas consumed by the commercial and industrial sectors. According to the U.S. Small Business Association, in 2006 (latest data available), SMBs comprised the majority of the 26.8 million businesses in the country. Thus, if each SMB implemented small, simple changes, it would create a great impact on America’s carbon footprint.
Overall, the best plan for change is a comprehensive and well-known one. Proper implementation of a green program includes a detailed plan of action, proper record-keeping practices and simple, non-drastic changes. An effective plan should detail a common goal involving employees at all levels, as well as create a checks-and-balances system. This plan’s goal should go beyond simply producing less waste or saving money. Rather, the plan should be a mission statement—a guide for where the company is heading and how the change will occur. Furthermore, the plan should consider all stakeholders in a corporation (i.e., employees, unions, families, consumers, etc.). Once a plan is established, it is important to measure usage rates of energy, wastes, etc., and use these as benchmark numbers. Keep in mind, usage must first be measured before it can be reduced.
To develop objectives and record the plan’s effectiveness, employing the triple bottom line (TBL) concept is often encouraged. Triple bottom line is a term coined by John Elkington, founder, director and chief entrepreneur of SustainAbility Ltd., a strategy consultancy and independent think tank specializing in the business risks and market opportunities of corporate responsibility and sustainable development. The TBL concept holds that a corporation’s responsibility is to its stakeholders more than its shareholders. In short, TBL measures people, planet and profit, or risks derived from economic, environmental and social developments. The term “people” refers to human capital, in addition to the fair and beneficial approaches to labor and the community in which the corporation conducts its business. “Planet” represents a company’s responsibility to operate in a way that will not compromise the Earth’s resources for future generations. Finally, “profit” is the impact the company has on its economic environment—the corporation’s bottom line that is shared by all commerce and is therefore not limited to internal profits generated by a single company.
Some companies have reported that simply focusing on reporting TBL creates long-term shareholder value by analyzing opportunities (unseen and other) and properly managing risks deriving from economic, environmental and social developments. An added benefit of reporting TBL is that through it, management gains the ability to understand, measure and improve the use of resources. When reporting the TBL and financial performance of a company, two sets of record books should be kept— one to gauge financial performance and the other to measure the green program’s operations. As the same reporting methods are utilized for CSR and financial records, the best person to oversee this task would be an accountant or other financial professional. Management should also develop benchmark questions and answers that will uncover ways to measure the success and efficiencies of the program.
For example, objectives should:
- Build assets and resources and apply them to achieving goals and increasing future value;
- Create a work environment that is attractive, constructive and approachable, as well as unify the workers’ efforts;
- Determine the stakeholders’ perception of value, benchmark this information and use it to deliver sustainable value; and
- Continuously improve products and services based on these determinations.
While clarifying objectives and developing questions, a standard of core reporting elements should surface, displaying all components involved in the TBL effort for reporting across economic, environmental and social aspects. As it is important for companies to report both gains and losses on their financials, it is equally important to determine the lack of standards. Additional information regarding this topic can be found at www.globalreporting.org, an organization aspiring to make sustainability reporting routine and comparable to financial reporting.
Once management has laid the groundwork for the green program, an energy use assessment should be performed. Energy cost is one of an organization’s most controllable expenditures. The three “Rs” (reduce, reuse and recycle) can lead to substantial savings for organizations implementing an effective performance measurement system. For example, the Scottish Environmental Protection Agency recently estimated that Scottish businesses could increase their annual profits by as much as $2,000 per employee through the introduction of aggressive waste reduction, energy efficiency and recycling programs.
To assess energy guzzlers in an office building, assign someone to perform a simple walk-through of each room. Begin by analyzing your building and identifying energy guzzlers such as heated entrances, drafty windows, unused electronics or appliances and unoccupied lighted rooms, and gather data about energy usage. In an effort to reduce energy usage, try employing a few simple practices such as shutting down computers and turning off monitors, printers, fax machines, etc., every night; using energy-efficient light bulbs and turning off lights when not in use; and keeping thermostats set a couple degrees cooler in the winter or warmer in the summer. In general, SMBs could save up to 20 percent through simple initiatives that produce quick results. According to The Carbon Trust organization, this 20-percent cut in energy costs represents the same bottom-line benefit as a five-percent increase in sales for many businesses.