Cutting Costs While Saving the Environment: What Businesses Can Do

Jori Hamilton is a writer from the pacific northwest who is passionate about environmentalism and social justice issues. You can follow her on Twitter @HamiltonJori

Posted on Wednesday 4th September 2019
Windmills spread out across a plain

Climate change is one of the most important issues facing the world today. With a near-constant stream of articles and reports stating that the timeline in which climate change can be reversed is narrowing, the pressure for businesses to do something is mounting. Many companies are reluctant to embrace the sort of large-scale changes needed to combat climate change, citing cost as a major issue. 

However, there are many ways that various businesses of nearly any size can combat climate change. They can save the environment while not only maintaining profitability, but even cutting costs.

Identify Major Issues

When attempting to reorganize a business with the goal of cutting costs and becoming more eco-friendly, the first step should be to identify major issues. Understanding the ins and outs of a business’ operating expenses can highlight areas in which improvements can be made. While payroll and rent aren’t generally things that a business can cut costs on, inventory, equipment, and energy consumption definitely are.

One of the major operating expenses that many businesses across a multitude of sectors face is lighting costs. Switching to energy-efficient LED bulbs can save businesses not only on energy consumption but on maintenance as well. LED bulbs use less energy and often last over 10 times longer than their incandescent counterparts. Companies from Home Depot to Wal-Mart and Caesars Entertainment have all made the switch over the last decade, saving the companies money and consuming far less energy.

Businesses that work within the industrial field have a far bigger enemy to contend with in regards to energy consumption. The battle with friction is responsible for a fifth of all energy consumption in the industrial sector, with even more energy being devoted to the resulting maintenance of worn parts. By using high-tech industrial lubricants and advanced materials, industrial businesses could reduce costs associated with friction by 25% in 15 years.

Inventory Management

If a business offers physical products, they will have a warehouse in which they store their inventory. Businesses can make their warehouses more eco-friendly in a variety of ways, from recycling shipping storage materials to rethinking what is used for packaging overall. Switching from plastic to biodegradable materials cuts down on cost through weight reduction and reduces the environmental impact of the supply chain.

Apart from recycling materials used in shipping and storage, businesses can also save a significant amount of money through upcycling used shipping containers. Buying used shipping and storage options like pallet containers and metal bins is much more affordable than purchasing them new. Additionally, by purchasing used containers, businesses further reduce their carbon footprint by sidestepping the need to produce brand new containers.

Of course, improving inventory management to be more environmentally conscious doesn’t have to revolve exclusively around recycling or upcycling. Implementing advanced inventory management systems will help businesses optimize their inventory management, saving them money. They can also work to reduce the overall waste generated. Inventory management systems stop businesses from over- or under-ordering products, ultimately preventing shrinkage and thus waste.

Allow Employees to Telecommute

One of the absolute easiest ways that a business can both work to become more environmentally friendly while also saving money is by allowing employees to telecommute. A single employee that telecommutes can save a company around $10,000, and businesses that have at least 100 employees spending only half of their time working from home can save $1 million on expenses each year. Employees that telecommute are also shown to be more productive and are 53% more likely to work more than 40 hours per week than in-house employees.

Over 75% of workers that commute to their job do so by driving alone and commute times are at an all-time high of 26.9 minutes. By letting employees telecommute rather than come in physically, businesses are able to make a serious environmental impact by keeping individual cars off of the road. This, in turn, also saves employees money by reducing the amount that they will have to spend on fuel, maintenance, and other travel-related costs.

Another way that telecommuting saves businesses money and protects the environment is by reducing overall maintenance and utility costs. When employees work from home, they are using their own equipment and utilities, and any business with telecommuting employees are saving energy. Businesses that have mandatory telecommuting days can make an even larger impact by minimizing water and energy usage on those days.

Invest In Sustainability

Finally, investing in sustainability is an incredibly effective long-term strategy for making a business more eco-friendly and profitable. While reducing energy consumption in small ways will certainly make a dent in operating costs and carbon footprint, adopting an overall sustainable business strategy is far more effective in the long run. This essentially restructures a business from the ground up with sustainability in mind.

Investing in wind, solar, and geothermal energy isn’t exactly uncommon, even among the largest companies in the world. Corporate giants like Nike, IKEA, and Hershey are all making concerted efforts to reduce their greenhouse gas emissions, with IKEA going so far as growing into a net energy exporter by 2020. It is especially important that these business giants are embracing sustainability, as it sets a precedent for companies of all sizes to follow suit.

Making these investments isn’t merely about environmental protection or improving public perception. There is also a huge monetary incentive for making these changes in the form of substantial tax credits to businesses making investments in sustainable energy. These energy-efficiency tax credits are especially valuable to smaller businesses as they reduce the financial stress of operating a business in a way that isn’t felt by much larger companies.

Businesses that want to become more environmentally conscious don’t have to break the bank to do so. Identifying and addressing environmental concerns that businesses face is the first step. Businesses can then begin to implement things like telecommuting and optimized inventory management to further their impact. Finally, investing in green renewable energy offers great tax incentives while also helping the environment. 

Going green isn’t hard, and it doesn’t cost nearly as much as many companies think it does. Get started now to start reaping benefits for both yourself and the planet.

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