When a business calls itself green, what does that mean? The answer may vary from energy-efficient to local or even socially responsible. According to business schools and thought leaders, the definition is boiling down to a new bottom line: the triple bottom line.
This triad can be described in several ways: people, planet and prosperity; economy, environment and equity; or, economic, ecological and social responsibility. Regardless of terminology, the successful businesses of tomorrow are embracing sustainability as a fundamental element. It should not be separate from business strategy and operations; it is about integrating social and environmental concerns into business strategy and operations.
The benefits of a more sustainable approach for a business range from lower operating costs to increased sales, more productive workers, improved brand image and even lower risk.
In a comparison of trash and recycling rates for businesses in the City of Boise, a 3 cubic yard recycling dumpster costs $49.60 per month versus $68.31 for the same size trash container. This equates to paying 38% more for trash. Reducing waste in a business has solid economic benefits, conserves resources and preserves land.
Energy-efficiency improvements can also lower operating costs as well as qualify for a range of incentives and often have hidden benefits of health, safety and thermal comfort. Leaky ductwork and heating equipment not only wastes significant energy, but can draw contaminants into the indoor air we breathe. Inefficient lighting wastes electricity and produces unwanted heat yet could be qualifying for incentives from Idaho Power. Their “Easy Upgrades” such as light bulbs, fixtures and sensors as well as a wide range of building retrofits can result in payouts of up to $100,000 per year. Combine these incentives with federal ENERGY STAR tax deductions and lower utility costs and the ROI just gets better and better.
Walmart and other retailers have found that simply adding daylight in stores increases sales and lowers electricity consumption. The benefits of daylight are further supported by studies such as the 1999 report by the Heschong Mahone Group of the Capistrano school district, which showed that students with the most daylighting in their classrooms progressed 20% faster on math tests and 26% on reading tests.
Further reasons to integrate sustainability into business are brand image and lower risk. More and more consumers are making purchase decisions based on the social and environmental responsibility of a business. According to the EcoPulse study released in June of this year by The Shelton Group, 60% of the population says they’re seeking out green products and 66% say they’re either spending more or as much on green products as they were before the economy tanked.
Going green now lowers business risk in the future. Consider the risks of changing carbon regulations, mold, radon and carbon monoxide. Fireman’s Fund was the first insurance company to offer green insurance to commercial policyholders in 2006 and has since expanded their green offerings to hybrid upgrade auto insurance and a 5% discount on yearly premiums for owners of LEED-certified homes. Why offer a discount? One reason is that LEED Certified Homes are required to incorporate indoor moisture control measures into construction. This mitigates risk of mold. According to an April, 2009 article in the Wall street Journal, almost two dozen insurers offer premium credits and discounts for owners of green commercial and residential buildings.
In 2007, the United Nations and ICLEI (International Council for Local Environmental Initiatives) ratified the Triple Bottom Line standard for urban and community accounting in the public sector. In the private sector, social and sustainability reporting is becoming commonplace in Europe and with organizations such as HP, Starbucks, McDonald’s, Ford, Intel, Proctor and Gamble, Nike and Pacific Lumber. Locally, citizens are demanding this sort of reporting. In May, Idaho Power shareholders passed a resolution directing the Company to develop a plan for reducing its emissions of greenhouse gasses. Although the resolution was advisory in nature, Company management agreed to be bound by it and will have its greenhouse gas reduction strategy report prepared by September 30, 2009.
Can you afford to wait until shareholders demand sustainability? A few years ago, Dupont CFO Gary Pfeiffer observed that “Dupont has reduced its environmental footprint by 60%, and increased in shareholder value by 340%. Can I prove that those two facts are correlated? No. Do I have any doubt they’re correlated? No.”
Adopting a triple bottom line approach now sets a business apart as a leader in consumer’s eyes and results in economic, environmental and social benefits that contribute towards a more sustainable future for all of us.
Sharon Patterson, LEED AP, is Chair of the US Green Building Council Idaho Chapter and a Grow Smart Award winner. Her work has been covered by a range of media including “Professional Remodeler Magazine” and “The Complete Idiot’s Guide to Green Building and Remodeling.” Patterson owns Eco Edge, a sustainability and green building consulting firm in Boise.