Just like a wave of companies has responded to consumer demand by producing organic, healthier products, another wave of companies is also responding to growing demand for more environmentally-friendly business practices by “going green.” But what exactly does it mean to be green? And why are so many businesses making the change?
Going green involves making relatively environmentally-sustainable changes to a company’s policies or work procedures. This kind of change can be as simple as mandating that all lights be turned off when no one is in the office, or as major as switching to alternative biofuels to power airplanes – a commitment that both United and Southwest Airlines have made. With such a wide definition of “green,” it’s pretty easy for almost any company to say that they are making the change to environmentally-friendly policy.
However, there are a number of incentives for companies to make more sweeping sustainable changes. State and federal tax credit incentives are available for a variety of ecofriendly policies, such as the alternative motor vehicle credit for businesses who use hybrid company cars. Businesses can also take a tax credit up to 30 percent for the use of solar and wind energy as opposed to traditional energy sources.
There are more business perks for making changes than just tax credits; general waste-reducing techniques can save companies big time in the long term. Switching to electronic communication instead of paper saves on printing-related costs, like paper and ink. Turning off lights and setting policies for saving water cuts down on utilities costs. Refilling recyclable ink cartridges instead of buying new cartridges costs a fraction of the price.
But despite all of the cost-cutting opportunities that going green presents, it is not the number one reason that companies are making the switch. An MIT survey of global leaders, executives, and managers, investigated the top reasons for a business to make sustainable changes. The most important reason? The company’s brand image.
Generation Y, or the Millennial generation, makes up the largest living generation in the world – with the largest buying power. Millennials show a particular interest in environmentally-friendly businesses, making up almost 75 percent of the people who say they would pay extra for environmentally sustainable products, according to a 2015 Nielson study. That same study showed that 66 percent of consumers globally (no matter their generation) would pay extra for environmentally sustainable products.
Moreover, a Harvard Business School study shows that U.S. businesses classified as “high-sustainability” regularly outperform those classified as “low-sustainability,” showing the impact that the perception of being environmentally-friendly has on business.
It’s no wonder, then, that businesses cite brand image as the number one reason to make the change to sustainability. The promise of better sales due to higher consumer demand in addition to tax incentives and money-saving waste-reducing policies makes “going green” an appealing option.
But these reasons miss the intrinsic reward of making the sustainable shift: maintaining the environment. At its core, going green is about saving the world’s resources before they are irreparably depleted, in order to preserve its ecosystems and habitability for future generations. While many businesses seem only to care about the bottom line, more and more new companies are being founded on the altruistic desire to preserve the planet. And these are the companies that will emerge at the forefront of the wave of companies going green.
Genexa is proud to announce that we are now officially certified BioPreferred by the USDA, so customers can trust that our product packaging is biobased. Biobased products contain renewable biological ingredients, derived from plants and other sustainable materials. Genexa is committed to environmentally sustainable business practices, and as a certified B-Corp, believes in using business as a force of good.