The steps you take to improve the sustainability of your small business won’t just reduce its environmental impact, although that’s likely motivation enough for a responsible business owner. You also will reduce inefficiencies, cut costs, and enhance your brand’s reputation.
There are four simple steps to beginning to operate your small business sustainably. First, we’ll look at what business sustainability is and why it benefits your company. Then we’ll walk you through the steps to achieving it.
What Is Business Sustainability?
Business sustainability is an approach to business management that seeks to reduce a negative impact on the environment stemming from business processes and products. It pursues this objective by applying environmentally responsible strategies to all phases of business operations, including:
- On- and off-site resource usage, including how you organize work, production, and other functions.
- Supplier sourcing by identifying environmental and social criteria for each of your key suppliers.
- Product and packaging materials selection to reduce the use of natural resources.
- Inventory management and logistics methods to minimize your overhead and keep products close to the customer.
- Marketing and sales strategies that help customers identify your sustainable products and services.
To promote more environmentally-aware procedures in these and other areas, business sustainability strategies use methods such as:
- Using more environmentally friendly resources, including switching to renewable energy and sustainably grown raw materials.
- Reducing resource consumption, from the simplest changes such as stopping the printing of documents to reducing the amount of metal or plastic in a product.
- Reusing products, supplies, and equipment to extend their useful lives and keep waste out of the landfill.
- Repurposing products, supplies, and equipment for other uses when they reach the end of their initial life.
- Recycling items that you can’t eliminate, reuse, or repurpose.
These tactics support sustainability strategies that can help you create a business model that reduces negative effects on the environment.
How Sustainability Benefits Business
Beyond benefiting the environment, sustainability strategies help businesses that adopt them in multiple ways. The simplest steps include:
- Optimizing resource usage to increase efficiency and reduce waste.
- Cutting costs such as utilities by switching to more efficient lightbulbs and turning off computers overnight.
- Building a greener reputation for your brand by sharing environmental impact information with your customers so they can choose the least harmful products and services.
These benefits are tangible and deliver measurable financial results. For example, doing an inspection to identify ways to save energy can reduce a commercial building’s energy consumption by 15% or more, according to the Environmental Protection Agency. More than 70% of consumers would pay an average premium of 35% to support brands that are sustainable and environmentally responsible, according to research conducted by technology provider IBM and the National Retail Federation, a trade organization.
How to Develop a Sustainability Strategy
The process of developing a sustainability strategy can be broken down into four major steps:
- Review your resource usage, starting by measuring the energy, materials, and other things your company consumes in the course of business.
- Set sustainability goals based on an understanding of your current resource consumption.
- Implement resource conservation strategies, such as recycling manufacturing waste and reducing power use in the office and factories.
- Track performance and share your progress with employees and customers.
Here’s a description of what goes into each step and some tips for how to implement these steps effectively.
1. Review Resource Usage
The first step is to assess your current usage of natural and manufacturing resources. This should be done using benchmarks defined by measurable key performance indicators (KPIs), such as:
- Energy consumption (watts per hour, per unit of production, or per $1,000 of revenue)
- Recycling rate (tons of solid waste recycled per tons of solid waste generated)
- Water consumption (cubic meters of water per ton of production or another unit of production)
- Carbon footprint (tons of carbon dioxide generated per year)
These are just a few examples of useful KPIs to measure your progress toward reduced resource usage. A professional consultant can help you conduct a comprehensive energy audit and determine which KPIs are most relevant to your company’s resource usage patterns.
Wondering about how to assess the building where you work? The EPA’s ENERGY STAR program provides an online tool called Portfolio Manager to help you benchmark the energy usage of any building.
2. Set Sustainability Goals
Once you’ve established your current resource usage in terms of KPIs, you can set measurable sustainability goals. When setting goals, prioritize outcomes that will have the greatest impact on your environmental impact, energy efficiency, and utility costs. But consider that small changes, such as switching to paper made with sustainably forested wood fiber, can start your contribution to a more sustainable economy.
For example, let’s say your energy audit reveals that your biggest utility cost is lighting. You might set a goal of lowering your lighting usage to a defined benchmark and begin by switching to efficient light-emitting diode (LED) lighting.
3. Implement Resource Conservation Strategies
With measurable goals in mind, you can explore and implement strategies for achieving your target benchmarks. At the broadest level, these strategies include:
- Reducing resource usage — this can be as minor as banning printouts of documents to hard changes such as using less metal to make your product.
- Shifting to more sustainable resources, including renewable power and bio-based fuels or plastics.
- Reusing the size and number of packages your product uses.
- Repurposing items that have outlived one use — from turning an old smartphone into a security camera to reselling manufacturing waste to a new customer.
- Recycling and donating used materials and office equipment to keep them in use longer.
Within each of these broad categories, you can develop more specific tactics. For example, if your specific goal is to reduce electricity usage from lighting, you might consider strategies such as upgrading to LED bulbs, using dimmers, or installing motion sensors. Be sure to add a way to measure the impact of your changes.
4. Track Performance
Once you’ve begun implementing some resource conservation strategies, it’s critical to track your performance on an ongoing basis. This enables you to assess whether your strategies are achieving the results you want. If they are, you can leave them in place or further optimize them. If they aren’t, you can test adjustments and try alternative strategies.
To build performance tracking into your sustainability strategy, create standard operating procedures for reviewing your performance periodically. For example, you can generate a monthly report summarizing your performance on your target KPIs and assign a designated sustainability manager to review the results and follow up.
Implement Sustainability Strategies to Promote a Greener Brand
Business sustainability strategies seek to reduce the negative environmental impact of business activity by applying methods such as resource management, reusing, repurposing, and recycling. This benefits not only the environment but also businesses themselves by optimizing efficiency, cutting costs, and building a greener brand reputation.
A systematic approach to sustainability starts by reviewing current resource usage. Establishing a baseline will help you set goals and develop corresponding strategies as you and your team learn to be more sustainable. Track your results and test improvements to ensure the effectiveness of your sustainability strategy. Putting these steps into practice will help you reduce your company’s negative impact on the environment while making a positive impact on your operational efficiency and brand reputation.
About the Author
Roy Rasmussen is a contributing writer for Fast Capital 360, an online lending marketplace. He has been a writing and marketing consultant since 1996. Before becoming an independent consultant, he worked as a writer, editor, and proofreader in the financial services and insurance industries.