Conventional wisdom says that you can’t have it all, that you have to choose. You can’t have your cake and eat it too, or so they say. This is the basic thinking of those who still believe businesses can’t go green and make money too, that going green costs a great deal of money, takes time, and is a luxury that successful businesses cannot afford. The problem with conventional wisdom is that it’s not always right. A February 2008 report from the Economist Intelligence Unit found that businesses paying more attention to sustainability issues fare as good as, if not better than, those that do not. You can make money and do the right thing for the environment, and more and more businesses are doing it all the time.
Rather than costing more, going green can help businesses save money, starting in their buildings. Our buildings waste enormous amounts of energy overall, contributing to climate change, pollution, and resource depletion. A 2008 report from the Commission for Environmental Cooperation confirmed that greening our buildings is one of the most cost effective ways to fight climate change. The opportunities to improve buildings include using energy-efficient lighting, better insulation, natural lighting, cool roofing, and more efficient heating and cooling systems. The U.S. Green Building Council (USGBC) has found that green buildings certified at the LEED (Leadership in Energy and Environmental Design) Gold level can reduce overall energy costs by 50%.
In addition to reducing energy costs and helping the environment, green buildings are also a great investment. Although dogma holds that going green makes a building much more expensive, the overall cost of green buildings is estimated to be 0-5% higher than other buildings. Green buildings certified at the USGBC LEED Gold level command higher rent, $11.24 per square foot higher on average, and have a higher occupancy rate (National Building Institute, and the CoStar Group). Green buildings also sell for more, creating more value for businesses.
Wasted water and other resources are also significant environmental problems businesses are acting on. Water supplies have often been taken for granted, but they are increasingly precious in many regions. Wasting resources often costs a business twice; once to purchase the raw material, and again to dispose of it. Ray Anderson, founder and Chairman of Interface Inc. floor covering company, has committed Interface to move toward sustainability, in part by reducing waste. From 1996 to 2006, Interface reduced manufacturing waste going to landfills by 70% and reduced water consumption in production facilities by 62-80% even as the company grew greatly in size. The reduction in waste helped Interface save over $336 million during this time period.
Sometimes reducing waste requires an investment, but the investment in efficiency and waste reduction quickly pays for itself. Efficiency improvements such as sealing air ducts and using more efficient light bulbs can pay for themselves in as short as a few months to 2 or 3 years, providing a much higher rate of return on capital than is possible with most other investments.
A piece of less conventional wisdom holds that every problem contains an opportunity. When it comes to green businesses, this is sounding less crazy all the time. All of the environmental problems we face are also business opportunities for those who are ready to take them on. Coal-fired power plants are causing climate change? Develop and produce cheap renewable energy and investors will beat a path to your door. Not enough clean water for farms and cities? Develop, produce, and market technologies to use the water we already have more efficiently. Our buildings are inefficient? Get to work capturing that wasted value by retrofitting millions of homes.
The list of opportunities is as long as the list of problems we face. Entrepreneurs taking on these challenges are both making money and making a difference in our world. You don’t have to choose one or the other. When it comes to going green in business, you can both help the world and build a strong business at the same time.
This article was written by Glenn Croston, author of 75 Green Businesses You Can Start to Make Money & Make a Difference. It originally appeared on www.evancarmichael.com.