Experts Reveal Why This Recession is a Great Time to Go Green

By Debbie Lawes - BDC
Thursday, October 8, 2009

Cutting your energy costs can give your company a competitive advantage by improving efficiencies and your corporate image with both customers and suppliers.

It`s understandable to think this recession has put a damper on "green" or environmentally friendly business practices. Going green or staying green may be a luxury many struggling businesses simply can`t afford these days.

But while that may have been the case for past downturns, times have certainly changed. For starters, many green initiatives save companies money.

Catherine Swift, president and CEO of the Canadian Federation of Independent Business (CFIB), which represents 105,000 small businesses nationwide, says she`s seen no indication from her members that saving the Earth is taking a back seat to saving the business.

"One reason is that for smaller companies, the recession hasn`t been as dire as for large firms that are driven by the stock markets. Our members are privately owned companies, and among them, we`re continuing to see a focus on environmental practices," she says.

A 2007 CFIB survey found that energy conservation ranked as the second most important environmental issue after recycling of materials, with 83% of its members having already implemented energy conservation changes. While about half of respondents said cost savings was a factor in making changes, 81% said they were motivated by their own personal views. Swift says that trend appears to be holding.

"These companies are motivated primarily by the owner`s personal views about the importance of protecting the environment for future generations. Embracing environmental practices isn`t something you usually have to convince them to do," says Swift.

Of course, it`s always nice if a company can help the environment and its bottom line at the same time. A quick Google search will turn up thousands of web pages on how companies of all sizes can be both green and profitable.

First, there`s the low-hanging fruit, things like printing on both sides of paper, recycling, switching to energy-efficient light bulbs, turning down the thermostat and shutting off idle office equipment. Natural Step Canada (www.naturalstep.org) has a free sustainability toolkit that can be downloaded from their website. Another helpful resource is a book authored by Bob Willard entitled "The Business Case for Sustainability".

According to Willard, integrating sustainability strategies can increase profits up to 38% for large companies and 66% for small- or medium-sized companies over a five-year period. A lot of these savings can be achieved by reducing energy costs.

"If your energy costs are high, you certainly have an incentive to reduce them," says Michel Bergeron, Vice President, Corporate Relations at the Business Development Bank of Canada. "But even if they aren`t high, cutting your energy costs can give your company a competitive advantage by improving efficiencies and your corporate image with both customers and suppliers."

Tax credits and incentives for energy efficiency and other green incentives are being pushed from Ottawa all the way down to local municipalities. Most utilities now offer businesses incentives to reduce energy use. Hydro Quebec, for example, offers financial assistance for electricity-saving industrial equipment, systems or processes.

Keeping ahead of the law and public opinion
Lower operational costs aren`t the only reason to reduce energy use. All levels of government, including local, are introducing laws and regulations that will require companies to reduce waste and embrace more sustainable business practices.

For example, once cap and trade rules become more widespread, Bergeron said companies will need to be careful about how much carbon they produce.

"Reducing your energy use – and thus, your carbon footprint – should be part of any business plan. You can start with something as simple as reducing your corporate travel by using inexpensive videoconferencing technologies like Skype," he says. "But the most important building block should be an energy efficiency audit of your workplace."

Business owners that act early will find themselves at a competitive advantage when new rules are implemented.

"At some point, the consideration of environmental and social issues will be mandated, so for business this becomes a central risk factor. It also becomes an opportunity. Companies shouldn`t wait until the economy picks up," says Melissa Shin, managing editor of Corporate Knights, a magazine focusing on corporate responsibility.

Attracting a green workforce
Companies that don`t embrace environmental practices could also find themselves as a competitive disadvantage in attracting young, skilled employees. Today`s young workers are more environmentally aware than previous generations, and they`re bringing those values into their workplaces.

"BDC, for example, is heavily paper-based and this becomes an irritant for our younger employees who view paper as a waste of resources," says Bergeron. "They`re putting pressure on us to move more quickly to change our ways, and we are."

Companies that incorporate environmental responsibility into their mandate will also tend to have more loyal employees who are more willing to make sacrifices, if needed, during a recession. "Embracing environmental and socially sustainable practices is a great way to retain your staff in an economic downturn," says Shin.