How an Environmental Vision Translates into Bottom-Line Value

Oct. 31, 2008
The most important benefit of creating an environmental vision is that it allows management to take a moment and re-evaluate the company's operating model.

It is a common business misconception that being "environmental" or "green" is a cost to business and adds no value or bottom-line benefit. In fact, in today's cost conscious and energy expensive world, nothing could be further from the truth. An environmental vision and subsequent initiatives are essential components of a strategic and competitive business unit.

The bad news is, if you don't have an environmental vision in place, you are behind the curve and at a competitive disadvantage to your peers. The good news is, creating a compelling and profitable vision is a task that even small and medium sized businesses can accomplish quickly, effectively, and economically. This article will enumerate a few key reasons why an environmental game-plan is a critical business requirement and will further link this vision to bottom-line value.

Haste Makes Waste

Before going into specifics, it's probably easiest to think about environmental initiatives using a quick golf analogy. Imagine you are playing a round at the local club on a busy Sunday afternoon. As you are approaching the green, if you walk up to your ball feeling a bit hurried by the weekend crowd and just swing without taking a moment to set up or think, you and I both know where the ball will end up-in the rough, the sand, or worse. But, if you take 30 seconds, literally 30 seconds, to think about your approach, visualize where you want to land the ball, and relax, odds are you'll land on the green. It's a small investment of time and thought in preventing impending catastrophe. That is how you need to think about environmental initiatives at your company. If you take a few minutes to develop a plan and think about its impact, you can avoid costly mistakes and prevent having to or"hit out of the trap" or "search for your ball" in the trees.

Where to Begin

While the prospect of developing an environmental plan and vision seems daunting, it's really a relatively easy task if it's taken seriously. It's a process that management at any sized company in any industry can execute against. Ideally, this initiative should be tasked to a senior executive who is well regarded in the organization and has influence to push priorities. After all, it's only with the support of senior leadership that the financial imperative of any initiative can be communicated-a leader is required. If management has too much on their plate or needs help in developing a framework, there are small consultancies that can help develop a roadmap for these types of initiatives. Once a program is in place, there are three key benefits which directly impact the bottom line.

Identification of Cost-Saving Opportunities

The most important benefit of creating an environmental vision is that it allows management to take a moment and re-evaluate the company's operating model. Rising energy cost is a reality that is here to stay, and the days of cheap fuel, electricity, oil, etc. are gone. Energy is now a critical business input that must be considered, calculated, and optimized. By taking a thoughtful and measured approach to energy consumption many opportunities can often be identified for bottom line cost savings. Some solutions might be as easy as adjusting the heat or turning out the lights; others, more analytically rigorous as reconsidering logistics and distribution strategy.

Value to Shareholders and Investors

While many view environmental initiatives as "nice to haves", there is no denying that the topic gets a lot of press in the media and trade publications. It is a popular topic for a reason. Investors want to see that your business is run as efficiently as possible and that you have short-term, as well as long-term, goals and plans. Having a sound environmental vision which reduces energy and material consumption and saves money is something that signifies a long-term commitment to cost savings. This is something that more and more shareholders are demanding. If you don't have a plan in place, your shareholders will wonder why.

Satisfaction and Retention of Employees

Probably the most overlooked reason to develop an environmental vision is the satisfaction, and ultimate retention, of employees. You know it is expensive to hire and retain great employees, and even more expensive to find and train new ones. Many workers are interested in environmental issues and feel empowered when their company pursues a vision that they believe in. Furthermore, workers will often rally around environmental initiatives and go above and beyond their normal roles and responsibilities to drive and execute programs that they feel have both economic and social value. Don't underestimate the power that these types of initiatives have on workforce moral.

The New York Times recently quoted an industry expert as saying that "environmental vice presidents usually spend company money, but [a] new breed is helping companies make money." Another follows up by adding that, "what started out as a compliance job has evolved into one that guards the value of the brand." If you don't have an environmental vision in place, now might be a good time to start thinking about rolling one out for the new year.

Steve Birndorf is an independent sustainability consultant who creates environmental visions and plans. He has worked for such firms as Coca-Cola, Disney, Nestle, Dreyer's, Genentech and Network Appliance.

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