Affordable Sustainability: How Your Business Can Go Green and Reduce Costs

If you’re curious about the benefits of a sustainable business, you’re not alone. Yet the current economic climate has many questioning how to afford the pivot towards eco-friendly business practices.

As the UK edges closer towards the goal of Net Zero greenhouse gas emissions by 2050, many businesses are fighting harder than ever just to stay afloat. Since the Bank of England raised interest rates in June for the thirteenth time since December 2021, cutting costs is all that matters for many.

Climate friendly choices have to be kicked into the long grass – or so it seems. Sustainable fashion brands are finding ways to reduce waste and recycle materials, paving the way for a fairer economy.

Yet regulation is increasingly asking – or instructing – businesses to operate in more sustainable ways. The Plastic Packaging Tax came into effect last April, the Ultra Low Emission Zone blankets the whole of Greater London from August, and fully electric vehicles (EVs) will be the only type of new car anyone can buy from 2035.

We recently interviewed an electric fleet expert about the present and future of EVs. If you’re curious, go ahead and read his insights on the reality of electrifying your fleet.

So how are small business leaders expected to square the pressure of rising costs with the green agenda?

Well, the good news is consumers already back sustainable business practices – and some are willing to pay more than you might think.

In this piece, we’ll look at consumer habits and the regulatory landscape before asking the experts what businesses can do to go green – while staying in the black.

Conscious consumerism on the rise

Recent global health pandemics and increasingly drastic weather events are affecting the way consumers think about the environment in general. In 2021, 81% of those living in Great Britain had made lifestyle changes to help tackle climate change. It’s undeniable that record-breaking heatwaves and flash flooding are affecting how we think and act.

Yet it’s more than just the weather that’s got us changing our behaviour. With inflation topping 11% in October 2022 (only dipping down to an eye-watering 8.7% in May), cost-saving has become a bigger priority for everyone.

As prices go up, research has found consumers are looking to the longevity of the products they’re purchasing. Brits are picking up higher quality products less often, with a 20 percentage point increase in the number of shoppers buying fewer brand new goods between 2021 and 2020.

More than one in three (38%) paid extra for a long-lasting product in 2022. That’s remained consistent since 2021, showing that customers are thinking about the long-term when it comes to buying decisions today.

And around one third of consumers (32%) are willing to pay more for a sustainable product or service – across all categories. That should pour water on doubts over the pivot towards more eco-friendly products.

In fact, shoppers are increasingly looking to support more eco-conscious brands in general. In 2021, 40% of UK consumers chose brands with environmentally sustainable values. That’s a six percentage point increase on the previous year.

Greener products can save money for consumers. A recent investigation by the BBC’s Sliced Bread podcast found that reusable nappies are far cheaper than buying disposable nappies of any brand. And yes, that’s taking into account the cost of water, energy, and detergent that goes into cleaning them.

Companies more accountable

How would your company cope with half a million complaints? If Deloitte’s research is anything to go by, 7% of Britons contacted a brand in 2022 to complain about its sustainability or ethical practices. If we take the UK population as a whole, that’s 470,000 people who filed complaints.

Consider that it only takes one social media post to go viral and significantly impact a company’s reputation. If more consumers are concerned about ethical business practices today, then it makes sense to consider where you can make ethical swaps. If only for the sake of customer satisfaction and a better business reputation in the long run.

But if your customers aren’t too concerned about off-colour environmental practices, then legislators certainly will be. Of greater concern than gossip and hearsay are public investigations, fines, and court cases.

For example, grain giant Cargill is facing legal action over its deforestation practices and the knock-on effects for indigenous people in Brazil. For its part, Cargill claims it holds “unwavering commitments” to protect both the planet and human rights. If your products rely on Cargill grain, that’s going to affect your business’ reputation, too.

Not convinced? Research finds that one in two (48%) of UK consumers will judge a brand based on its suppliers. And almost three quarters (72%) are concerned about the ethics of producing the items they buy.

Yet it’s no secret that Big Farmer corporations like Nestlé and Mondelez have weathered their share of negative press storms, too. And generally the market share of these companies is so great that negative press won’t do much to hinder their commercial success.

But smaller companies – and particularly local businesses that rely on word of mouth – can hardly afford the same ill will of the community. As environmental concerns grow increasingly important to the average person, businesses must realise the cost of planet punishing practices.

An impure reputation is one thing. But financial sanctions are quite another. When Southern Water was hit with a record £90 million fine over pollution in 2021, lawyers noted how the figure reflected a lack of operational change since previous fines over the exact same problems.

Dairy Crest (producer of Cathedral Cheese) was finally ordered to pay £1.5 million in June 2022 for releasing sludge and toxic pollution that killed fish in multiple incidents dating back to 2016.

The truth is companies getting away with environmental pollution today will face the consequences tomorrow. As the UK government issues more legislation en route to the 2050 Net Zero pledge, all businesses will have to adapt.

How can businesses afford to go green?

Mounting bills are a concern for everybody. The same research that records an appetite for sustainability also finds the expense of green products is a barrier for one third of consumers.

So it’s no surprise that many business leaders are reluctant to invest in eco-friendly options. Emma Stewart Ph.D, Sustainability Officer at Netflix, has some advice for them. Speaking at a Johns Hopkins University webinar in May, Dr Stewart encouraged a big picture view of counting company costs.

“In the operations space there’s tonnes of waste,” Dr Stewart said. “[The] first port of call is to work across the company to identify that waste, whether it be in energy or refrigerants or these emissions-correlated sources.

“Optimise first – and that can be operational or that can be technological – and that’s going to buy you a little bit of economic latitude to invest into the newer technologies that still have an upfront premium.”

Dr Stewart admits she relishes “busting that myth” that the costs of sustainable initiatives are hard to justify due to few tangible benefits.

“It’s always important to delineate the total life cost – or total cost of ownership, as it’s known – of a given technology. And businesses don’t typically do that well.

“But the total cost of ownership of an electric vehicle is better than a combustion engine vehicle. So that’s an accounting question, ultimately.”

After all, every business is going to have to electrify its vehicles by 2030. Although the upfront cost of an individual EV is far higher than the average petrol car, there’s no road tax to pay on it.

Yet the shaky infrastructure available to support this shift in the UK is a widely reported concern.

However, certain companies are so determined to operate sustainably that they’ll go so far as to install their own electric vehicle charging stations at their premises. Tom Maskill of Webmart explained this as an attitude of “How can we do it?” versus “We don’t have this”.

Fortunately, the government will pay up to £350 towards the cost of installing each EV charger at your business premises. The idea is you can then offer EV charging at your workplace as a perk for employees.

True, you’ll have to shoulder those energy costs as a business. But certain business energy providers are offering special EV-charging tariffs. You could benefit from cheaper electricity rates overnight, for instance.

You could even offer a green salary sacrifice scheme, where you lease eco-friendly vehicles to your workforce. If these vehicles are used for work activities, that can help your business on its way to reducing scope 1 emissions.

Changing rules, changing mindset

“The legislation tends to encourage to start with and then force – so to speak – later,” explains Marc Lawn, Executive Vice President at Calumet Specialty Products Partners.

Lawn joined the chemicals producer as Chief Sustainability Officer almost six years ago, and led the strategic planning for Net Zero across the roughly-$3bn-revenue enterprise. Suffice to say, he has more than a little experience of leading sustainability management projects.

Pointing to the example of electric vehicles, Lawn reflects on how the UK government first offered incentives for low-emission vehicles to be followed by the ultimatum of a ban on petrol or diesel car sales by 2030.

“And generally that’s the change in psychology,” he adds. “We’ve done that bit, and we go from there.”

This backdrop of change informs the attitude of individual leaders. But obviously not everyone is on board. Lawn characterises the decision to transition to sustainable business practices as “a commitment to the business and somewhat an emotional commitment as a business owner.”

“So if the business owner or the business leader wants to do it, that’s almost enough,” he opines.

How to go greener – and save your business money

Once you’ve taken the green pill (as it were), Lawn argues you’ll quickly find a range of sustainable improvements you can make throughout your business. He describes an attitude of inefficiency spotting, where managers begin to notice and fix areas of waste.

“What all businesses need to do – in a perfect world – is get to an understanding of what their carbon footprint is today.” He suggests hiring a consultant to assist with these calculations if you’re struggling to tot it all up yourself.

“[An expert can] spot where the big carbon consumers are in any operation, wherever you are. Really focus on making those big changes that are going to get you furthest down that path.

The process Lawn describes here is calculating your scope 1 emissions, which is the first step to figuring out how your business is contributing to greenhouse gas pollution.

With energy costs at an all-time high, finding where you can save on your business energy bills will give you a fighting chance at staying profitable. Some simple money savers include adding doors to your refrigerators (if you’re a food and beverage seller), installing double glazing on your windows or adding motion sensors so that lights turn off when there’s nobody around.

“When you’re refitting, think about the supplier and their carbon footprint,” Lawn continues. He’s referring here to Scope 3 emissions – the pollution created by other businesses in your value chain. And yes, these do count as part of your business’ overall environmental impact.

Giving the examples of leather and steel, Lawn advises business leaders to reflect on lower-emission alternatives to raw materials.

“Non leather actually has a lower footprint for carbon dioxide than leather. And depending on how the steel’s made – or the metal that you are using – [it] has a different carbon footprint.

“Do you buy from somebody who’s already offsetting? Do you want to offset yourself?” The sustainability expert is referring to carbon offsetting, which means you financially contribute to a project that reduces the level of carbon dioxide in the atmosphere. For example, you could sponsor a project that restores peat bogland.

Sometimes carbon offset schemes get a bad rap because there are many low quality projects that aren’t scientifically backed. These are more like money-making operations which don’t bother to prove the carbon-reducing benefits of their activities.

So you should do your best to research high quality carbon offset schemes. Then you’ll better protect your business against any blowback if it emerges that a scheme was actually doing more harm than good.

Greener companies are more appealing employers

Why should you sink all this time and effort into reducing your scope 3 emissions anyway? One main reason is to improve your employee retention and hiring rates.

Research reveals that a business’ environmental record is becoming more of a focus for potential employees. Almost two thirds (65%) of UK office workers said they’re more likely to work for a company with a strong environmental record.

If that wasn’t enough to persuade you, know that 64% of Brits would turn down a job offer from a company with a bad environmental record.

Eco damage is no longer the fringe issue it once was. A majority of the workforce give serious weight to the ways in which companies handle their environmental affairs. In fact, 72% of those surveyed said they’re concerned about environmental ethics. Therefore, improving your business sustainability can greatly improve your employee satisfaction.

If you add up all the staff time it takes to recruit, interview, onboard, and train new employees you’ll surely start to wonder how you can limit the amount of hours needed there.

Green investment protects your business in the long term

With consumers becoming more savvy, many businesses are understandably concerned about being accused of “greenwashing”. That means launching a PR campaign that’s designed to make your company look as if it cares about the environment – but in reality no benefits are materialising.

So we’d encourage you to do what you can for the sake of sustainability in your business – if only to save on unnecessary expenses and cut down on wasted resources.

“Recognizing that the world’s changing around you is really important, especially as a small business owner,” says Lawn. “But don’t rush to make a decision. Hasty decisions are generally the thing that get you into a problem.”

So take confidence that with enough careful research, you can drive your business towards a more financially – and environmentally – sustainable future.