Green Business Bureau Blog
The Opportunity Cost of Green: How Companies around the World Can Make Money with Green Initiatives
While in some areas green, eco initiatives may seem like a new age fad that will come and go, nothing could be further from the truth. In fact, across the globe going green is becoming more important every day. Countries around the world are banding together to make the environment better by setting goals for reducing emissions, decreasing pollution and reducing our reliance on non-renewable resources such as fossil fuels. In an effort to encourage such actions on the part of businesses and manufacturing facilities, many governments are developing standards and programs to encourage – even require – green retrofitting and initiatives.
Meeting Government Standards
Many countries are creating standards for a variety of industries and issues. Mexico’s Environmental Due Diligence and Waste Law defines how waste can be treated and how land used for waste storage can be used. In 2003, India updated their Recycled Plastics Manufacture and Usage laws regulating the use of non-biodegradable plastic bags. The European Union has developed emissions standards required of vehicles and manufacturing facilities… the list of countries instating various green standards goes on and on.
Today, no business can thrive – or even survive – without considering some type of eco-friendly governmental standards. Violating such standards is not only bad for the environment, but can result in heavy fines. Thus, it is imperative that any business, large or small, be aware of the government regulations that relate to their processes and procedures.
Saving Money with Green
In addition to meeting governmental mandates, there is also an opportunity cost – a saving really – in going green. Many green initiatives can result in a cost savings, often through reduced waste. My minimizing materials used in manufacturing, for example, a company can reduce materials cost and reduce fees associated with storage or disposal of excess materials. Some of these steps require an initial outlay of money in product design or materials research, but the savings realized over the long run can be great.
Another way to save money, meet various government mandates, and help the environment is through reducing energy consumption. This can be done through simple procedural changes and through equipment upgrade, the latter of which can take some time to recoup the savings, but usually is profitable in the long run. Without spending any additional money energy costs can be cut by simply turning on fewer lights and changing the air temperature settings on the thermostat by a couple degrees. Of course, taking us back to government oversight of green activities, there can sometimes be free money to make going green easier.
Free Government Money
In many areas of the world the government is attempting to make going green a little less painful for companies seeking to make eco-friendly changes. India’s 10-year Green India Mission has provided for reduced taxes on a variety of eco-friendly products from LED lights to hybrid conversion kids for vehicles. The United States has been offering extensive tax rebates on high efficiency heating and cooling for buildings, alternative power as well as hybrid and electric vehicles. Australia recently offered hefty incentives, for example, for companies that installed rainwater collectors to limit the need for water purification; while this program recently ended, this shows one example about how government programs can help offset the cost of green initiatives, helping them pay for themselves sooner.
Preparing for the Future
While some simple green steps can be taken with little financial investment, making a true commitment to green will require some planning. Established business, manufacturing facilities and energy suppliers may initially find it challenging to scale back production in order to retrofit and make major green changes. But by investing in research and technology with an eye towards reducing waste and saving energy, a serious amount of money can be saved over the long term. Add this to the need to meet governmental standards around the world and make use of government rebates and incentives, and it seems that making green changes is more a need than an option. On top of all this, as consumers become more and more environmentally conscious they will demand more of the same from the businesses they patronize, meaning that by going green you can save money, but also expand your customer base and keep your customers happy.