When should you invest in sustainability? What should you invest in first? Who should make the call?
You should invest today, but you don’t need to do everything all at once, do exactly what your supplier tells you to do, or do what sounds the greenest. It doesn’t need to be difficult, hurt your business, or be complicated. The investments to make are the ones that make financial sense, which you can then communicate simply. The key is to sequence investments in the right order for your benefit and the way your business operates.
We work with a lot of smart people running great businesses, and we frequently see that they are in a rush to talk ESG (Environmental, Social, and Governance) and then they freeze. Sometimes it’s a priority, and sometimes not. We get it. It’s why we formed Double Green.
First, let finance take the wheel. This should be a business decision. Today, every sustainability decision should be able to stand on its own financially, with the added benefit of making your employees, suppliers, regulators, and other stakeholders happy. The good news is that truly sustainable projects save money while reducing environmental impact. You’ll need to collaborate with many people, but remember: finance has the best understanding of priorities in the business. Finance will know where projects will be of value and where they might be a distraction.
Operations should evaluate the feasibility of anything that touches equipment, process, or facilities. HR should get involved if there’s an impact on people. Communications will partner or lead when it comes to communicating the impact. The General Manager and Sales folks will play a part in transferring information related to interested suppliers and retailers who benefit from programs that reduce their scope 3 emissions in your operations.
You should evaluate sustainability investments as you do other projects: What’s the cost, the ROI, the IRR (internal rate of return); what problem does it solve; what’s the benefit; does it fit your culture; does it make life easier for your employees?
Inaction is costly due to increasing energy prices, temperatures, regulations, and ESG interest.
For instance, the cost of waiting to invest in solar can be significant. Solar energy is becoming an increasingly popular source of renewable energy, and the cost of solar panels has declined rapidly in recent years. Here are a few reasons why waiting to invest in solar could be costly:
- Missed savings: By investing in solar now, you can start saving money on your electricity bills immediately. The longer you wait to invest in solar, the more money you are likely to spend on electricity bills.
- Lost incentives: The IRR has some legs, but local and utility incentives fluctuate and are set to expire. Many governments offer solar investing incentives, such as tax credits, rebates, and net metering programs. These incentives help reduce the upfront cost of investing in solar and increase your return on investment. However, some of these incentives are scheduled to expire or decrease in the coming years, so waiting to invest in solar could mean missing out on these opportunities.
- Rising electricity prices: The cost of electricity is likely to continue rising in the future due to factors such as increasing demand, aging infrastructure, and climate change. By investing in solar now, you can lock in a lower rate for your electricity and protect yourself against future price increases.
- Environmental impact: Solar energy is a clean and renewable source of energy that can help reduce your carbon footprint and contribute to a more sustainable future. By investing in solar now, you can reap the benefits of reducing your environmental impact.
It is important for businesses to invest in sustainability as early as possible. However, it doesn’t have to be complex or require a large internal task force. Double Green is here to help you take action on sustainability investments to save your business money and time. Are you ready to go green and save green? Give us a call at 307-855-1342.