Most people view a company and its suppliers as a single entity. They were judged as either sustainable and responsible or not. While some businesses have good practices for ethics, others do so for self-serving reasons. But not all want to shift to green supply chain management practices. The same goes for environment-friendly production methods.
These days, being sustainable is a concern for businesses and people. Consumers are becoming conscious of how their purchases affect the planet. That makes them willing to pay more for eco-friendly options. You can appeal to this growing market with plastic-free products or packaging.
Going green offers many benefits. That includes cost savings and an increase in brand loyalty, public image, and performance. It can help companies save money, attract and retain customers, and stand out.
What is a Carbon Footprint?
It is the total amount of greenhouse gas emissions over some time. These gases trap heat in the atmosphere, leading to global warming. The most common greenhouse gases are:
- Carbon dioxide (CO2)
- Methane (CH4)
- Nitrous oxide (N2O)
Whenever you use energy, you create a carbon footprint. It has two main types:
- Direct emissions Direct emissions come from burning fossil fuels, such as oil and gas, which go directly into the atmosphere.
- Indirect emissions Energy-intensive activities like transport have indirect emissions. It may come from making, using, and disposing of materials like plastic. To reduce your footprint, lower the gases you emit into the atmosphere and avoid using single-use plastic.
Boost Your Bottom Line
Going plastic-free can bring numerous benefits, like cost savings and raised sales. Here’s what may happen from “greening” your company:
Investing in this cause can lead to cost savings over time. A McKinsey (2011) survey found that 33% of businesses had sustainable practices, like:
- Service provider Elytus’ clients saved over $11 million. That is through ten years of sustainable waste management and transparency.
- Walmart expects $12 billion in global supply chain savings. That is by lowering package waste by 5% by 2013 using a 2008 baseline.
- Dow Chemical invested nearly $2 billion in 1994 in its efforts to go green. By 2011, they had over $9 billion in reduced energy costs and saved 1.8 quadrillions of Btu of energy. It is enough to power every home in California for 20 months.
If you are worried about your company’s finances, check out CFO services. A virtual CFO can help ensure your business profits while being sustainable.
A green service provides value to customers by using resources well. This approach can save customers and companies money while driving innovation. Following this, businesses must point out when to replace products with services. They must meet customer needs and decide when to sell services instead, like these examples:
Car rental companies like Zipcar switched to short-term rentals for hours. That allows clients to use fuel-efficient vehicles and reduce driving when renting. Zipcar aims to bring sustainable and equitable transport nationwide. They also aim to reduce car ownership and lower carbon emissions.
Interface, a commercial flooring company, sells flooring to combat climate change. It launched the Evergreen Services Agreement (ESA). This move is to reduce its carbon footprint. This lease offers floor-covering services such as colour, texture, warmth, beauty, acoustics, and safety. They own the carpet material to ensure proper recycling.
Their products come from factories that saved millions by reducing waste. They also streamlined purchasing to provide hassle-free and value-oriented customer service. This move effectively drove sales. By lowering plastic use and waste, companies can save on production and waste management.
Growing Demand for Eco-friendly Products
Consumers like millennials prefer brands that prioritize purpose and the planet. One report found that sustainable products had twice the growth of their counterparts. By switching to plastic-free products and packaging, businesses can lower costs. Investing in reusable things means not dealing with excess packaging, which can add savings from storage and disposal.
Going plastic-free can provide businesses with a competitive edge. After all, people look for companies that have good practices.
How to Reduce Your Business’s Carbon Footprint
There is no one-size-fits-all solution to being sustainable. After all, there are many types of businesses, like small, local ops and large corpo. They also operate in various sectors, like production, retail, service, and tech.
But climate change affects businesses in all areas, whether they are “polluting” or “clean” sectors. Even those skeptical of global warming see the glaring concern about climate change. The same goes for how it can affect businesses. Reducing your company’s carbon footprint helps ensure long-term profit, and here are some steps you can take:
- Use Energy-Efficient Appliances First, take note of your energy use, then point out areas you can improve. For example, switch to renewable energy like solar power or invest in energy-efficient tools. Minimize energy use in the office and even at home, too.
- Reduce Your Waste If you manufacture, improve or reduce your packaging. Also, find ways to reuse or recycle materials. You can reduce paper waste with double-sided printing or going digital.
- Consider Green Transit Options Encourage your employees to carpool or use public vehicles. You can also invest in electric cars for your business. In addition, switch to biofuels for your fleet of vehicles. If you need to drive, use a fuel-efficient car. Being sustainable needs strong leadership and systems. Owners and leaders must make top-down decisions for the company, its employees, customers, and the planet. Businesses must enact the most effective strategies and initiatives. With mission-driven finance, companies can assess their systems and switch to a plastic-free model.
Challenges of Shifting to a Plastic-free Business Model
Shifting to a plastic-free business model can be daunting. You must consider the potential challenges before making the switch. The benefits of going plastic-free are clear, but there may be downsides like:
- Supplier challenges
- Consumer habits and attitudes
- Corporate environment reporting
Shifting to a plastic-free business model may involve changes to the supply chain and operations. As part of this shift, businesses should consider potential impacts like:
- Looking for other sources of raw materials
- Developing new processes and tech for production and packaging
- Exploring new ways to transport goods
Companies such as Walmart respond similarly to Scott Paper and launched the so-called Sustainable Product Index. It helps producers, merchants and, customers decide sustainably. They also required direct import suppliers, which must source 95% of their production from specific factories. These are the ones with Walmart’s two highest audit ratings for their impact on people and the planet.
Finding plastic-free alternatives is a challenge, and many cannot locate suppliers or afford them. Changes to production, the supply chain, and waste management will take time and costs. But with time, these sacrifices are expected to pay off.
Consumer Habits and Attitudes
Another challenge is the need to change consumer habits and attitudes. Many consumers are becoming aware of plastic’s impact on the planet. But it can be challenging to convince them to go with plastic-free options.
Companies must also educate employees about this business model. They must relay the importance of reducing plastic use.
Corporate Environment Reporting
Businesses face increasing pressure to disclose their goals for the environment. A review of corporate reports revealed they need help when it comes to these questions.
Even during an economic recession, business leaders expect pressure. They also expect it to affect a broader range of industries. In response, they must define and manage how they communicate about the environment.
Businesses must understand the costs and difficulties of going plastic-free.
We can reconcile concerns about the planet and the economy. They can achieve benefits for businesses and the environment. Being conscious about the planet does not come at the cost of doing business. Instead, it is a catalyst for innovation and new market chances.
Switching to a plastic-free business model is a process. It needs careful planning and supply chain and operations changes. You must also find better alternatives. The goal is to reduce your carbon footprint and impact your bottom line.
Now is the time to switch to a plastic-free business model and reap the rewards. If you need help with the shift in your social impact business, schedule a call with the Profit Reimagined team.