Sustaining profits: Going green can improve the bottom line, even for small businesses
By Brett Johnson
September 8, 2014 at 12:45 PM
(Originally posted on www.njbiz.com)
Transitioning to Green CEO Jeana Wirtenberg: “95 percent of sustainable projects are either cost-neutral or positive.” – (PHOTO BY AARON HOUSTON)
Small business owners have offered sustainability gurus every excuse in the book.
Their plans for eco-friendly infrastructure reforms were shelved because they were a resource drain … their 200-page-long PowerPoint presentation about energy efficiency was disregarded because, well, it’s 200 pages … they can’t even think about going green because it takes too much green.
But persistent advocates and now state initiatives are doing what they can to ease the process of implementing sustainability into a business — and show it’s the right thing to do for many reasons. Including the bottom line.
For Jeana Wirtenberg, sustainability has long been a no-brainer for small businesses.
As CEO of Transitioning to Green, a consulting and training company in Montville, she works to help businesses understand how these practices will lead to cost savings, talent attraction and an enhanced reputation.
“There’s many who still think that being sustainable is somehow anti-business,” she said. “That’s not true at all — in fact, it’s the opposite. It’s a necessary part of any business with long-term goals.
“Research has shown that 95 percent of sustainable projects are either cost-neutral or positive in the long term. It’s misleading to say these things are (too expensive); when in fact, you’re going to save and make money.”
But not all of the state’s small businesses have gotten her memo.
A survey done by Fairleigh Dickinson University’s Institute for Sustainable Enterprise, of which Wirtenberg is a co-founder, found larger companies are much more often adopting sustainable practices than smaller companies.
That means that a grand majority are lagging behind, given that small and midsized companies make up an estimated 90 percent of all New Jersey businesses.
That’s not for a lack of trying on the part of Wirtenberg, who has written two books about sustainability while launching initiatives aimed at supporting it through education and consulting services.
She and others are battling preconceptions about sustainability and doing all they can to get small businesses on board.
In her experience, that may take something as simple as just telling a small business where to start.
“A lot of small companies just don’t know what to do in the beginning,” she said. “They’re overwhelmed with the 100-some different things (a business) could be doing.”
And, she added, often what small business owners will opt to do for an initial project is something far too ambitious.
Her idea is to start out with small wins: change the light bulbs, coach employees in energy-saving behaviors and commit to improving just one area at a time.
Wirtenberg and her team have assisted in the process of implementing sustainable practices at larger companies, such as Novartis and Wyndham Worldwide. There’s a big difference between what those companies can do and what a small business on a limited budget can do.
Yet there’s some advantages that a small business has when integrating sustainability into what it does.
“The great thing about a small business is that it doesn’t have the same bureaucracy as a large business; therefore, it can get to action immediately,” she said. “It’s also easier to see the results more directly, whereas a large business has trouble quantifying it with all the associated variables.”
There’s two ingredients that a company of any size requires for going green: innovation and champions who will take charge.
That’s where the employees come in, according to Kris Kohl, president of Moorestown-based HRcomputes, which offers sustainability guidance centered on human capital.
“For (sustainability) to work at all — it takes getting employees excited about buying into the process by welcoming their solutions as well,” she said. “Anything that empowers employees makes them happier, and in turn, increases productivity.”
Not only is it a way to help in the retention of current employees, but there’s ample research into sustainability being a factor in a company’s ability to attract new ones — especially young talent.
According to a TD Bank survey released in June, half of millennials are likely to evaluate an organization’s environmental impact when looking for a job. More than a quarter said they would outright refuse a job based on poor environmental practices.
Of course, this is tough to quantify — making it difficult to justify the investment for a small business.
“I like to think of sustainability as a journey,” Kohl said. “Companies at the beginning of the journey, still at the exposure level, may not think as much about those intangible things. They’re still trying to figure out: ‘Can I save a little money on my energy, or my fuel?’ ”
For those whose bottom line is what pays the bills, the returns have to be assured.
But some of what Kohl and Wirtenberg say should be done requires no money whatsoever, such as unplugging every electronic device in an office and only re-plugging what’s actually being used.
Even what does cost something has an associated return-on-investment timeframe, Wirtenberg said, and the potential benefit is best for those who aren’t stalling.
“From a financial standpoint, companies are acting way too conservatively in terms of investing in sustainability,” Wirtenberg said. “If they act sooner, even if requires taking on some debt, it increases the direct and intangible returns.”
The problem: Unlike larger companies, small businesses typically don’t have people dedicated to sustainable projects.
As one potential remedy to that, New Jersey’s Small Business Development Centers last month launched an initiative — funded by a grant from the U.S. Environmental Protection Agency — that provides free access to consultants.
Ed Kurocka, who is managing this grant program for the NJSBDC, said the hardest part about getting the small business community involved is convincing them that there’s no catch.
“The thing that we need to impress upon business owners is that this is not a regulatory thing,” he said. “This is totally outside the realm of enforcement. We’re not looking to report back after an off-site visit that someone isn’t in compliance. It’s more about helping people get on the right path to sustainability.”
The initiative, referred to as the New Jersey Sustainable Business program, also recognizes businesses’ efforts through a registry program. Businesses that can demonstrate at least five measurable practices that make a positive environmental impact can fold the program’s registry emblem into its marketing.
“And if a customer has a choice between two dry cleaning shops, both of which offer identical services at a comparable cost, are they going to go with the one that has an official sign stating that it operates sustainably or the one that doesn’t?” Kurocka said. “It may be the deciding factor.”
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A starting point
Melinda Dower, sustainability consultant for the New Jersey Sustainable Business program, named four areas a small business can look to for eco-friendly investments that may end up paying off:
Small businesses often find energy savings of 5 to 20 percent via efficiency improvements such as lighting upgrades, timers and heating/cooling upgrades.
Waste disposal and regulatory costs can be reduced by switching to non-regulated materials and reducing the volume of waste generated.
Transportation costs can be reduced by reducing vehicle idling, better maintenance of vehicles and inexpensive technologies that maximize routes.
Water use by a company can be reduced by installing water-efficient equipment, appliances and plumbing fixtures throughout its buildings.