By Leora Price
The future is green, but it can be hard to keep up with all of these eco-friendly policies and buzzwords. (What’s a carbon offset, again?) Still, making your small business more environmentally friendly doesn’t have to be an expensive drag. In fact, it might just save you a different kind of green.
Small businesses make up 90 percent of all enterprises worldwide, according to the World Economic Forum, and yet many have yet to invest in sustainability.
At the same time, governments and regulatory organizations around the globe are ramping up environmental, social, and governance (ESG) regulations. The WEF now warns that businesses that don’t go green could soon be left behind.
If you want a leg up on the competition for the road ahead, there’s never been a better time to green it up. Read on for tips to lower your power bills, reduce your carbon footprint, and attract eco-conscious employees.
Conduct a small business energy audit
We promise, an energy audit isn’t as intense as it sounds. Actually, looking into your energy consumption could save your small business money.
You don’t need to hire an expert to conduct this audit, either. Mike Jones, president of SEEDidaho (SEED stands for Sustainable Environment Engineered Design), tells us that after enough research, “a somewhat savvy person would be able to perform an audit. … Especially if they take the time and read the guiding documents on how to do it and what to look for.”
Just like no company is the same, every company’s energy audit will look a little different. That said, the end goal is simple: You’re simply trying to track and measure the different ways your company consumes energy, and to find inefficiencies.
To come up with your own energy audit plan, Jones recommends consulting the energy audit guide from the American Society of Heating, Refrigeration and Air-Conditioning Engineers (ASHRAE).
Invest in carbon offsets
Once you’ve assessed your energy consumption habits, you can also counteract your small business’s impact on the planet by purchasing carbon credits. Right now, carbon neutral businesses are hot, hot, hot.
But wait, what is a carbon offset—and what’s a carbon credit? Are they the same thing?
Almost, but not quite. A carbon offset is any activity that reduces the amount of carbon in the atmosphere. (Think: investing in land restoration, planting trees, et cetera.)
A carbon credit, meanwhile, is a certified and transferable financial transaction that allows small businesses to help fund that work and, in doing so, counteract their impact on the environment. This way, all of us can do our part, even if we’re not the ones planting trees.
Small businesses and individuals can purchase credits through organizations including Terrapass, Carbon Checkout, and more. That said, not all of these programs are created equal.
In an op-ed for MarketWatch, MIT Sloan School of Management professor John Sterman emphasized that in choosing a carbon credit program, it’s important to focus on certain criteria.
A carbon credit program’s offsets should be AVID+, Sterman said—meaning, Additional (meaning, they should offset activity that would otherwise not be addressed), Verifiable, Immediate, Durable, and advance other social goals.
How much should your small business invest in carbon offsets? Start by looking at both your budget and your energy audit to determine what’s realistic. Then, make sure to ask your accountant about any tax rebate or incentive programs. There’s a chance that doing the right thing could also be good for your wallet.
Find incentive programs and switch to renewable energy
If you’re willing to make a bigger investment, consider soaking up the sun (and the savings) with solar panels. Swapping out at least some of your small business’s lighting for solar won’t just reduce your small business’s carbon footprint—it’ll also lower your power bill.
With installation prices up to the hundreds of thousands, solar is a major commitment. That said, you don’t have to foot the bill alone.
Commercial solar installations can often qualify as a business expense, meaning you can sometimes write them off on your taxes. (As always, consult your accountant first.) On top of that, you can recoup some of your investment in energy independence through two federal solar tax credit options.
In the US, you can also reduce upfront costs with a power purchase agreement (PPA), in which a third party will oversee the installation and equipment and gradually shift those responsibilities to you over time.
For further savings, look for any possible local and state-run programs, as well as solar grants for small businesses. The investment might be steep, but if energy independence is within your means, the future is bright.
Confirm that your business partners share your values
Just like greening your small business can help your reputation blossom, so can partnering with other like-minded enterprises.
You can begin by writing out a list of your small business’s vendors, distributors, and other collaborators. Are they local? Depending on the service they provide, switching to another company nearer to your business could save you money while also reducing transportation emissions.
Beyond location, it’s worth examining whether a business has done the same work you have to protect the planet—or, at least, that they are as invested as you are. Working to help the environment can help boost your small business’s reputation, but wasteful partners can reverse some of that goodwill.
To identify sustainable companies that could become potential business partners, connect with your local Chamber of Commerce, professional networking organizations, and grassroots environmental advocacy groups.
… And pay it forward by investing in others
Anything your small business does to go green and become more sustainable is a step in the right direction. That said, there’s always more we can do to make sure that our journey into the future is not a crawl but a sprint.
One way to expand your impact could be to donate to like-minded organizations. Companies of all shapes and sizes have made this a part of their policy already; last year, Patagonia founder Yvon Chouinard actually donated the entire company to fight climate change.
Even if you’re not in a position to donate cash (or your entire small business), you can still donate your time and labor and encourage employees to do the same.
You could, for instance, try starting an employee volunteer program and help support eco-friendly projects in your area. Once again, local environmental advocacy groups and your Chamber of Commerce could be good places to begin when looking for like-minded groups and causes.
If you’re really ready to take the plunge, you could also take your efforts beyond the day-to-day and focus on climate activism. Small businesses can help rally local government and officials for bigger, more lasting change. Beyond internal measures, this is just one more way that we could all plant the seeds for a brighter, greener tomorrow.