Few business owners consider a connection between sustainability and profitability. Sustainable initiatives are often misjudged as a “nice to have” for businesses with healthy cashflows or only valuable to organizations that orient themselves around sustainability as a core value (e.g. Patagonia). Sustainability is rarely seen as something that ordinary organizations can pursue—it is typically viewed as a cost sink.
Historically that has been the case, but modern sustainability has a lot to offer to businesses of all kinds. Sustainable initiatives allow businesses to retain earnings, remain flexible, and improve margins. We are seeing a rapid shift in how companies approach sustainability, less as an option and more as a necessity.
What does a simple sustainability initiative look like? In short, it’s about maintaining your existing systems, not building new ones.
When a construction project ends, business focus shifts to other new projects and the building operations are often left to a facilities team whose hands are full with day-to-day issues brought forth by building users. The energy strategy is reactive, with little to no planning besides continuing to pay the utility bill. The result? Over the lifetime of the building, owned assets typically creep out of commission, leading to a slow upward trend in cost for the owner. This slow trend of compounding entropy leads to surprisingly inflated costs in a stunningly short amount of time.
What would a more strategic alternative look like?
Sustainability strategy is a surprisingly broad topic. It is knowing which tools to use, when to deploy them, and how to capitalize to maximize ROI. This includes work like performing detailed analyses of energy data, optimizing government incentive structures, and utility rate hedging. Most businesses can immediately benefit from a few simple actions.
The first step is granular utility data analysis. Businesses can only manage what they can measure. Much like the famed “Pareto Principle”, in which a minority of input creates most of the output, most of a client’s utility bill is often comprised of a few impactful charges resulting from an unoptimized energy strategy—avoidable demand at inopportune times or an unused meter accruing flat monthly charges, for example. Simple utility analysis can often identify many of the largest sources of utility and cost waste in a business.
Businesses can also optimize their building management system (BMS) to reduce waste, avoid high demand at peak hours, recalibrate competing subsystems, and so on. This can be a fantastic tool for dramatically reducing energy waste.
Another step is leveraging government energy efficiency and sustainability incentives, rebates, and tax structures. Federal, state, and local programs give businesses the financial relief they require to implement sustainability strategies that will make them more profitable.
When executed properly, these simple steps can often yield a positive net return in the first months of the project.
That is just the start, however. Businesses may also explore integrating solar and EV installations, battery or thermal energy storage, carbon goal-setting, and more. The vital role of a sustainability strategist is knowing which options, in which order, will maximize the benefit to the business.
Businesses that become interested in sustainability initiatives often find that the savings are so significant that they immediately use those savings to reinvest in other sustainability projects. The savings from a granular utility analysis and optimized BMS may, for example, allow a business to invest in LED lighting and controls retrofits or strategic VFD installations. Those savings, in turn, compound further.
As they learn more, wise business owners realize that:
- Sustainable strategies can start small but often generate immediate and significant savings.
- Businesses can then reinvest these savings.
- Compounding effects produce massive savings, resulting in a stronger, more competitive business.
- These organizations can then market their exciting sustainability accomplishments to external stakeholders or customers, driving additional interest in the business.
This isn’t just good business, it’s also great for the planet! Leaders that embrace sustainable practices are not just making their business healthier, they are fostering a brighter future for everyone.
Sustainability is still not on many business leaders’ radar. Soon, out of financial necessity, it will be.
Has your organization embraced Prosperity Through Sustainability?
If you would like an expert opinion on how sustainability initiatives could transform your business, email us at info@olympicsustainability.com.