How Business Owners Are Driving the Green Revolution
With CO2 emissions skyrocketing in the past 50 years, one of the largest concerns is cleaner forms of technology-driven fuel. With international compromises, such as the Paris Agreement,
the world has taken steps to ensure a more proactive movement towards sustainable and clean energy. The government is coming together to reduce gas emissions and adapt to more clean energy resources. Although this initiative will have a major impact, it has been relatively recent. The largest problem with relying on governments to bring about change is that there is a significant lag in progress.
Between conception, implementation of the policy, and the actual effects of the policy, there is always a major lag between government green initiatives. Because of this, businesses have been spearheading the movement for a more green economy. In fact, businesses have been driving the green revolution for years.
Businesses Taking the Lead
IKEA was the first major retailer to sell LED lighting fixtures exclusively. 90% of their building in the U.S. have solar panels installed and have worked towards 100% renewable energy for the past decade. IKEA has also invested over $1 billion in initiatives for clean every in order to become resource and energy independent. Patagonia, a clothing retailer, donates 1% of its sales as an “Earth Tax’ to support environmental organizations. They’ve created programs to incentivize their employees to carpool with the Employee Drive Less Program. They have also donated over $70 million in technology initiatives.
Even companies such as Johnson & Johnson have taken steps to reduce their carbon emissions. They have created plans called Citizenship & Sustainability 2020 Goals that look at on-site CO2 reduction, reduction in water consumption, disposable waste programs, and sustainability improvements for products. This goal aims to help both the company to be more fuel efficient and at-home users to have more green products. What is making all these companies go green?
Corporate Social Responsibility
One of the largest reasons companies are going green is because of corporate social responsibility. These are a corporation's responsibility for the environmental and social well-being of the marketplace in which they operate. Many companies are extremely large and powerful; therefore, they have a lot of influence in politics and society.
In the early 20th century, many companies used this type of power to actually create unfriendly business environments. For example, many of the logging, cattle ranching, gold mining companies in the 1900’s destroyed the environment with poor regulation and deforestation. Because of this dark legacy, companies have tried to change their involvement in the environment for the better, therefore, changing their social image.
Reversing the effects of early operations is not the only reason businesses are wanting an image rebuff. As consumers shifted into more eco-friendly shoppers, companies implemented corporate social responsibilities to better their company's reputation and attract more customers. This has created a marketability factor as consumers and the media tend to like businesses that are more environmentally conscious.
As reputation has become increasingly important to companies with the scrutiny of the media, competition has also increased. If one company offers greener products or better initiatives, they might seem more attractive and increase their demand for those products. This has sparked eco-friendly competitions as companies want to appease consumers and appear better than the competition.
Going Green Saves Money
Besides attracting customers and positive media attention, going green can actually save businesses money. For example, on average, one employee can go through three thousand sheets of paper per year. Simply converting to a more online business environment can save the company a large number of paper costs per year and improve productivity. Savings for businesses do not stop there. Reducing electricity can both save the company money and reduce the company's carbon footprint.
There are many ways in which this can be achieved. One of which is through LED light fixtures which produce light with less wattage. Starbucks switched to LED fixtures in 2008 and found millions in savings. Another way to reduce energy is by cycling out old equipment for more energy efficient equipment. By doing so, these can save electric bill costs and translate to an overall reduction in energy consumption. Similarly, DuPont's plant in New Jersey sliced $17 million off its annual energy bill while increasing production by 9%.
Not only can businesses save money by reducing energy consumption or switching to more environmentally better programs, but the company can also get tax incentives. This can come in the form of tax credits, rebates, or other tax breaks for environmentally-friendly practices. For example, one of the biggest tax breaks is charitable donations. A donation of a certain amount of both cash and noncash contributions can provide companies with great benefits. Donation of land over $5,000 in value can also be written off as tax breaks. These incentives help businesses to be more green.
Lastly, sometimes business is being more environmentally friendly because they want to. There is a “feel good” factor behind becoming more eco-friendly. It feels good to contribute to a positive change in our society. Additionally, as people have shifted towards a more green thumb, so have the CEOs and CFOs in corporations.
Society's ideals have infiltrated the people with the power, so it's not farfetched for some companies to do good out of the kindness of their heart. There are many reasons for business, small and large, are going green. Because of this, businesses are driving the green revolution and producing a more eco-friendly economy. Although we have started this process, there is still a way to go.
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