You've been told a hundred times that voluntary environmental programs are good for business — but they're good for a lot more than just improving your corporate reputation.
Here are 3 research-backed reasons to embrace voluntary environmental programs:
1. Reduce operational costs
When companies first embrace voluntary environmental programs, they often do so because of the promise of potential savings.
It's easy to see how changes like reducing energy and water usage can drive down costs. But managing supply chains can also be a huge source of potential savings. For example, Wal-Mart estimated that reducing packaging by 5% across their global supply chain could shave $12 billion off their operational costs.
Companies who focus on environmental initiatives may also see more loyal, motivated employees. Simply put, people want to be part of something meaningful.
If that sounds a little too "woo-woo", consider this: According to a study by the Corporate Executive Board, employees who are the most committed to their jobs put in 57% more effort on the job and are 87% less likely to resign. That translates to lower training, recruiting, and retention costs.
2. Seize growth opportunities
Voluntary environmental programs also offer big opportunities for business growth.
From drought-resistant crops to water-saving technology, C2ES found that 75% of S&P Global 100 companies have already identified potential market opportunities resulting from climate-related activities.
So, how much are those opportunities worth? McKinsey estimates that the clean-tech product market, for example, will more than double from $670 billion in 2010 to $1.6 trillion by 2020.
3. Manage risks
According to C2ES, one-third of S&P Global 100 companies report that they’ve already experienced the adverse effects of climate change. An additional 17 companies believe that they’ll be affected within the next 5 years.
In other words, the question is not if companies should address climate-related risks, but how.
Voluntary environmental programs are one way companies can identify and manage operational, reputation, and regulatory risks that arise from a changing global climate.
For example, the ISO 14001 environmental management standard includes language that goes beyond compliance by addressing all environmental aspects and impacts — whether they are regulated or not.
Choosing to address these aspects and impacts proactively has some pleasant side-effects: According to COSA, when companies like Mars, Unilever, and Nespresso invested in Rainforest Alliance certification to help farmers deal with climate volatility, they found that certified farmers were able to produce more cocoa than non-certified farms.