Business Research Report Final

Going Green: A Trend for Businesses

Rachel White

Gateway Community College

ENG 103 Business Communications

Dr. Hooper-Simanga

February 12, 2021

Abstract:

Going green, environmental sustainability, and eco-friendly are all terms that have become prevalent in the news, social media, and the business world. There is a growing demand for eco-friendly companies and products to achieve the green lifestyle. How does going green benefit a business? From tax breaks to grants and lower energy bills the monetary advantages are vast. How popular is the green initiative? 88% of consumers want brands to help them be more eco-friendly (Townsend, 2018). What does this mean for you as a business? More customers, more sales, and lower operating costs over the life of the business.

Environmental sustainability has become a popular topic over the last several decades. Sustainability and going green is no longer just for the individual household. Business and government entities are following suite and finding ways to become more sustainable in all aspects of their business. Sustainable business is not just a trend that will fade with time. It is an answer to the growing demand on the natural resources and rising costs of owning and running a business. From entrepreneurs and small businesses to large corporations, businesses are meeting new demands with innovative practices that not only save them money but bring in a new customer profile.

What is Environmental Sustainability?

Environmental sustainability is acting in a responsible manner to maintain the natural resources the planet provides and doing so in a manner that does not jeopardize future generations (Evans, M. 2020). For businesses this means implementing practices that conserve energy, reduce product and material waste, and lower their pollution outputs. For decades businesses have operated with no regard for the environment. However, due to government regulations and the changing perspective of the general population this is no longer a feasible way for businesses to run.

The Environmental Protection Agency was created by the United States Government in 1970 to create regulations to protect the environment from human factors. Some of the more notable regulations that involve businesses is the Clean Air Act, Clean Water Act, Toxic Substance Control Act, the Superfund, and the Federal Insecticide, Fungicide, and Rodenticide Act. The EPA creates regulations to help them enforce laws and creating a standard that must be met by affected parties. The EPA’s mission is to help Americans have clean air, land, and water, help in the effort to reduce environmental risks, enforce laws to protect health and the environment, allow access to information to mitigate these risks, ensure cleanup, and create regulations pertaining to chemicals (Our Mission, 2020). Businesses who do not meet the standard requirements mentioned in their laws are subject to fines, penalties, and jail time. Governmental enforcement is not the only reason for businesses to go green. The benefits to businesses regardless of size are vast.

Economic Benefits

One of the benefits of going green is of monetary value. Reduction of energy waste leads to money saved. Switching to LED lights, setting them on motion sensors, turning off or unplugging computers and equipment, replacing filters in the HVAC unit, switching to solar power, lowering water use and waste, and using energy monitoring technology are all ways to reduce energy waste. The benefits may not be seen up front but in the long run energy reduction means lower bills and that lowers operating costs.

There are many government programs that give businesses a tax break and rebates if they switch to certain energy reduction systems. The government and other entities also provide grants to help businesses go green. The Small Business Administration provides financial help to businesses that provide green solutions in the constructions of buildings and homes and retrofitting existing structures (Green Business Bureau, 2019). The government gives a tax break for the use of vehicles that meet certain fuel efficiency standards (Green Business Bureau, 2019). Many areas offer tax credits for the use of solar, hydro, and wind power (Green Business Bureau, 2019).

Some businesses even buy other businesses waste to turn it into a new usable product. The Association of Plastic Recyclers has a database of businesses that take plastic waste and provides information to businesses on reduction in plastic use and ways to reuse or sell plastic waste (2020). Businesses can reap the benefits of buying recycled products or selling their own waste. Another waste reduction technique is switching to cloud-based storage instead of paper, this decreases the expenses associated with supplies that are needed. It also lowers the need for paper shredding and having outside companies come in to remove or shred sensitive documents.

The cost savings for going green can add up. In one study, Kolodny with Techcrunch (2011) ran the numbers and found that: Over 90 percent of companies realized cost savings as a direct result of their green programs: 78 percent of them saved on electricity, 68 percent on heating and cooling, 68 percent on paper, and 60 percent saved on water. About 9 percent of companies with formal green programs said they failed to save money thanks to their initiatives in 2010.

Not only does the reduction in waste increase a business’s budget but it brings in new customers. More customers mean increase sales. The overall savings and increase in revenue are an advantage for businesses.

New Customer Profile

A recent study found that organic food sales increased by 11.3% while overall food sales grew by 3% (Sena, 2020). Another study found that within 60 countries, 55% of people were willing to pay more for goods from environmentally conscious companies (Sena, 2020). 70% of polled consumers from the U.S. and Canada stated they think being eco-friendly is important in a brand (Bekmagambetove, 2020). As the Gen Z demographic (population born between 1996 and early 2000s) continues to display more buying power, sustainability and green products are high on their purchase list. The younger generation of adults tend to care more about the environment and make buying decisions based off that focus. Those in the Gen Z category make up approximately a third of the world’s population and are now having children of their own. Making them a large target market for businesses across the world.

Over the past several decades the views on environmental sustainability have shifted. Federal and state governments are making changes in policies and laws to reflect this. Consumers are changing their personal habits to reflect their views as well. Businesses have been making changes, but consumers want them to do more. Consumers cannot support their beliefs and habits without products that help them do so. Consumers want products that help them live an eco-friendly green lifestyle. Many businesses are meeting that need but many are not. By not meeting this ever growing demand a large target market is lost. Gaining that market back in the future may deem difficult once brand loyalty is

Forbes featured this graph in a 2018 article showing that 88% of consumers from the U.S. and U.K. want brands to help them become eco-friendly. Though the polled group was small it does represent a growing consumer mindset. One of the main goals of a company should be serving their consumers. Giving consumers what they want, when they need it is what keeps a business running and builds brand loyalty.

Consumers are wanting brands with an eco-friendly purpose and that operate sustainably, use products that are sustainably sourced, natural, and fresh. Consumers also want companies to use environmentally friendly packaging that is made from recycled materials, is biodegradable or can be recycled (Green Business Bureau, 2019). Not only do customers want the brands to be sustainable and eco-friendly; they want products that help them become the same.

Conclusion

There are many trends within business, many of those trends can greatly increase the success of a business. Regardless of what the beliefs are behind environmental sustainability, the environment in general, and our impact on it. Going green as a business is a trend that could make you successful and increase monetary gains. The savings from having green initiatives at the workplace in addition to increased sales of green eco-friendly products allows your business to operate smarter. Increasing customers and sales is what most businesses need. The green trend has evolved over the past several decades and with government intervention on the rise it seems to be staying around for quite some time. Not following the green trend could financially hurt your business and cause the loss of customers. Going green and becoming eco-friendly may be a trend that can no longer be ignored in the future.

References

Bekmagambetova, D. (2020, January 10). Two-Thirds of North Americans Prefer Eco-Friendly Brands, Study Finds. Barron’s. https://www.barrons.com/articles/two-thirds-of-north-americans-prefer-eco-friendly-brands-study-finds-51578661728