5 ways going green can improve your bottom line

As sustainability becomes a central focus for businesses across the globe, small and medium-sized enterprises (SMEs) in the West Midlands are uniquely positioned to benefit from going green. Whether you're running a corner shop, a hairdressing salon, a manufacturing operation, or any other type of small business, sustainable practices can significantly enhance your bottom line. Here are five key ways that adopting green strategies can lead to financial gains.

1. Reduced operational costs

One of the most immediate and tangible benefits of going green is the reduction in operational costs. Energy efficiency, waste reduction, and resource conservation are all areas where small changes can lead to significant savings. For instance, simply switching to energy-efficient lighting can reduce electricity bills by up to 75%—a substantial saving for any business, particularly for small retailers or service providers where margins can be tight. Additionally, the UK government offers incentives to help businesses transition to more energy-efficient operations, making it easier for SMEs to invest in these changes.

2. Access to new markets and opportunities

As the UK government and local authorities push for a greener economy, there are growing opportunities for businesses that align with these goals. SMEs that adopt sustainable practices may qualify for grants, tax reliefs, and other incentives designed to support green initiatives. For example, local councils in the West Midlands have programmes such as BEAS and Decarbonisation Net Zero aimed at helping small businesses reduce their carbon footprint, which can be especially beneficial for almost all sectors where environmental impact is a growing concern.

3. Increased marketability

Consumers are increasingly favouring businesses that demonstrate a commitment to sustainability. According to a study by Nielsen, 66% of global consumers are willing to pay more for sustainable goods, and this trend is evident in the UK as well. By adopting green practices, SMEs in the West Midlands can enhance their brand reputation. This can translate to increased sales, customer loyalty, and even the ability to charge premium prices for sustainable products or services. In a competitive market, your environmental credentials can be a powerful differentiator.

4. Long-term resilience and competitiveness

Sustainability isn’t just about immediate financial gains; it’s also about future-proofing your business. As regulations around carbon emissions and environmental impact become stricter, businesses that have already integrated green practices will find it easier to comply, avoiding potential fines and disruptions. For SMEs in sectors like manufacturing, where regulatory pressures are particularly high, adopting sustainable practices now can help ensure long-term competitiveness and resilience. A prime example of this shift is the NHS, which is actively working towards a Net Zero supply chain by 2045. The NHS is urging its suppliers to adopt sustainable practices, with a strong focus on reducing carbon emissions. Businesses that fail to align with these expectations risk losing contracts and falling behind competitors who are meeting these sustainability criteria.

5. Enhanced employee engagement and productivity

Increasingly, employees are seeking to work for companies that align with their personal values, including a commitment to sustainability. While this trend is more pronounced among larger companies, it’s also becoming relevant for small businesses, particularly those in industries where attracting and retaining talent is competitive.

According to research, 74% of employees feel more fulfilled when they work for a company that is making a positive impact on the environment. For small businesses, fostering a sustainable workplace can enhance employee morale, attract top talent, and reduce turnover rates.

However, the degree to which this resonates can depend on your specific workforce. In sectors like tech, professional services, or among younger employees, sustainability is often a key consideration. On the other hand, in some more traditional industries, other factors like job security and compensation might be more important, though sustainability still adds value.

Free support and grants to go green

Book a free energy assessment and apply for match funding of up to £100,000 to make your business more energy efficient with the Business Energy Advice Service.

Sources:
Nielsen Study on Sustainability: https://www.nielsen.com/us/en/insights/article/2018/global-consumers-seek-companies-that-care-about-environmental-issues/
NHS Net Zero Supply Chain: https://www.supplychain.nhs.uk/sustainability/net-zero-supply-chain-and-suppliers/
Carbon Trust - Energy Efficiency Advice: https://www.carbontrust.com/resources/guides/energy-efficiency
Cone Communications Employee Engagement Study: https://engageforgood.com/2016-cone-communications-employee-engagement-study/