Can ESG & sustainability be profitable?

ESG

Is ESG profitable for a business? We need a Ted Lasso sized woo-hoo here. Yes! Absolutely. And, to show you, we opened up Microsoft Excel and created a spreadsheet of sample revenue increases and expense decreases that can come with sustainable initiatives at a company like yours. Believe.

How do we make money by being good to the environment?

To prove that sustainability can be profitable for a business, we need to get out Microsoft Excel. 

Proof that sustainable initiatives are profitable to SMBs.

Above is a fake business’ P&L statement. They’re doing four or five things that are sustainable. Let’s look at how it impacts their profitability. 

In relation to revenue, this company’s reputation has improved because of their sustainability initiatives. Their innovative products and services – based on new sustainability practices, new markets, or goodwill, are being financially rewarded. Perhaps this company is even getting financing because of sustainability practices. All of this opportunity bumps revenue by 9% in this example. 

Now, let’s move to expenses. Looking at sustainability with a cost-savings lens can give your business the ability to do more with less. Things like energy to your building, waste, materials. Evaluating and finding ways to reduce each is smart and helpful to the planet. All of this work can also be reduced through sustainable initiatives. 

Let’s say we dropped energy by 75% percent, reduced waste costs by 20%, and cut material costs by 10%. Happy and inspired employees are productive employees. Sustainability supports employee satisfaction and can reduce attrition costs (think The Great Resignation). By improving employee productivity by 2%, and slowing down employee departures by 25%, you can see tangible savings from a sustainability program at your business. 

Sustainability efforts can positively impact profitability

Revenue minus expenses quals profit. When tallying these percentages up, you can see that without overextending, a business can actually improve profits by 50% and more. 

You can also reduce risks to revenue and expenses as well by looking ahead and seeing your organization as part of a larger global being that holds climate and social risk. 

There you have it. Right in front of you in black and white and red and green. Sustainability can actually be profitable at your business. 

Thanks for reading!

~Team ThisRock