Why ‘Going Green’ Makes Good Business Sense
More businesses are increasingly understanding that what is good for the planet, is also good for business.
With sustainability practices fast becoming the norm, the benefits of making more environmentally friendly choices extend beyond the feel-good factor to significant commercial advantages for small business owners.
“More and more of our customers are realising that ‘going green’ is not just a good thing to do for the environment, but a smart business decision,” says Ken Hayes, Head of Asset Finance at BOQ Finance.
And with Australian Government support – like the Temporary Full Expensing (TFE) incentive and tailored asset finance from the Clean Energy Finance Corporation (CEFC), there’s never been a better time to think about making the switch to more sustainable equipment and finance solutions for your SME business. Here’s why.
1. Government incentives and tax benefits
Governments around the world are under increasing pressure to respond to environmental issues and are in turn, expecting businesses to reduce their footprint. Whilst there are penalties for not complying with regulations in some instances, there are also incentives for businesses to adopt more sustainable business practices.
For example, the CEFC invests on behalf of the Australian Government in technologies and projects to cut emissions across the Australian economy. Drawing on CEFC finance, BOQ Finance has established our Energy Efficient Equipment Finance Program with several funding options for SME businesses looking for sustainable finance to invest in equipment to reduce their energy costs and lower their emissions.
“With an increasing number of our customers seeking clean energy alternatives, the CEFC finance enables BOQ to provide competitive equipment finance for our SME business customers when purchasing eligible energy efficient equipment and assets – such as solar systems, green vehicles, irrigation and agricultural equipment” says Ken Hayes, Head of Asset Finance at BOQ Finance.
2. Lower costs, greater profitability
Research[1] suggests that more sustainable businesses tend to perform better financially. One of the simplest cases for making greener choices is that using fewer resources, or more sustainable ones, can reduce production costs. Examining your supply chain and adopting more energy-efficient solutions can also help to increase productivity, reduce operating costs and improve profitability. The trend towards investment in clean-tech innovation also means that the more sustainable choice can often be the better option in terms of quality.
3. Reduced risk
Investing in cleaner energy sources – such as solar, wind and water hydro power or renewable fuels – can give your small business greater control over its energy supply and reduce the risk of exposure to unexpected fuel price hikes.
4. Customer demand
Consumer demand for sustainable products and services is rapidly increasing. A recent report by Harvard Business Review[2] highlighted that products marketed as sustainable grew more than five times faster than those that weren’t, and increasingly savvy customers want to know what the environmental costs of products and services are. So at a time when consumers are more concerned about the environment than ever before, making greener choices is likely to be an important component of your brand positioning.
So, businesses who adopt sustainable practices, and market them well, have the opportunity to broaden their reach, attract new customers and build loyalty amongst existing ones.
And from a business-to-business perspective, the increasing focus on environmental, social and governance (ESG) in global markets means that businesses are more inclined to do business with those that have similar values to their own.
It’s also an increasingly important issue for export businesses as big markets such as the European Union have started introducing higher sustainability standards for products sold within their region.
5. Investment potential
Consumer sentiment also influences shareholders, so commitment to sustainability practices is increasingly becoming a key metric in investment decisions. For example, a recent survey by EY found that 90% of global institutional investors look for consideration of ESG criteria in the business models of businesses they invest in. [3]
6. Attracting and retaining staff
Research suggests that sustainability practices are a prime driver in attracting and retaining talent with job seekers increasingly attracted to companies that care about the environment. Employees of businesses that promote sustainability are also more likely to have a higher sense of purpose and are more satisfied with their jobs.
To find out how BOQ Finance can help your business become more sustainable, talk to one of our dedicated finance specialists today on boqefcustomerservice@boqfinance.com.au
Finance provided by BOQ Equipment Finance Limited ABN 78 008 492 582 (BOQEF). BOQEF is a wholly owned subsidiary of Bank of Queensland Limited ABN 32 009 656 740 (BOQ). BOQ does not guarantee or otherwise support the obligations or performance of BOQEF or the products it offers. This blog post is for general information purposes only and is not intended as financial, taxation or professional advice. It has not been prepared with reference to the financial circumstances of any particular person or business and should not be relied on as such. You should seek your own independent financial, legal and taxation advice before making any decision about any action in relation to the material in this article.
1] https://sustaincase.com/companies-implementing-sustainability-policies-outperform-those-who-fail-to-do-so/
[2] https://hbr.org/2019/06/research-actually-consumers-do-buy-sustainable-products?
[3] “Global Institutional Investor Survey 2018,” EYGM Limited, 2018.
