6 Ways Sustainability Equals Profits
August 2021
By Nico Hohman

For businesses to succeed today, and to be around tomorrow sustainable business practices must be integrated into their organization's core strategy. Sustainable business practices have evolved in recent history, and businesses should take heed to incorporate the environment into the mission statement. Much like employees, vendors, and clients are stakeholders in a company, so too should companies treat the environment as a major stakeholder within the company.

To better help you understand how to incorporate sustainability into your business practices, here are some ways that helping the environment also helps your business.

1. Lowering Costs

Sustainability has a direct correlation to the bottom line. Installing energy efficient products into your office or adopting sustainable practices - while they may increase your costs initially - will ultimate drive up your profits as your long term costs decrease. Plus, you get the added benefit of saving money while saving the environment.

2. Increasing Revenue

CBRE, the world's largest commercial real estate firm, recently surveyed commercial properties in San Diego, Calif. and found that green buildings produce rents 18% higher than their non-energy efficient counterparts. (That translates to $0.40 per square foot more.) Plus, vacancy rates at green builders were lower, at only 11.7% compared to 15.7% for non-green buildings.

3. Improving Cap Rates

In the real estate world if you can charge higher rental rates while having more people in your buildings you will always make more money. From our last example, we saw that energy efficient buildings not only produced higher rents but also had more people in their buildings. According to the Appraisal Institute, this can translated to an almost 11% higher cap rate.

4. Building Brand Awareness

Sustainable brands, or brands that are perceived to be sustainable, can significantly outperform their peers in the market. Based on figures showcased by GreenBiz.com, 75% of retailers say sustainability and sustainable practices have improved their brand image. But, it is important to not "greenwash" your clients and your consumers with too much marketing of sustainable and green practices, especially if you do not actually perform the sustainable practices you claim to preach.

5. Promoting Wellness

Older, non-sustainable buildings can develop "sick building syndrome." Essentially, the materials and products in an older building eventually rot, decay, or emit toxic fumes over a period of time. For employees or clients trapped inside of these spaces for extended periods of time, the building can actually make the individuals sick. Newer, sustainability-built structures use materials and methods that have been rated and tested to ensure that this does not happen.

6. Retaining Clients

Green buildings and green spaces typically are more aesthetically pleasing than those spaces that are not designed and built sustainably. As such, customers and clients tend to stay in spaces longer that are more pleasing to the eyes, ears, and mind. Steps as simple as opening blinds on a window, installing LED lights, and planting indoor trees in a work spaces can improve the mood and performance of those working there.

The next time you look at your mission statement, see how you can incorporate sustainability into your business practices. It is not just good for the environment, it is good for your bottom line too.

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Nico Hohman, the Founder of Eaactive Leadership, is an award-winning leadership, real estate, and construction consultant with an extensive background in business development, sales training, and change management roles throughout the United States. Nico serves business executives and aspiring leaders on how to sustainably grow their organizations through better use of their physical and knowledge-based assets. Nico's focus is to help others be leaders in their communities, guide their followers, and make better decisions using the findings of their personalized Eaactive Leadership Style Assessment (ELSA). You can connect with Nico on LinkedIn and get the latest daily updates on the Assorted Questions & Such blog.

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