Recent bouts of extreme weather and now the devastating bushfires that have been sweeping the country have brought the subject of sustainability into sharp focus in Australia.
For many businesses, being able to point to some ecological credentials, or at least a road to improvement, is now important from a customer and employee relations point of view. But it also makes business sense.
Even the biggest businesses are waking up to the need to contribute to a sustainable future. US investment giant BlackRock surprised many at the start of this year with a strong statement of intent that points to the links between climate change and the e
“Climate change has become a defining factor in companies’ long-term prospects” BlackRock CEO Larry Fink said. “Last September, when millions of people took to the streets to demand action on climate change, many of them emphasized the significant and lasting impact that it will have on economic growth and prosperity – a risk that markets to date have been slower to reflect, but awareness is rapidly changing, and I believe we are on the edge of a fundamental reshaping of finance.”
What Can SMEs Do for the Environment?
You don’t have to be a multi-billion dollar asset manager to make a difference. SMEs maybe small but there are a lot of them. Just as they collectively drive employment and economic growth, the eco-friendly measures they take will also add up to a significant change. This is both because of the cumulative effect of so many SMEs, and the fact that some will grow and become the next generation of larger businesses.
What’s more, businesses want to help. Even before the latest crisis, a 2018 survey showed that 9 out of 10 Australian business were concerned about the environment. Perhaps more surprisingly, 77% declared themselves ready to pay more for environmentally sThat’s a higher proportion than among consumers.
Top Business Sustainability Measures
The good news is that most sustainability measures don’t have to be expensive – and indeed many will pay off in years to come.
Ideas such as allowing a degree of home working, having a cycle park, or a hip office using up cycled furniture are all great for pleasing employees and impressing clients in a modern services setting. This kind of service sector business has no reason to be a heavy energy user and in the modern day it is perfectly possible to recycle 100% of office waste.
For manufacturing SMEs, those in logistics, or wholesalers, becoming eco-friendly may require more planning and investment. With smart business finance, however, a lot is possible. Whether you want to buy a fleet of less fuel-hungry delivery vehicles or electric vans; upgrade the manufacturing line to cleaner production methods; or move to buying more sustainable supplies, if your investment will improve profits in the long run it can usually be financed.
The study looked at 24,393 businesses across multiple sectors from 41 countries with varying economies, and consistently found that businesses that adopted environmentally sustainable practices came up against fewer financial barriers – leading to stronger profits.
“Different industries are more environmentally intensive, and different countries have different regulations and markets, so the impact of environmentally sustainable practices varies somewhat from situation to situation, but when we look at the pattern as a whole, it is very consistent,” lead author of the report Dr Rajabrata Banerjee said. “If a business tries to be more environmentally friendly, it will benefit financially.”
If you want to invest in making your business more sustainable, clean and profitable, you should consider cashflow finance as part of your funding mix. Call TIM Finance today to learn about how we can help you to grow, improve and invest.