Do Green Practices Pay Off in Business?

Several years ago, doing business in a sustainable way was primarily a marketing move on the part of businesses…..or because the owners were personally dedicated to saving the planet.

The question now is: After many years of awareness and progress in sustainable practices and products, does being “green” make economic sense for a business?

Growth, business, money.


First, lets’ explore how customers respond to businesses that conduct themselves in a sustainable way.

A recent study released by the Sustainable Furniture Council confirms that many participants in the research are concerned about environmental issues and are taking positive action in their own homes to address environmental issues.

Most of the people surveyed had concerns about many environmental issues, including global warming and indoor air quality. When questioned, the majority of the participants were concerned with recycling, landfills, extinction of species, depletion of natural resources and loss of rainforests.

Rubbish that can be recycledWhile this study found that participants were very concerned about many environmental issues, they weren’t necessarily inclined to have a positive view of environmental issues. They might not even have a positive view of “green” products. The concern comes because they are concerned that “green” products are more expensive, don’t perform as well or are not as aesthetically pleasing…and harder to find.   More than 60% had this opinion.

Because of this opinion of consumers, the Sustainable Furniture Council cautions sales people to “choose their words carefully.” Although consumers voice their concern with environmental issues, pushing the “green” designation when selling may or may not wood block with knot steel backgroundbe useful. Unless the consumer has something to compare your product to, they may be unaware of the cost difference. There still is a suspicion of “green” products because of the issues mentioned here.

The phrases that don’t set off alarms in the consumer are “environmentally safe,” “eco-friendly,” and “sustainable.” Others can cause hesitation in the consumer.


It is only within the past few years that businesses report that being “green” makes economic sense. In the past, it was done for marketing purposes.

In today’s world, it is much easier to use sustainable practices in your business and not be negatively affected financially. In a recent survey of executives and managers, almost half said that they were pursuing environmental practices because it made economic sense. Changes in mind-set, adjustments in processes, and collaboration with internal and external parties all play key roles in environmentally friendly innovations that generate profits,

Businessman with Energy and Environmental Concept

Despite the increased optimism about eco-friendly practices, there is still significant skepticism about conducting business in an environmentally friendly way. Some of the reasons for this are:

  • Businesses finding it difficult to quantify the effects of sustainable practices.
  • Reports that environmental concerns conflict with other important priorities.
  • Increased operational and administrative costs that are not always figured into the overall cost of doing business ecologically.

The other side of the coin is that some customers are willing to pay more for products that are made/produced environmentally.   It seems that Europeans are more likely than Americans, although there’s the phenomenon of Whole Foods.


It seems that the larger a company, the more likely they are to be able to implement environmentally sustainable practices.   Companies with over 100,000 employees are more likely to have a comprehensive sustainability strategy. According to an MIT study, the case is especially true of companies within the commodities sector.

So, in keeping with this, the companies that are at the forefront of sustainable business practices are the auto companies. Ford and GM are among the companies with the best sustainable business practices.  Right behind them are the financial services companies and then the large media companies.

It makes sense because the larger companies have the resources to hire internal staff and consultants to advise them on implementing sustainable business practices. With the exception of industrial services and media, survey respondents have indicated that sustainability related plans have contributed to their

An electric car charging in Californiaprofits. This is only within the last few years.

The most common outcomes stated in the survey were not necessarily related to reduced costs or improved margins. Instead, improved brand reputation, increased competitive advantage, and better innovation were the top three results that came from an agenda focused on sustainability.

It also seems as though profitability is not the only reason for making changes to become a sustainable business. It is clear that profiting from sustainability-related activities did not necessarily mean the changes were made out of altruistic motives. The top three factors that led to a shift in these companies’ business models were customer preferences, resource scarcity and legislative or political pressure.


So are the days making the excuse that sustainability is a luxury or only good for public relations reasons over?

We can only surmise that the results are mixed.   Sometimes it is and sometimes it isn’t.

As time goes by, it will not be an issue, but just a matter of normal business practice.