Sustainable Business Is Business That's Sustainable

By Jeff Seifert, Managing Member and COO, Streamlinx

The United Nations often defines sustainability as “meeting the needs of the present without compromising the ability of future generations to meet their own needs”, and typically centers on 3 major pillars: economic, environmental and social.

Sustainability is becoming a bigger factor in what is driving decisions for corporations. Operators in our industry have the opportunity to take the lead on informing their clients about the advantages and risk avoidance that energy efficiency initiatives can provide. The alternative is to be more reactive and wait for their clients to discover the risks on their own, or worse, suffer the consequences of not being prepared.

This is an opportunity for service providers in this industry to take the lead and become their customer’s trusted advisor.

Why Should We Care About Sustainability?

There are many reasons that climate initiatives are important to corporations (the clients of energy service providers).

Cost Savings: The cost advantages of energy efficiency are well-documented. In addition to delivering an average ROI of 18% (source: American Council for an Energy-Efficient Economy), energy-efficient projects can deliver operational cost savings of between 8 and 15% and increase building value between 7 and 13%.

Brand Reputation: Consumers are becoming increasingly conscious of environmental issues, and they often prefer to support companies that demonstrate a commitment to sustainability. Corporations that are perceived as environmentally responsible can enhance their brand image and attract more customers.

Market Access and Opportunity: The transition to a low-carbon economy presents a new market for innovative products and services. Corporations that develop sustainable solutions can gain a competitive advantage and capitalize on emerging market trends.

A study by McKinsey & Company found that 70% of companies consider sustainability when making procurement decisions, indicating a growing demand for sustainable supply chain solutions. These policies may require suppliers to meet specific environmental criteria, such as reducing greenhouse gas emissions, using renewable energy, or implementing sustainable practices throughout their operations. Failure to meet these requirements could result in disqualification from procurement opportunities.

Attracting and retaining talent: Finding and keeping talented employees is considered one of the top challenges faced by all industries.

• A survey by Cone Communications found that 64% of millennials consider a company's social and environmental commitments when deciding where to work.

• According to a study by Deloitte, 56% of millennials say they have ruled out working for a company because of its values or conduct.

• The Harvard Business Review reports that employees who perceive their company as having a strong environmental record are 16% more satisfied with their jobs.

• According to a study by the World Green Building Council, employees working in green-certified buildings report 15% higher levels of productivity.

Ethics and social responsibility, including environmental stewardship:

• Transparency and Accountability: The Edelman Trust Barometer (Chicago-based consultancy) found that 81% of respondents say that being transparent about business practices is the most important factor in building trust with stakeholder.

• Supply Chain Ethics: Over 70% of companies consider sustainability when making procurement decisions, indicating a growing emphasis on ethical sourcing practices.

• Resiliency: A report by EcoVadis found that companies with strong sustainability performance tend to have more resilient and responsible supply chains, reducing the risk of supply chain disruptions and ethical lapses.

• Long-Term Value Creation: Companies that integrate sustainability into their core business strategy tend to outperform their peers financially over the long term.

Regulatory Compliance: Knowledge of the regulations in place can help clients avoid risk (and detrimental costs).

The World Bank reports that over 80% of countries have environmental legislation in place, highlighting the global importance of companies complying with environmental regulations and standards. Some of the more significant (and visible) regulations include:

• New York's Local Laws 97, 84, and 87 aim to address climate change and promote energy efficiency in buildings through emissions limits, benchmarking requirements, and energy audits.

• Similarly, Chicago has implemented energy benchmarking ordinances and codes to reduce energy consumption, while also pursuing sustainability goals outlined in its Climate Action Plan.

• California's Climate Corporate Data Accountability Act, signed into law by Governor Gavin Newsom, will require large U.S. companies to report their greenhouse gas emissions, despite opposition from some business groups. However, several major corporations have endorsed the regulation, recognizing the importance of environmental accountability.

Risk Mitigation: Supply chains today extend around the world and are vulnerable to natural disasters and civil conflict. Climate change, water scarcity, and poor labor conditions in much of the world increase the risk. McKinsey reports that the value at stake from sustainability concerns can be as a high as 70% of earnings before interest, taxes, depreciation, and amortization.

In the largest study on climate change data and corporations, 8,000 supplier companies (that sell to 75 multinationals) reported on their level of climate risk. Of the respondents, 72% said that climate change presents risks that could significantly impact their operations, revenue, or expenditures.

What Is Our Role?

The guiding light here is to provide visibility on the entire impact of a project on all financial, environmental and risk factors. This includes the reduction in energy use, cost savings and ROI, emissions impact and penalty avoidance.

The more energy we can save and the faster we can implement will direct our specification and project deployment practices as well as helping to lead our customers toward a more advantageous energy outcome.

The sustainability movement is gaining momentum, and we in the lighting industry have the opportunity to help shape the future.

New Opportunities Require New Methods

Energy efficiency project sophistication has evolved significantly over the past decade, and so have the tools and techniques required to assess, design, communicate and deploy them. This includes the ability to make a strong sustainability case and win a larger share of projects. To take your sustainable project game to the next level, feel free to reach out to the Snap Count team for a fresh perspective on mastering your project operations.