Study shows financial benefits of being green
Environmental update 13/01/2012
Defra has published evidence showing the financial benefits of
green business. Two thirds of businesses surveyed either have
increased sales, or expected to do so since implementing an
environmental management system (EMS).
The study of 31 small and medium sized enterprises (SMEs) shows
significant financial benefits to businesses from developing a
certified EMS. Most businesses reported an increase in sales as a
result of their EMS; recouping the costs of implementing the system
within just one month. Businesses that invested the most in
implementing an EMS made the biggest cost savings.
SMEs are a vital part of the local and national economy
accounting for 99.7% of all UK businesses and providing 60% of all
private sector jobs in 2009.
The study demonstrated the increasing importance of corporate
responsibility in business:
- For most businesses, commercial and marketing opportunities
were found to be the biggest motivations for developing an
EMS.
- Almost all businesses had received requests for information
from customers about their EMS since implementing it.
Environment Minister Richard Benyon said: "All businesses should
be planning green and growth together - thinking strategically
about environmental management leads to more sales, bigger profits
and a more attractive business to clients and investors. It's one
of Defra's top priorities to build a strong and sustainable green
economy that is resilient to climate change. With business, we are
working to green and grow our entire economy, protecting our
environment and creating new investment, technologies and
opportunities for trade."
Key Findings
Commercial and marketing opportunities were by far the most
important initial trigger for the SMEs' decision to adopt an EMS,
suggesting that this is more important than cost savings in
converting SMEs to the benefits of EMS.
Certified EMS delivered cost savings for the majority of the 31
SMEs, with an annual average saving over 2 years of £4,875 per £m
turnover. The costs of certifying and implementing the EMS were
calculated at £1,362 per £m turnover (annual average over 2 years),
therefore suggesting a payback period of 3 months for the cost
savings.
All but one of the SMEs in the study had received requests for
information from customers about their EMS and over a half of the
SMEs had in turn contacted their suppliers.
Just over a third of SMEs in the study felt they had achieved
new business sales as a result of their certified EMS, quoting an
average value of £14,961 per £m turnover in the year following
certification.
The study's data also showed that 28 SMEs made an average
cumulative saving in carbon dioxide equivalent (CO2e) of 38.9
tonnes per £m turnover per SME and that the carbon savings improved
over time, with year 2 figures up 59 % on year 1.
If
you would like further information, and already subscribe
RBS
Mentor, please
call the Advice
Service. If you would like more information on
how Mentor could help your business in situations like this and
many others, contact
us today for
information.
Next story - Failings in H&S will
soon cost you directly
Previous story - Single environmental
body in Wales