10 Sustainable Business Trends

Companies that fail to measure and manage their energy efficiency, utility usage and environmental sustainability efforts overall are at risk of missing out on new business, investment opportunities and their reparation with the communities they serve. That’s one takeaway from the latest State of Green Business 2015 report from GreenBiz Group, produced in partnership with Trucost, a leading research firm in the field of sustainability.¹

The report — particularly its list of 10 sustainable business trends of 2015 — cites megatrends affecting large organizations on a global scale. But so many of these trends affect businesses of all sizes, and in many cases the conservation, supply chain efficiencies and financial aspects of the issues and projects discussed also apply to the small and medium-sized businesses in the Pacific Gas & Electric Company (PG&E) service area.

As you read through this list, don’t be surprised if you get some new ideas on how you can improve the sustainability, and financial footing, for your own company.

1. Stranded assets become a corporate liability.

In global businesses such as fossil fuels, stranded assets refers to coal, oil or gas trapped in the ground — and on the balance sheet — when carbon taxes and regulations can make it economically unviable to extract them. By one estimate, as much as 80% of these resources remain trapped if certain climate change proposals are met.

As global firms and major banks work to calculate the costs, one lesson is clear to all, even for small businesses: It’s critical to identify all the costs, including “red tape” for sustainability-driven investments if they are to pay dividends in the long term. For small business owners, this means discussing the cost-benefit ratio and payback of sustainability upgrades with a PG&E Energy Advisor and trusted, experienced contractor. Delving into an energy efficient upgrade means looking at the investment at all angles – both fiscal and nonfinancial.

2. Sustainability solutions become open and distributed.

More than a decade ago, thousands of individuals in the software world agreed en masse to cede their rights to coding and related innovations to rally around standards that promoted greater industry-wide advances. Today, the same open mindset applies to some of the world’s biggest companies to distribute among each other key advances that are now being used to create a new generation of low-carbon technologies. By acting locally, small businesses can also pool resources and share best practices to implement tips for reducing energy and resource use, and achieve great savings. Local business leaders may want to consider holding lessons or discussions at a chamber of commerce event or local business association to encourage the adoption of energy efficient technologies.

3. Supply chains become more transparent.

Better visibility between supply chain partners can lead to big sustainability improvements. Food industry giants have collaborated to create standards for greater sustainability in cattle ranching, seafood farming and more. Kimberly-Clark drove creation of a council that has led to the Better Cotton Initiative; and other programs exist for biofuel, cocoa, leather, minerals and diamonds, palm oil and sugar. The Internet, big-data analytics, sensors, satellites and even bar codes on packaging are part of what’s enabling all businesses to operate not just responsibly but profitably — down to streamlined logistics and transportation fuel savings that equate to cost avoidance for all businesses.

4. Water risk trickles from awareness to action.

How important is water to financial security? Very. Factories and farms in the U.S. have long been taking advantage of recycled water. Conservation can feed the bottom line for all kinds of businesses everywhere, especially in drought-impacted regions like California.

5. Businesses lead the charge for renewable power.

Dozens of global businesses from consumer products and retailing to high-tech sectors have joined an initiative called RE100 and are showing how renewable energy investments can provide financial returns. Many have pledged to operate 100% on renewable power. At IKEA, renewable energy investments close to $1.9 billion are behind new wind farms and rooftop solar panels — the latter being eminently employable by small businesses, with help from local utilities and government. On a small business, local scale, owners and property managers can invest in sustainable solutions like LED lighting, heating, ventilation and air conditioning economizers and other similar technologies to reduce energy waste and reduce operating costs.

6. Companies turn to science-based goals.

The problem with many corporate sustainability commitments is a lack of standards against which to assess them. The rise of “science-based goals,” and “doing the math,” is resulting in better benchmarks. BT, the British telecomm giant, led the way as early as 2008 by linking greenhouse gas reduction goals to its economic contributions to the company’s bottom line. As climate change groups work globally, small businesses can likewise learn to “do the math” with better accounting — literally, on the ledger — of the relationship between environmental benefits and the cost savings they can produce.

7. Food waste emerges from the dumpster.

Research indicates that roughly a third of all food produced globally is lost or wasted, severely hampering industry’s ability to efficiently feed a projected 9 billion people living on the planet in 2050. Global companies are studying the causes as well as business case and actions — such as reducing, donating and recycling — to address the issue. Manufacturers are partnering to divert and “rescue” waste for many and varied food and agricultural uses. The benefits to small business can range from reducing the cost of waste to benefiting the community at large.

8. Money flows where sustainability grows.

The double-digit growth seen in “responsible investment” has led to the realization that companies who ignore environmental issues do so at their peril — or their competitor’s benefit. The investment community as well as large, established companies are well aware that startups with new technologies and business models are driving innovations that address sustainability challenges — proving that small businesses can learn from their global cousins as well as beat them to the latest innovations.

9. Companies catalyze climate action in cities.

From water shortages in Rio de Janeiro to food insecurity in Fiji to disasters at home in the form of fires and hurricanes, citizens in every corner of the globe carry the scars of day-to-day climate volatility. But did you know that local business, government and technology activities can help counter their financial impact? Emission reductions, renewable energy, the smart grid, even local street-light and traffic systems play a role. In fact, if your small business is considering a new construction or major upgrade project, green building guidelines can also help protect your facility from the vagaries of unpredictable climate events.

10. Conservation investing’s stock rises.

An estimated $300 billion in investments is needed each year to meet the world’s environmental conservation challenges, and private industry is mobilizing to help drive “for good” investments where public dollars fall short. Billions of “impact capital” investments have already gone to environmentally minded water, food and habitat protection projects worldwide.

How do such global initiatives play out at the local scale? The axiom “think global, act local” is in full effect in California, which pioneered the concept of trading real estate credits to protect endangered species. One landowner received $125,000 for protecting the habitat for a small bird called Least Bell’s Vireo!

PG&E offers additional resources to help you pioneer your own sustainability investments. Be-fore you begin, download this free PDF eBook: "Your Insider’s Guide to Financing Energy Efficiency Projects".

1. GreenBiz Group
2. Pacific Gas and Electric Company