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How sustainable practices can pay big dividends Add to ...

Canadians have come a long way over the last decade when it comes to awareness about environmental issues and the importance of sustainable practices. And entrepreneurs are no exception.

An increasing number of business owners are committing themselves and their companies to improved environmental performance. This is good news for the planet and the bottom line, says Ian MacFadden, Vice President, BDC Financing and Consulting in Mississauga, Ontario.

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“A proactive approach to sustainability can pay dividends in reduced waste, higher efficiency and increased customer engagement without requiring large capital outlays,” MacFadden says.

A 2007 survey by the Canadian Federation of Independent Business identified the most important environmental issues for entrepreneurs. At the top of the list were recycling (59.8%), energy conservation (56.1%) and clean water and sewage (50.8%). Note that the top two, at least, involve process changes that don’t necessarily require large capital expenditures.

The study also found a near consensus on the idea that it’s possible to grow the economy and protect the environment at the same time. And entrepreneurs indicated that they are motivated to protect the environment both as a reflection of their personal views and as a potential source of cost savings.

MacFadden says there are at least 3 practical reasons for undertaking an environmental review of your business and then taking action to improve your performance.

  1. The trend toward resource conservation and sustainable development is here to stay. It has grown over the past 50 years and will advance even faster over the next 50.
  2. Businesses that supply large corporations are increasingly being required to improve their environmental performance. For example, Walmart, the world’s largest company, now obliges its suppliers to quantify and reduce greenhouse gas emissions. Companies looking for business opportunities in supply chains would be wise to act now on improvements. One important way to achieve the goal is to implement an ISO 14000 Environmental Management System (EMS).
  3. Consumers are leading the environmental awareness trend and will increasingly “vote with their wallets.” Products and services that are eco-friendly are already in higher demand, and overall corporate environmental responsibility is a key consideration for consumers. In fact, a 2009 report by the Conference Board of Canada predicted that a green marketing strategy will be the most important source of competitive advantage for companies in the future.

However, the Conference Board report also warns that green strategies must be backed by real action. Otherwise companies leave themselves open to accusations of “greenwashing.”

The survey found that three-quarters of Canadian consumers believed that “environmental claims were often just marketing ploys” and 65% said the term “green” had been used so often it did not have much meaning anymore.

“It’s never too late to get started on greening your business,” MacFadden says. “For all of us, becoming more environmentally sensitive is a work in progress. You don’t have to be perfect; but you do have to do more than just talk about it.”

“So go ahead and get your team involved in building a more sustainable business. And when you have made real progress, tell your customers about it.”

“That’s what we call good business.”

Content in this section is provided in partnership with the Business Development Bank of Canada. BDC provides entrepreneurs with financing, venture capital and consulting services. To find out more go to BDC.ca.

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