This is the Sustainability Secret You've Been Waiting For!
Let me fill you in on a little secret. Beyond providing high-quality information to help investors make smarter decisions and reduce their risk while investing and protecting our environment, there's money in sustainability.
Not only is there money in sustainability, but it amazes me how many business leaders need to see it and take advantage of it.
Let's use the following scenario as an example. It's one I see all too often.
Increase profits without increasing sales.
Consider a small manufacturer that makes several cleaning solutions for the professional cleaning industry. The profit margins on these products are very thin, about five to ten percent. This manufacturer, like many others, has historically believed the only way to increase profits was to increase sales.
But then they started implementing the following sustainability practices:
Reducing the amount of energy they used for manufacturing, lighting, heating, and cooling their facility,
Transferring to more fuel-efficient delivery vehicles.
Find ways to reduce water consumption for manufacturing processes, washing vehicles, and restrooms.
Reducing waste, especially hazardous waste.
As a result of their sustainability efforts, and by just focusing on the low-hanging fruit, this manufacturer was able to reduce their operational costs by an estimated $20,000 per year.
Moreover, 100 percent of these savings went directly into their bottom line. They did not have to bother with the cost of goods, sales expenses, customer service support, or anything. It was $20,000 - pure profits.
On the other hand, to pocket the same $20,000 using the old system - just increasing sales - would require an increase in sales of at least $200,000 to $400,000, depending on the profit margins.
They also discovered that their focus on sustainability helped open doors for their salespeople. Their sales staff can now compete for larger customers because they can now provide sustainability reporting, so many of these larger organizations require it before making purchasing decisions.
The Big Takeaway
Sustainability invariably reduces costs and is a crucial factor in running any business. And this applies to all segments of the professional cleaning industry – manufacturers, distributors, and cleaning contractors.
Further, it helps weather the storms that we have no control over. And for businesses impacted by inflation and the aftereffects of the pandemic, it can mean the difference between a profitable business and one struggling to keep its head above water.
This example is an important reminder when we make the business case for sustainability. Sustainability is not just about taking care of workers or protecting the environment. Sustainability is a foundationally sound business strategy.
Furthermore, too often, sustainability is perceived as a cost. In reality, and as illustrated, it yields cost savings that increase company profits. This makes sustainability an investment for all organizations.
It's Just the Beginning
I want to add one more thing. We are just in the beginning stages of realizing the many benefits of sustainability.
Where we are today regarding sustainability reminds me of the introduction of personal computers a good thirty years ago or more.
Those early machines were expensive, heavy, and had small green monitors and one or two slots for a floppy disk, but they couldn't do all that much.
Decades later, well, I don't have to tell you, it's like night and day. I see the same transformation evolving with sustainability: cost reductions, increased profits, along with protection for our people and our environment.
Stephen P. Ashkin is president of the Ashkin Group, a consulting firm specializing in Green Cleaning and sustainability. He is considered the "father of Green Cleaning" and the founder of the Green Cleaning Network.
He was just recognized by ISSA, the worldwide cleaning association, as one of the 100 most important contributors to the professional cleaning industry in its century-old history.
