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Sustainability is on the minds of many people you know. As awareness about climate change and environmental consciousness grows, pressures fall on businesses from society, the government, shareholders, and employees. Profit isn't the only focus for businesses. Rather one focus is how business is done and how it impacts the environment. 

Corporate sustainability is here to stay, so business owners must consider the financial implications changes will have on their business. By embedding sustainability in business models and products, businesses might see a return on investment. Here's how sustainability can impact your business' finances. 

What is Corporate Sustainability?

Corporate sustainability is about more than reducing a business' carbon footprint; it's about ethical practices. A sustainable business works with societal and environmental goals; it's a business strategy for growth that works with people and the planet. Corporate sustainability encompasses three pillars:

  1. Environmental: includes strategies to reduce a business's carbon footprint, eliminate greenhouse gas emissions, use green energy, and reuse and recycle. 

  2. Social: practices that promote the health and wellness of employees and their communities. The social pillar can include actions like establishing a company culture surrounded by safety and ensuring the customers are informed about how to safely use products. 

  3. Economic: ensuring the business can survive while making a long-term positive impact on the environment. An example of the economic pillar is reducing costs to make products by using less plastic or creating green jobs. 

Financial Implications of Going Green

No matter what industry a business is in, any company can take advantage of going green. Businesses can get benefits that include tax breaks, subsidies, savings, and increased popularity as they meet the demands of their customers and employees. Here are the financial benefits of corporate sustainability. 

Increased Profits

With more people caring about sustainability, consumers are demanding natural products from responsible vendors and suppliers who use green practices. Many consumers are willing to pay more for brands whose values align with their own. Most important to these consumers are:

  • Goods made from natural and organic ingredients
  • Eco-friendly brands and products
  • Brands with social values
  • Environmentally friendly packaging

Tax Benefits

The government understands the demand and need for sustainable business practices. To support environmental friendliness, it offers tax advantages to green businesses. You can use these tax benefits when filing your taxes with professional tax software to get: 

  • Rebates
  • Tax breaks
  • Monetary enticements

Financial incentives such as these are offered at the state and federal levels. For example, you can receive business deductions for installing energy-efficient appliances in your business, such as HVAC and hot water systems. 

Government Subsidies

Tax breaks are a significant advantage of going green, but businesses may also qualify for government subsidies. For example, the Environmental Protection Agency (EPA) provides grants for qualified programs for businesses that use environmentally friendly approaches in their business operations. 

In addition, the Small Business Association (SBA) offers financing to businesses that support green solutions in a variety of industries. 

Increased Savings

Environmentally responsible businesses can save money in a variety of ways, including using organic and natural resources and making the switch to smart energy. Your business can reap these rewards by:

  • Recycling
  • Water-saving appliances
  • Energy-efficient equipment
  • Solar power
  • Reduce waste

Easier Hiring Process

When many businesses consider the types of business operations that cost them the most money, the human resources department typically doesn't make the top of the list. However, recruiting and hiring employees can be expensive. Not only does having a vacant position for too long disrupt business operations and make teams less efficient, ultimately costing you more money, but the process of recruitment and hiring can be costly. 

By finding top talent and making them want to stay with your business, you can save tens of thousands of dollars. While becoming environmentally friendly likely won't be the main reason an applicant is interested in your open position, it can make your offer more attractive than your competitors. By hiring top talent, your business can earn more money and not have to worry about turnover. 

Healthier Employees

When you have a corporate sustainability plan, you can make sure your workers are at the forefront by focusing on their health and safety. By providing organic, healthy foods in the lunchrooms, better air quality systems, and choosing safer cleaning chemicals, you can keep your employees healthier, which means there will be fewer sick days. 

Appease and Attract Shareholders

If your business needs investors, then you'll need to make your business more attractive than your competitors. Investments in fossil fuels are decreasing while investments in sustainability are increasing. Not only do shareholders want to work with companies whose values align with their own, but sustainability can promote economic growth, which puts more money in their bank accounts. 

Not only that, but investors want to add more sustainability elements into their portfolios to reduce risk exposure and improve resilience. By incorporating an investment model that includes ESG-optimized opportunities, you can ensure higher returns for your investors. 

Other Benefits of Sustainability for Businesses 

While many business owners only care about their bottom lines, others care about improving all aspects of their business. Sustainability offers these other advantages for businesses:

  • Drives innovation
  • Makes businesses consider long-term solutions
  • Fosters collaboration

Your Business Reputation

While there are financial implications in going green, one of the biggest benefits you'll have is an improved reputation. Using eco-friendly practices will make your business more appealing to customers, clients, and even employees. You can expect more sales, happier employees, and build an ethical company culture with a better reputation. Not to mention, you will be helping save the environment one step at a time.

Remember, corporate sustainability has three pillars that all businesses must consider before executing a plan to become green. First, it's best to strategize how you can make small improvements in your business so you don't disrupt major operations while you make the shift to a business that focuses on sustainability efforts. As a business owner, make sure you include other decision-makers in the process of implementing a corporate sustainability plan. 


Matt Casadona has a Bachelor of Science in Business Administration, with a concentration in Marketing and a minor in Psychology. Matt is passionate about marketing and business strategy and enjoys San Diego life, traveling, and music.

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