When budgets are stretched, becoming more sustainable may seem like a big investment, but it can be great for business. Read on to discover how adapting to a more eco-friendly business strategy can generating cost-savings and efficiencies to boost your bottom line.
Marketing benefits of sustainability: Growing your sales
While many companies were contracting their sustainability practices due to economic uncertainties, Lost Sheep Coffee founder Stuart Wilson took the opposite approach, using last year to accelerate his vision of a coffee business that’s as eco-friendly as possible.
“We strongly believe this contributed to our huge growth in sales during 2020,” says Wilson. “At a time when many more people were shopping online, people had time to research and chose products that better matched their eco-views. We saw our online store sessions increase by 167% and our conversion increased by 98%.”
The impact on the bottom line? Wilson’s profits grew by an incredible 450% in 2020. Going green had given his marketing team “truly amazing information to share and attracted new family members to Lost Sheep Coffee,” says Wilson.
There’s ample evidence that consumers want to put their money where their mouth is and make a difference with their purchasing power: 59% of consumers surveyed¹ say they want brands to make a stand on climate issues.
William Church, Joint Managing Director at Cheaney, an English shoe brand, says the green agenda has helped grow its market share: “From 2013 to 2020, Cheaney was able to grow annual turnover from £4 million to £11 million. Our core target demographic has grown increasingly aware of the origin, ethics and carbon footprint of the products they buy.”
Generate savings with sustainable strategies
A common misconception is that going green will make businesses more expensive to run, but greening supply chains and energy use, reducing material usage and waste, and using recycled products can all offer significant bottom line benefits.
In our podcast Business Class: Money Minutes – listen and subscribe here – Kaye Sotomi, founder of Chop Chop London, describes how he applies sustainability to his hair salon brand, encouraging customers to opt for a dry cut which generates savings for both the customer and the business: “By cutting on dry hair, we use 70% less water than your traditional salon service.”
Plus, Chop Chop reduced renovation costs from £60,000 to £30,000 by refurbishing its Shoreditch salon with recycled or second-hand material.
Energy efficient lighting is an easy-to-adopt green strategy for businesses looking to reduce their carbon footprint. Church says that a full audit of Cheaney’s factory lighting highlighted a cost saving opportunity with a payback period of 2.5 years on investment: “On our electricity consumption, we estimate that there is a 90% cost saving by using energy-efficient sensor respondent lighting and longer-lasting light tubes.”
Drive efficiency by reusing, recycling, and reducing waste
Assessing the efficiency of business operations and looking for ways to reduce waste or reuse material can pay back big dividends.
Lost Sheep Coffee introduced compostable airtight Nespresso compatible capsules, using a waste product of the paper industry that would usually be destined for the incinerator. In 2020, the coffee brand took sustainability a step further, reducing its product packaging by 38% which in turn reduced shipping costs of products – this cost benefit was passed on to the consumer: “It meant we were able to keep our ‘free’ delivery minimum shopping spend extremely competitively low,” says Wilson.
By thinking creatively about your industry waste, you may even find ways to create innovative, new products: “hair recycling is something I’m really excited about,” says Sotomi, “you can use it as a thermal insulator which could be included in insulating buildings and homes for the future. It's a great sponge, if you think about how your hair soaks up water.”
Brands that make it easy for the consumer to be good in a time of climate crisis stand to make big wins, gaining a competitive advantage with greater customer loyalty and trust: “I cannot state enough the tremendous amount of benefit being a sustainable business brings in the loyalty perspective from our customers,” says Sotomi, “it also helps us attract talent.”
Wilson advises to “let your customers make the choice to get involved, offer a ‘plant a tree’ option at the check out and explore offsetting your employees carbon footprint, it is simpler than you think.” However, showing the consumer how they are making a positive difference by purchasing your product, rather than talking about the good your company does, is crucial to making your green strategies resonate.
When you invest in sustainable business strategies, consider using an American Express® Business Card. You get up to 54 days to pay your bills², giving you more cash flow flexibility, so you can ensure there's always cash available to meet your regular business obligations.
What’s more, every pound you invest in your business works harder for you by earning Membership Rewards® points³, which you can use to further your investment into sustainable practices.
Listen to the Business Class: Money Minutes podcast here.
- FleishmanHillard Fishburn, 2019
- The maximum payment period on purchases is 54 calendar days and is obtained only if you spend on the first day of the new statement period and repay the balance in full on the due date.
- Membership Rewards points are earned on every full £1 spent and charged, per transaction. Terms and conditions apply.
