Every business wants to market itself as an eco-friendly, sustainable option. However, you can’t authentically claim to be climate-conscious if you don’t set a reasonable budget aside to further environmental causes.
Setting a green budget isn’t just good for your brand. It can help you land valuable grants and may even improve your financial outlook in the medium to long term.
But actually, setting funds aside for sustainability and environmental preservation can be challenging. Fortunately, you can find guidance from international governing bodies and other corporations that take their commitment to climate change seriously.
Budgeting for Your Business
Every business needs a clear budget. However, sustainable budgeting works a little differently than traditional budgeting.
When budgeting for sustainability and environmental preservation, make a list of “needs” and “wants.” Under your “needs” list, include sustainability basics like:
- Recycling bins
- Sustainable packaging
- Training courses for environmental protection
- Energy reduction schemes
These basic needs are essential to meet minimum sustainability standards. Ensuring that your offices are well-insulated and that your staff has adequate access to recycling is the bare minimum expected of sustainability-oriented businesses.
Next, make a list of your “wants.” This list may include things like:
- Green commute schemes
- Renewable energy installation
- Investment in rewilding projects
These schemes are usually more expensive and will require some time to complete. However, budgeting for solar panels and commute schemes can save your employees money and reduce your overheads in the long run. They will also further your commitment to sustainability and help your staff lead more eco-friendly lives. Account for these expenses and their long-term profitability while creating your next budget.
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Sustainability and Profitability
Data collected by McKinsey shows that sustainable businesses are more profitable than their competitors and are better positioned to meet the demands of the future. Publicly traded businesses also outperformed their rivals on the FTSE 500 and returned higher dividends for investors.
Businesses that practice sustainability and environmental preservation may also be eligible for public grants and government funding. External funding can be particularly useful if your business has a tight profit margin but a strong commitment to climate activism.
You can secure funding for preservation projects through rewilding schemes. Rewilding projects may be on the backburner in the UK for now, but projects for rewilding are still being funded with grants up to £15,000 across England, Wales, and Scotland. This money can be used to develop green spaces that your business owns but doesn’t utilize.
You can find further funding opportunities through GOV.UK’s database for financial support. Filtering your search to find “sustainable” opportunities yields plenty of results and funds that can be put towards research projects, energy installation, and partnerships.
Sustainable Practices
You can squeeze more from your sustainability budget by making a few future-oriented changes to your current operations. Start by installing alternative energy generation methods, like solar panels. Solar panels may require an initial outlay of funds but soaring energy prices mean that solar panels will “break-even” in just over 4 years.
You can also streamline your marketing to improve your sustainability and reduce your costs. Consider using personalised advertisements to reduce waste and improve efficiency. Personalised advertisements can save your business up to 40% on marketing expenditures and minimize waste during the production phase. They also require less energy, as you’ll spend more time working with highly qualified, hot leads.
Amplify your impact by working with sustainable stakeholders. Sustainability partnerships maximize your investment by connecting you with other like-minded businesses across the world. Partnerships can ease the strain on your budget, too, as you won’t be the only business with commitments to combating climate change and preserving delicate environments.
Improving your operational efficiency can help you reduce your costs and free up funding for sustainability and environmental preservation efforts.
Carbon Calculations
Creating a clear budget ensures the financial security of your business in the long term. However, sustainable businesses should also calculate their carbon use and use these findings during the decision-making process.
For example, if you’re considering a new supplier, you may want to assess their current carbon footprint. Use the data you collect alongside things like fees and costs to find a new supplier that suits your budget and helps you achieve your sustainability goals.
Accounting for all emissions — even indirect ones — ensures that you can be honest about your business's carbon footprint and ecological impact. Use a range of calculation methods, like spend-based methods and activity-based methods, to gain a deeper understanding of your current carbon use.
Conclusion
Creating a budget for sustainability and environmental protection is vital if you want to see your green efforts through. A clear budget will help you account for larger expenditures like solar panels and smaller fees like recycling costs and training programs. Remember to take advantage of government funding and reach out to like-minded businesses to form partnerships and amplify your impact.
by Sam Bowman
