Why green credentials are essential in business

There is an often quoted study from 2007 that showed that at that time, 53% of people – or 1.1 billion consumers – strongly preferred to do business with companies with a reputation for being green. Now, we are a whole decade on from that study, and green matters have become more than just a preference for a lot of customers, but a demand. As evidence of the impact of climate change continues to gather, and more and more sustainable alternatives are on offer, companies can no longer see being green as a slight competitive advantage, but as something that could literally be the deciding factor on whether a customer walks away.

Increased Awareness and Increased Scepticism

One of the things that has made the mainstream consumer desire for green businesses clear is, ironically, the fact that companies now make far less of a fuss about their green credentials in their marketing. There was a trend a few years ago of all kinds of big corporations, from oil companies to banks, highlighting their ‘greenness’ in their ad campaigns. This was, of course, an attempt to win the hearts and minds of green consumers as a growing market, however it was overdone to the point where it actually began to make consumers more sceptical of the green claims made in advertising.

Because it is so easy for consumers to fact check online and find out more about what a company is actually doing towards sustainability, it no longer pays off to appear to be taking green matters seriously as a business – businesses have to actually be doing it. It is also no longer something that works as a unique selling point – customers simply expect a business to be doing it transparently.

Investors and Green Businesses

A failure to meet expectations about things like carbon emissions, recycling and sustainability may not just be off putting to consumers, but also to investors. Whether investors themselves have preferences about green policies or not, analysts can see the way consumer trends are going and that, in a choice between two equivalent businesses, the greener one will win out in today’s market. Additionally, thanks to online trading platforms like City Index, there are now more and more casual investors participating in the stock market – people who think the same way as general consumers.

Being Green Actually Reduces Overheads Long Term

All of this so far may make it sound like businesses have to conform on green issues simply because the market expects it, however there are actually some good benefits for businesses in going beyond doing the bare minimum that is legally required of them on sustainability. Being green in operations by, for example, having energy efficient premises, can save a business a lot of money no matter what their scale. Businesses which have to do things like light hundreds of retail branches will save an abundance of money by switching to LED lighting, and when you consider the costs of running and cooling, say, a server farm, it is clear that any savings in energy that can be brought about by being more efficient and green will translate very quickly into money.

It is interesting to see how green business has gone from being something niche to the norm, and hopefully, this will benefit everybody.



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