How Going Green Can Win You Contracts, Clients, and Working Capital

Originally published on B2B.DnB.com

What if you could reduce your carbon footprint, make a positive impact in the world, and snag the attention of venture capitalists while you’re at it?

No, it’s not a dream come true. It’s one of the latest trends in supply chain economics.

IFC and Puma are leading the way with a groundbreaking partnership that gives their suppliers access to affordable working capital – and all for going green.

In this new program, the fees suppliers pay to borrow money depend on how they rank in areas like environmental impact, health and safety, and social standards.  The more sustainable they are, the lower the cost of the credit.

As a diverse supplier, you have an emerging opportunity to ‘greenify’ your products and services – and not only because it’s good for the planet. Going green has economic and business-building rewards as well.

Here’s how going green can improve your business’s reputation, win you new contracts, save you money on operating costs, and get you access to working capital.

Save money on-site

One of the most immediate benefits of going green is saving money. Hard costs like electricity, air conditioning, and lighting can cut into your small business budget and force you to spend precious dollars on the cost of building maintenance.

But when you work to improve the sustainability of your workspace, office, or building, you’ll be able to save hundreds, even thousands on operating costs and utilities throughout the year and long-term.

And since everyone loves saving money and saving the planet, your commitment to go green will only improve your reputation in the eyes of clients, customers, and competitors.

So, what kind of sustainable upgrades will save you the most?

Common green building upgrades include…

  • LED lighting
  • Low-flow and automatic sink faucets
  • Green hand dryers in restrooms
  • Paperless offices
  • Energy saving heating and cooling systems

Wait a second – aren’t energy-efficient upgrades expensive?

While the upfront cost can appear pricey at first glance, the money you’ll save over time promises an astonishing ROI – often within months of making the upgrades.

  • Ace Armature Motorshop, a motor service small business in Stockton, California, saw a 50% reduction in their energy bill after installing energy efficient lighting.
  • Four Points Sheraton saved some $22,000 in energy costs after installing efficient lighting and laundry in their hotels.

When you make energy efficient upgrades, you’ll be able to put the money you save back into your business. With it, you can streamline operations, expand into new markets, develop new products, and increase your overall marketing spend to win even more business.

Reduce operational costs

When you change the way you develop products and services, and opt for more sustainable production methods, your changes can have a ripple effect on your business’s bottom line.

Suddenly, you’re not just saving money on your electric bill or cooling costs. You’re seeing a measurable increase in profits thanks to the small commitments you’ve made to go green throughout your supply chains.

Depending on your industry, that might mean switching to a more sustainable vendor, buying more product in bulk, ending a joint venture with a decidedly non-green company, or streamlining production processes for efficiency.

For UPS, it meant adding hydraulic hybrid trucks to its fleet and cutting fuel costs by over 45%.

These types of changes have both an immediate and long-term effect: on your bottom line, on your reputation, and on the planet.

Enhance your reputation with prospective clients

Going green will reduce your carbon footprint at home, but it will also have a positive impact on supply chains and partners in your local, national, and international markets.

Likely you do business with many different vendors from many different places. When you decide to go green, you become a leader for your clients, customers, and partners. As you reduce operational costs and boost profits, more and more people will look to you for insight on how and why to go green. You’ll naturally emerge as a thought leader in your field, which in turn will enhance your reputation with prospective and current clients.

In this way, going green is an incredibly effective business strategy. Doing so improves your reputation, positions you as a thought leader, fosters relationships with other successful business owners, and opens doors to opportunities you may not have known existed.

In other words, if you’re in business to boost profits, realize your goals, and make an impact, green is definitely your color.

Get access to financial opportunities

Imagine what you could do with an extra $1 million for your small business? Do you know exactly how you’d spend it? I bet you do.

While there’s no shortage of funding available, the competition is fierce, especially for diverse suppliers. Going green gives you another opportunity to bypass the competition and get the capital you need to grow your business, your way.

Beside IFC and Puma, there are countless corporations and venture capitalists looking to invest in small, diverse, green businesses. Some of these businesses are obviously green, such as Sungevity, an Oakland-based solar energy company that won $72.5 million in venture capital in 2014.

But you don’t have to be in a green business to win brownie points for going green. Just look at Impossible Foods. This food manufacturer based in Redwood City creates meat and cheese products out of plant-based materials. In 2014, their ingenuity and sustainable supply chains earned them $75 million in venture capital from Google and others.

Next Steps

Going green is not just something huge corporations do to save money or give themselves a PR boost. As sustainability becomes more and more the rule than the exception, savvy diverse suppliers are doing whatever they can to jump on the green bandwagon before their competition.

If you don’t have the resources to install LED lighting at your office, or work with more sustainable vendors, don’t worry – there are still small, easy, affordable ways to greenify your business and attract the attention of clients and investors.

Instead of…You can…

Instead of Installing LED lighting throughout your office, you can purchase individual LED bulbs for lamps.

Instead of purchasing a new heating/cooling system, you can turn on AC or heat only when absolutely necessary.

Instead of firing all your vendors and hiring new green vendors, you can replace your most expensive vendor with a money-saving green vendor

Small changes can have a huge impact on your bottom line and your carbon footprint. As you begin to make changes, follow organizations like Puma and IFC who are championing small diverse businesses that go green. When the time it right, you’ll be poised to make the connections and get the capital you need – and all for doing your part in saving the planet.

Want to learn more about securing venture capital from organizations like IFC and Puma? Read about their new program here: http://www.supplychaindigital.com/procurement/4270/Puma-and-IFC-reward-suppliers-in-emerging-markets-for-environmental-and-social-performance
 

References

  1. http://energywise.co/energy-efficiency-costs-less/
  2. http://www.pge.com/en/b2b/purchasing/supplychainresponsibility/gogreen/index.page
  3. http://www.pge.com/en/b2b/purchasing/supplychainresponsibility/gogreen/index.page
  4. http://www.inc.com/jeremy-quittner/venture-capital-flows-to-sustainability-companies-and-earth-day.html
  5. http://www.inc.com/jeremy-quittner/venture-capital-flows-to-sustainability-companies-and-earth-day.html