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Why Going Green Can (Still!) Be Good for Your Small Business

Last updated 03/21/2024 by

Audrey Henderson
As a small business owner, you understandably keep a close eye on the bottom line. But like many individuals, you may also have concerns about the environmental impact of your company’s operations. The good news is that going green is not only good for the planet, but it may also very well enhance your business through increased goodwill among your customers, employees and the general public – and maybe even put more money in the till.

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Generating Cred with the Lifestyles of Health and Sustainability (LOHAS) Crowd

LOHAS is an acronym that stands for Lifestyles of Health and Sustainability. This generally affluent market segment focuses much of its purchasing power on health, wellness and sustainability. This consumer bloc represents approximately 13 to 19 percent of adults in the United States, according to the LOHAS website. That’s approximately 41 million people who are willing to pay a premium for what they want, and what they want often coincides with going green.
Pushing higher prices in a non-luxury market may seem counterintuitive, especially during financial hard times. After all, pitching “Always Low Prices” represents one of the main reasons that Wal-Mart leapfrogged over Sears, Roebuck and Company to become the largest retailer on the planet. But Wal-Mart experienced a dip in sales during the 2013 holiday season, due (ironically) in part to a reduction in food stamp allocations that left its core market of low-income shoppers less able to afford its low prices.
Plain and simple – there is only so much price-cutting a business establishment can do.
On the other hand, a 2007 report published in Environmental Leader stated that a whopping 72 percent of car rental customers wanted to have hybrid vehicles included among their rental options. The same report cited that half of mobile phone customers considered the green credentials of potential carriers. A 2008 account published in Green SmartMarket Report stated that 70 percent of home buyers were more influenced to make an offer on homes that included green features.

Enhanced Worker Productivity

If slumping hunched over a desk wedged in the middle of a stuffy, overheated windowless cubicle farm, staring at a computer screen all day with only the glare of fluorescent lights for illumination sounds like a prescription for malaise, that’s because it is. So-called “sick building syndrome,” a malady marked by headaches, fatigue and dizziness, is linked to airborne contaminants suspended in stale, poorly-circulated air. Poor temperature control is also linked to slowed reaction times among workers.
By contrast, replacing artificial indoor lighting with natural daylight can boost worker productivity. Proper fresh air exchange systems significantly reduce symptoms associated with sick building syndrome – resulting in fewer sick days. Allowing workers fresh air breaks during the workday reduces the risk of the post-lunchtime slump that often has workers fighting to keep their eyes open, minimizing the risk of fatigue-driven errors.

Saving the Truffula Trees

In the classic Dr. Seuss story The Lorax, the greedy Once-ler decimated every single Truffula tree in the relentless pursuit of raw materials to produce Thneeds, which “everyone needs.” As a small business owner, your company is unlikely to inflict nearly the scope of environmental damage as the Once-ler factories.
Nonetheless, taking measures to reduce the size of your company’s carbon footprint is both the right thing to do, but can also translate into money in your pocket. Using spoiled copies for scrap paper shrinks your company’s expenditures for paper and reduces deforestation. Holding virtual meetings via Skype and video conferencing is much less expensive than driving across town or flying across the country – never mind the cost of hotel rooms. Plus you’re contributing that much less in carbon emissions from car or airplane exhaust.

Federal and State Tax Benefits

If you must drive for business-related purposes, perhaps your next vehicle should be a plug-in electric model. While the so-called “Cash for Clunkers” initiative and tax credits for hybrid vehicles have expired, the Internal Revenue Service still provides tax incentives for several all-electric vehicles through the Emergency Economic Stabilization Act of 2008 (EESA) and the American Recovery and Reinvestment Act of 2009 (ARRA). The ARRA, which applies primarily to two-wheeled and three-wheeled vehicles, is likely less practical than EESA, which provides credits for four-wheeled passenger vehicles. EESA credits range from a minimum of $2,500 to a maximum of $15,000, depending on vehicle weight and battery capacity. You will not only save money on gas, but you’ll recover a good chunk of the money you spent upfront to purchase the vehicle.
If you own or lease a commercial building and install energy-efficient lighting, heating, cooling, ventilation, hot water system or building envelope materials, you may be entitled to a tax deduction under the Energy Policy Act of 2005. The allowable deduction is as much as $1.80 per square foot for buildings that achieve at least 50 percent reduction in power and energy cots. Deductions are limited to 60 cents per square foot for buildings that achieve energy and power savings between 16 ½ percent and 50 percent. The savings must be certified by software and measurement equipment recognized by the Department of Energy before the IRS will allow the tax deduction.
Your business may also be eligible for state tax credits and other local incentives for going green. Check out the Database of State Incentives for Renewals and Efficiency (DSIRE) website for programs and resources available in your location. It’s worth your while to bookmark the site, as programs change fairly regularly

But Beware of Greenwashing

It is totally OK to promote and document any genuine green strategies that you pursue your business on your company website and on social media. That’s one way of informing customers and the general public that you take sustainability seriously. Demonstrating transparency concerning your business also generates an enhanced level of trust between your company and the public.
But don’t cut corners with “greenwashing.” Putting on a green front, or marketing green initiatives that don’t actually aid in efforts toward environmental consciousness, is a quick way to get shunned. And there are many organizations out to expose any and all businesses that use greenwashing tactics to lure consumers. If that happens, the credibility of your business will be diminished, if not destroyed, perhaps forever.
Going green is daunting, especially now that years of initiatives and incentives have passed. But you can make small moves, green moves, to help the environment thrive and your small business grow.

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Audrey Henderson

Audrey Henderson is a Chicagoland-based writer and researcher. She holds advanced degrees in sociology and law from Northwestern University. Her writing specialties are sustainable development in the built environment, policy related to arts and popular culture, socially and ecologically responsible travel, civic tech and personal finance.

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