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The "Small Business Guide to Increasing Profit by Putting People and Environment First" was developed by the Network for Business Sustainability and Funded by the TD Bank.
This practical guide on how to make money by becoming more sustainable provides an overview of how to cut costs, motivate employees, enhance reputation and increase sales – while helping the environment, employees, and the community.
The guide is broken down into two section, retail service and manufacturing and addresses with the following four areas:
- Environmental actions that cut costs
- Workplace changes that keep and motivate employees
- Community involvement that enhances reputation
- Product changes that increase sales
Plant equipment Maintain equipmentReduce plant energy use by up to 20%.
Example: Boiler maintenance reduces boiler energy use by 10% on average. Fixing leaks in compressed air systems reduces compressed air energy use by 20% on average.
The majority of plant fuel and energy use comes from equipment and processes.
See
information (Bloom Centre and Marbek Consultants).
How much will it cost? Costs are generally low, but time is required. Incentives and rebates may be available through your energy supplier or the
energy funding database (Natural Resources Canada). Payback (without incentives) is 4-10 months.
How do I do it? Maintain boilers and compressed air systems. Monitor and track energy use. Insulate equipment and pipes.
A comprehensive
list of options (Bloom Centre and Marbek Consultants).
More details on
options (US government).
How other companies saved: A chemical company reduced energy use per pound of product by 8% (p. 40). The company reduced steam pressure without affecting plant performance and without any capital investment.
Maintain vehicles Increase fuel efficiency by up to 5%, saving up to 20 cents a gallon (4 cents per litre).
How much will it cost? Costs vary, depending on the age of the car and whether it has been continuously maintained. Some time and expertise are needed.
How do I do it? Schedule regular tune-ups. Ensure tires are properly inflated. Use the recommended motor oil.
Guidance (US government)
Consolidate delivery routes Reduce gas costs
labour time
wear and tear on vehicles
How much will it cost? Costs are low. Some time is needed to plot a more efficient route. Route optimization software is available, some for free.
How do I do it? Consider an online route-scheduling program. Sample programs (not vouched for by this resource):
A program designed for small businesses, with a
free trial (Onterra Systems).
Free options include
gebweb and
Driving Route Planner.
How other companies saved: A packaging supplier reduced miles traveled per customer visit by 6% over two years by improving journey planning.
Buy fuel-efficient vehiclesWithin the same vehicle class (e.g. mid-size cars), the most efficient vehicle’s annual fuel costs are roughly $1,000 lower than the average vehicle.
How much will it cost? Costs vary depending on the model chosen. Vehicles that use non-gasoline fuel (e.g., hybrid and electric cars) are the priciest choices.
How do I do it? Review your options. New fuel-efficient vehicles are constantly being developed.
Guidance on
buying a fuel-efficient car (Ecodriver)
Specific vehicles'
fuel efficiency and cost (US government)
Upgrade equipment Save 15-25% of equipment energy use through upgrades. These actions also reduce material and water use, equipment wear-and-tear, and labour costs.
Improve employee wellbeing: You’ll have less dust and noise and higher morale.
How much will it cost? Costs vary by action (details.) Actions take time and expertise. Incentives and rebates may be available;
See the
energy funding database (Natural Resources Canada).
Consider working with an
energy services company (ESCO). (The ESCO will make changes for free, to be paid for from your future energy savings).
Payback is 6 months – 4 years, depending on the actions taken (details). Energy-efficiency projects have a payback of 1.9 years on average when all cost savings are considered.
How do I do it? Install exhaust gas heat recovery systems, smart controls on chillers and compressors, and energy-saving motors and pumps.
Review a comprehensive
list of options (Bloom Centre and Marbek Consultants).
See more
details on options (US government).
How other companies saved: A 200-person food-processing company saved $22,400 a year in energy costs after installing a $20,000 boiler economizer; payback is less than 1 year.
Heating and cooling (HVAC) Adjust building temperature Save money: For each degree adjustment, save about 5.4% on your heating, ventilation, and air conditioning (HVAC) energy bill. Calculate the exact savings with the small business energy calculator (IESO).
How much will it cost? Cost is minimal. Programmable thermostats begin at $30.
How do I do it? Use a programmable thermostat: Heat to a maximum of 21°C in winter when occupied, 16°C when unoccupied. During summer, cool building to no lower than 24°C.
A comprehensive guide to
reducing heating and cooling (BC Hydro).
How other companies saved: A 100-person office cut its electric bill in half, saving $23,000 per year (p. 27). Savings were gained through programmable thermostats, energy-efficient lighting, and window improvements. Payback was 18 months.
Maintain heating, ventilation, and air conditioning (HVAC) systems Reduce total energy use by 15-20% through simple maintenance (p. 20). Fixing duct leaks alone can reduce HVAC energy use by up to 30%. (HVAC is the largest energy user in commercial buildings.)
How much will it cost? Costs are low, but some time and expertise are required.
How do I do it? Identify and block duct leaks. Check airflow. Clean coils. Change filters.
Review the
checklist for simple maintenance (US government)
Seal windows and doors Save moneySave 5% of HVAC energy by sealing air leaks.
How much will it cost? Costs are low, but some time and expertise are required. Payback is 1-3 years.
How do I do it? Fill gaps around doors and window frames with caulk, spray foam, and insulation. Replace cracked window and door weatherstripping. Install door sweeps at gaps.
Tips on air sealing (BC Hydro)
Upgrade heating, ventilation, and air conditioning (HVAC) systemsReduce HVAC energy bills by 10-40% depending on the upgrade (details).
How much will it cost? Costs vary. Time and expertise are required. Incentives and rebates are available.
Check with your energy supplier and see the
energy funding database (Natural Resources Canada).
Consider working with an
energy services company (ESCO). (The ESCO will make changes for free, to be paid for from your future energy savings).
Payback without incentives is 1-6 years, depending on the action (details).
How do I do it? Involve a contractor; your energy supplier can make recommendations.
How other companies saved: A bed and breakfast saved $10,000 annually through energy efficiency actions, including installing state-of-the-art HVAC systems. Payback was 6 years.
LightingInstall more efficient lighting Save money: Save up to 75% by installing more efficient lighting. Calculate the exact savings with the
small business energy calculator (IESO). (Lighting is typically the second largest energy user in commercial buildings.) More efficient light also reduces cooling costs by up to 20%.
Increase employee productivity: Efficient lights improve employee productivity by providing better quality light.
How much will it cost? Costs are low. For example, compact fluorescent lights (CFLs) cost more initially than incandescent bulbs, but last 4-10 times longer and require less maintenance. Incentives and rebates are frequently available.
Check with your energy supplier and see the
energy funding database (Natural Resources Canada).
Without incentives, payback from replacing incandescent lamps with CFLs is 6-12 months. Payback from replacing T12 with T8 lamps is 2-5 years.
How do I do it? Replace incandescent bulbs with CFLs and LEDs. Replace T12 lamps with T8s.
Detailed info on CFLs and LEDs (BC Hydro).
Ways to save money through lighting (BC Hydro).
Savings, cost, and payback for
commercial and
industrial buildings (Bloom Centre and Marbek Resource Consultants).
Light quality of different CFLs (Popular Mechanics).
How other companies saved: A 125-person printing facility saved more than $21,000 a year by upgrading to energy-efficient lighting. A small grocer saved nearly $3,500 and improved product displays. It replaced T12 lamps and incandescent bulbs with T8 lamps, CFLs, and LEDs.
Lighting, maintenance, and cooling costs fell after lighting retrofits at an office products supplier and a law firm.
Install more efficient lightingSave money: Save up to 75% of lighting energy use by installing more efficient lamps. For example: T5 lamps use 20% less energy than high-intensity discharge (HID) lamps. T8s use 35% less energy than T12s. In addition, more efficient lighting produces less heat, reducing cooling costs by up to 20%. (On average, lighting accounts for 6% of plant electricity use (p. 4).) Increase employee productivity: More efficient lighting can deliver better quality light.
How much will it cost? Costs are low for compact fluorescent lights (CFLs), higher for the other types of lighting. Incentives and rebates are available. Contact your energy supplier and see the
energy funding database (Natural Resources Canada). Payback without incentives is 1-4 years.
How do I do it? Replace HIDs with T5s, T12s with T8s, and incandescent bulbs with CFLs and light-emitting diode (LED) lights.
Energy saving opportunities, including HID lighting (Bloom Centre)
Ways to save money through lighting (BC Hydro).
Detailed info on CFLs and LEDs (BC Hydro).
Light quality of different CFLs (Popular Mechanics).
How other companies saved: A commercial print facility saved more than $21,000 per year after an upgrade to energy-efficient lighting.
Equipment Activate computer energy saver settings. Save about $50 per computer annually by activating energy saver settings. Energy saver settings cut computer power consumption in half.
How much will it cost? No cost.
How do I do it? Learn how to
activate computer energy saver settings (US government)
How other companies saved: An electronic parts distributor saved $70 per computer per year by activating sleep settings on PCs. With 40 computers, the company saves about $2,800 annually.
Maintain vehicles Save money
Increase fuel efficiency by up to 5%, saving up to 20 cents a gallon (4 cents per litre).
How much will it cost? Costs vary, depending on the age of the car and whether it has been continuously maintained. Some time and expertise are needed.
How do I do it? Schedule regular tune-ups. Ensure tires are properly inflated. Use the recommended motor oil.
Guidance (US government)
Buy Energy Star (energy efficient) equipmentSavings vary by product. For example, Energy Star refrigerators and freezers can save over 45% of the energy used by conventional models. Annual savings are $140 for refrigerators and $100 for freezers.
How much will it cost? Some products may have a slightly higher purchase price, but will cost less to run. Incentives and rebates are available
See
Natural Resources Canada.
How do I do it? Choose Energy Star options when buying computers, commercial appliances, food service equipment, building products, electronics, and lighting. Products are listed online.
Energy Star advice for small businesses (US government)
Energy Star FAQs (Natural Resources Canada)
How other companies saved: A grocer saved $1,600 in electricity costs after replacing open multideck freezers with an 80-foot (24-metre) row of enclosed freezers. The new freezers also improved the customer experience. “People complained that it was too cold in the freezer aisle before, so with the new equipment they shop longer,” explained the owner.
Waste Reduce and reuse materialsReduce water use and save $80 per 1,000 gallons ($21 per 1,000 litres). This saving represents the costs of buying, treating, and discharging or disposing of water.
Reduce paper use to save the costs of printing, copying, mailing, and storing paper. These costs are more than 30 times the purchase cost of paper.
How much will it cost? Costs will vary depending on the type of material reduced and reused.
How do I do it? Set priorities based on the waste produced. Discuss reducing and reusing with your employees. Ask what others have done to reduce and reuse materials. Evaluate the plan after a few months, and make changes.
Suggestions for
reducing and
reusing materials (BC Hydro).
Guides to waste reduction for small businesses from
Industry Canada and the
US government.
Tips for paper reduction (BC Hydro)
A dry cleaner pays customers to return hangers. Reusing hangers saves an estimated $18,000 per year. A 30-person property management company saved $10,000 in 6 months by switching to double-sided printing and electronic communication (p. 12). A water treatment company saved $320 and decreased paper waste by 500 pounds (225 kilograms) by using e-mail and double-sided copies.
Reduce and reuse materials
Comprehensive pollution prevention initiatives save $80,000 per year on average from increased efficiencies, reduced risk, and reduced costs. For example, reducing water use saves $80 per 1,000 gallons ($21 per 1,000 litres): the cost of purchasing, treating, and disposing of the water.
Increase profitability and sales: Reducing wastewater, air pollution and toxics improves image and leads to preferred supplier status.
Innovate: Waste reduction leads to innovation.
Shorten permitting time by complying with regulations.
How much will it cost? Cost is $70,000 on average for a comprehensive pollution prevention initiative, but smaller actions can be much less. Actions require expertise and time. Payback is 10 months on average for a comprehensive project.
How do I do it? Determine the source of waste, identify alternative solutions, and take action.
Guides to waste reduction for small businesses from
Industry Canada and the
US government.
Examples of different solutions (Environment Canada).
How companies in different sectors have reduced their waste (Bloom Centre)
How other companies saved: A medium-sized printing company saved almost $150,000 annually through waste reduction, with a payback of 4 months. The company reduced volatile organic compounds (VOCs), process wastes, and water and energy use. A construction equipment company saved $32,000 per year in waste disposal costs by modifying its paint-stripping process. Employees benefit from a safer and healthier work environment.
Recycle Save money: Recycling costs less than $5 a cubic metre. Disposing of the same amount of waste costs $6-$15.
How much will it cost? Costs vary. Recycling large amounts of waste may require the following: employee time, a storage area, and new equipment for sorting waste.
How do I do it? Check with local recycling councils for recycling facilities in your area. Ask whether other companies can use the waste you generate.
Guide to recycling (BC Hydro).
How other companies saved. A brewery with 85 staff reduced its waste by 50%. It saved more than $25,000 per year in hauling costs. A small brick manufacturer reduced landfill waste by 66% over 2 years. Most waste (paper, cardboard, and plastics) was recycled for free (Case Study 2).
Environmental Management Systems Two-thirds of businesses reported or anticipated increased sales after adopting an environmental management system (EMS). Major customers (e.g., Walmart) increasingly require suppliers to have an EMS.
Formal EMSs saved $4,518 annually per $ million turnover in the first two years.
How much will it cost? Cost of formal certification is $5,000-$60,000 for ISO 14001. Costs have also been calculated at $1,362 per $m turnover. Payback was 1-3 months: faster for medium-sized companies than for small companies.
How do I do it? Decide whether EMS is needed. Do your suppliers demand EMS? Do your operations pose environmental risks? A formal EMS makes financial sense for larger companies. Smaller companies can benefit by working through EMS elements: set goals, develop a plan, track environmental performance, and evaluate results.
Brief overview of EMS (Pollution Prevention Resource Exchange).
How other companies saved: A 66-person brick manufacturer saved $40,000 annually after implementing an EMS. It also improved compliance and relationships with neighbours. A 24-person nursery had new business sales valued at $91,000 per year after EMS certification. The EMS also saved energy and waste.
Motivate Employees Involve employees Increase productivity Productivity increases by 6-7% when employees participate in changes (p. 9).
Increase employee commitment and motivation: Employee involvement increases commitment and reduces turnover. Job satisfaction increases by almost 15%.
How much will it cost? Costs are low. Listening to employees’ concerns takes some time.
How do I do it? Update employees periodically on the company’s progress and direction. Listen to employee feedback on relevant issues. Respond to employee suggestions.
Brief overview of employee involvement (Industry Canada).
Tips for employee involvement (New Brunswick HR Portal).
A small software company doubled its annual revenue and was recognized as one of Canada’s Top 100 Employers. Previously, it had a 40% staff turnover. The difference? An employee engagement plan that focuses on communication: e.g. all employees share success stories in a daily 9-minute meeting.
A health systems company reduced turnover by 30% and increased patient satisfaction by 33%. Employees identified workplace improvements, and the company acted on their suggestions.
Recruit and retain diverse employeesIncrease sales, profits, and market share: Employee diversity accounts for roughly 16.5% of the difference between companies’ sales revenue, and 7% of the difference in profitability and market share.
Increase innovation: Diversity leads to creativity, new ideas and better solutions, especially over time.
Improve operational results: Companies with the highest percentages of women leaders had 56% higher operating results than those with no women in leadership roles (p. 7).
How much will it cost? Costs are low, and may include wider advertising of jobs and diversity training for employees.
How do I do it? Respect different views and traditions. Make sure to include everyone: e.g. around the holidays. You’ll reduce any conflict.
Summary of diversity practices for SMEs (Industry Canada).
Detailed diversity practices for SMEs (European Union).
An Ontario small business grew its business worldwide because its 30 internationally-educated employees spoke 25 languages.
Promote health and safety Reduce injury and illness costs by 20-40%. And save the indirect costs of accidents — delays, replacement training, morale issues. Indirect costs can be up to 10 times the direct costs.
How much will it cost? Small and medium-sized enterprises in service and manufacturing industries spend £4,000 or $6,200 per year on average on health and safety (p. 16). Training is the main expense. Payback is less than 3 months to 2 years for health and safety improvements in work settings.
How do I do it? Implement the key elements of health and safety: a formal policy, training, hazard control, and employee involvement.
Provinces have health and safety resources for small business: e.g.
Ontario’s resource.
Quick overview of employer health and safety responsibilities (Labour Canada).
Health and safety posters (Canadian Centre for Occupational Health and Safety).
How other companies saved:
A 41-person control system provider saw absenteeism fall by more than half over three years (p. 18). Costs of health and safety actions: certification ($2,350), minor work station improvements ($780), and employee training ($230, one week per year). A 40-person mining company increased productive time by 5% and lowered liability insurance premiums by 15% (p. 37). Costs of health and safety actions: Audits and training by external consultants (£4,000 or $6,200/year) and lower production during training.
Help employees choose healthy behaviours related to food, smoking, and exercise Reduce absenteeism: Absenteeism costs fall by $2.73 for every dollar spent on wellness.
Increase productivity: The healthiest 25% of the workforce is 18% more productive at work than the least healthy 25%.
Retain employees: Turnover was 32% lower for employees in a fitness program (compared with average rates over 7 years).
How much will it cost? Employee wellness programs cost $132 per employee per year on average (p. 5). The return on investment from a comprehensive program is 6:1 (p. 2).
How do I do it? Make healthy choices easy: Educate employees, provide healthy alternatives, and host group activities.
Helpful suggestions (Public Health Agency of Canada).
Examples of small business wellness programs (Globe and Mail).
How other companies saved: A medium-sized office supplies distributor eliminated doughnuts from company meetings and increased prices on high-fat vending machine items. Its wellness program expanded with health screenings and free courses. In 6 years, the company’s turnover rate fell by half and its workers’ compensation premium payment fell by 25%.
Enhance Reputation Donate to the communityIncrease sales and customer satisfaction: Sales increase by $6 on average for each dollar donated. Customer satisfaction also increases. Like advertising, corporate donations increase name and brand recognition.
Donations are particularly valuable for companies that work with individual consumers.
Recruit employees: Nearly 3 out of 4 potential employees prefer to work at a company that supports community causes, when positions are similar.
How much will it cost? Costs include money and staff time. Staff time can account for 5-22% of the budget for community involvement activities. A tax credit of up to 29% is available. Payback can take years because people learn about a company’s actions slowly. Ultimately, return on investment is 5:1.
How do I do it? Donate strategically, to causes relevant to your business. What issues do your customers and employees care about? Donate slightly more than what’s expected, to differentiate yourself.
Guide to community giving for SMEs (Industry Canada).
Communicate environmental and social actions to customers and employeesIncrease profit: Firms that tell their employees about their environmental actions are 2 to 3 times more likely to see an increase in profit from the previous year, compared with firms who do not communicate.
Increase employee commitment: Employees who see their employer acting as good citizens are almost 40% more engaged. They are also more creative and connected at work.
Improve image: Of those who read about a company’s social and environmental actions, 77% see the company more positively (p.2).
How much will it cost? Cost is low. Some staff time is required. Payback varies.
How do I do it? Reach customers through your website and social media, product labelling, and conversations. Reach employees through staff meetings, training, and signage.
Advice on marketing green actions (Industry Canada).
How other companies saved: A construction company uses its annual reports to showcase its environmental actions to customers.
Talk to neighbours about actions that affect them Improve decisions and increase innovation: Community members can provide useful information and resources. Communication with people outside your business (“stakeholders”) explains 34% of the difference in innovation between firms.
Reduce risk: Community members and regulators are more cooperative when consulted early. Similarly, be open if a crisis occurs (e.g., an emissions release).
How much will it cost? Costs of communication are low. Some time is required. Responding to community suggestions can have costs.
How do I do it? Keep open lines of communication with neighbours and community members. Take advantage of opportunities to connect. Be proactive about common areas of concern: for example, hiring practices, pollution, traffic problems and noise, and major changes (e.g. a new building). Post information, go door-to-door, or hold a meeting.
A step-by-step guide to engaging community members (Network for Business Sustainability).
Tips on community relations (Industry Canada).
How other companies saved: When planning stadium renovations, the Montreal Alouettes reduced community complaints by sharing their construction plans and responding to neighbours’ concerns. They reduced noise and light pollution, decreased traffic, and added more trees and landscaping.
Increase Sales Sell products and services that are socially and/or environmentally responsibleSee a return on investment (ROI) of up to 58:1 (p. 4). Returns come from product innovation, price premiums, and recycling revenue. ROI from reducing risk (e.g., of regulatory violations) is up to 85:1 (p. 4).
Charge premium prices: Consumers will pay 10% more (pp. 5-6) on average for these products and services.
Expand market share: Consumers prefer green products and services when the alternative is of equal quality and price (p. 6).
Keep customers: Even during recession, 68% of consumers say they will remain loyal to a company that is socially and environmentally responsible.
How much will it cost? Cost varies depending on the actions taken.
How do I do it? Adopt other actions in this resource to make a product or service that’s environmentally and socially responsible. Explore fair trade products, products with high rankings on GoodGuide, and products made in Canada. Increase impact by telling customers about the difference your product or service makes.
Tips for
service providers on
improving social and environmental impacts (Industry Canada).=
Online networks with resources:
2 degrees and LinkedIn’s
CSR for SMEs.
A review of what consumers want (Network for Business Sustainability).
A “green” web hosting company drew environmentally-minded clients — and saved money — through its energy efficiency actions..
Manufacture products that are socially and/ or environmentally responsible See a return on investment (ROI) of up to 58:1. Returns come from product innovation, price premiums, and recycling revenue. ROI from reducing risk (e.g., of regulatory violations) is up to 85:1.
Maintain and expand market: Large customers (e.g., Walmart) increasingly demand that suppliers follow specific standards.
Charge premium prices: Consumers will pay 10% more (pp. 5-6) on average for these products.
How much will it cost? Cost varies depending on the actions taken. Using sustainable materials may cost more or may require process modifications.
How do I do it? Adopt other actions in this resource to make a product or service that’s environmentally and socially responsible. Identify the standards required by large customers (e.g., Walmart). The environment is usually their top concern, so prioritize energy efficiency and waste reduction.
Guide to developing socially and environmentally responsible products (Industry Canada).
Online networks with resources:
2 degrees and LinkedIn’s
CSR for SMEs.
How other companies saved: A cleaning equipment company increased sales almost 500% in 2 years, by designing floor scrubbers that use fewer chemicals. The product drove new technologies throughout the industry. Developed by Network for Business Sustainability | Funded by TD Bank Group
Source:
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