Greentech has not been an easy sell into the corporate world. Being green for the sake of being green is an uphill battle. The perception is that it takes a big upfront investment and a long ROI to garner the benefits of green technology. Until now, the return on investment from adopting green technologies wasn’t readily apparent. With the worldwide water crisis and the media focusing on climate change, that perception is beginning to change.
In the 2016 report published by MIT Sloan Management Review and BCG titled “Investing for a Sustainable Future” there are two points that really jumped out in this report. First, companies that have made a sustainability-related business model change are twice as likely to report profit from sustainability as those that haven’t. And second, an overwhelming three quarters of executives in investment firms agree that sustainability performance is materially important for investment decisions, citing revenue growth, operational efficiency, and risk reduction as the boons of solid sustainability management. Poor sustainability performance can be a deal breaker for investors.
Investors care about good sustainability performance for many reasons. Here are seven reasons found in this report on why you need a sustainability story now.
- Increased potential for long term value creation
- Potential for increased revenue performance
- Better operational efficiency
- Signals effective management
- Enhanced productivity, employee retention, and attraction
- Increased innovation potential
The report also recommends that companies need to develop and tell their sustainability value-creation story. That value stems from three interrelated components: a sustainability strategy, a clear business case, and business model changes that realize the benefits.
The two areas that Red Javelin has seen strong green stories is in the use of green technologies for better operational efficiency and compliance, Most recently, we have been working with water technologies. Historic severe drought conditions can now be found on four continents. In the Middle East, it has become a way of life. With escalating water prices, water saving technologies can significantly impact the bottom line.
Energy and water are intricately linked. Our water and energy systems are truly interdependent as producing energy uses water, and providing freshwater uses energy. Water is necessary for electricity generation, oil and gas production, and for renewables such as hydropower and concentrated solar power for geothermal energy. Energy is use for pumping water from aquifers, water treatment, heating and cooling, and water distribution.
As companies put sustainability strategies in place and look towards greening their supply chains, the business case will become clear.