Building a Business Case for Environmental Improvements

Introduction

You want to implement a project to help improve the environmental performance of your organisation. Unfortunately, you need to persuade your director to loosen up the purse strings and provide other resources such as money and staff time to assist. How do you go about making a business case for the project? Stay tuned and you will find out!

Overview

There are basically two elements to building a business case in this scenario:

Hard benefits + soft benefits = effective business case

Let’s take a look at each of the two elements of the formula.

Hard benefits

There are many monetary reasons as to why organisations should implement environmental improvements, in most cases these are fairly easy to work out. They are often direct financial costs to an organisation. These include:

• Resources and waste – significant savings can be made by reducing resource use such as energy, water and raw materials. Resource efficiency is a process that can be adopted to reduce such costs.

• Reputation – if the improvement is marketed properly it can add to the reputational value of the business leading to improved corporate image and hopefully sales.

• Legal compliance – if the improvement helps increase legal compliance then this may reduce the risk of fines and associated legal fees. It will also reduce the cost of managing compliance. 

• Improving health and safety – less waste and fewer raw materials and hazardous substances will be of benefit not just to environmental management but also occupational health and safety.

• Competitive advantage – should an organisation improve its environmental performance it will give them an advantage over those that don’t, particularly noticeable when tendering for contracts.

These are just a few examples, there are many others but it is clear to see that there is a significant financial benefit from environmental improvements. 

Soft benefits

There are many benefits that occur from implementing that are more difficult to directly cost. In most cases these far outweigh the hard benefits. These include:

• Moral – improving the environmental performance of a business is an example of ‘doing the right thing’. It is the correct thing to do for present and future generations.

• Customers – are more aware of environmental issues than ever before and are more likely to purchase goods and services from an organisation that has a high level of environmental performance. 

• Local communities – they are no longer willing to suffer from pollution from nearby businesses and can stop planning permission if an organisation wants to change its site.

• Employees – many employees will enjoy working for an organisation that has a strong environmental record. This may be used as a factor in aiding staff recruitment and retention.

• Opportunities for innovation – by improving the environmental performance of the company this will mean that it presents an opportunity to improve a product or service delivery. Links very closely to the competitive edge above. 

Final Note

It is clear to see that an effective business case for environmental improvements can be made by considering both the hard and soft benefits. If these are effectively communicated and changed to suit different audiences, it is clear that an effective business case can be made. 

John Binns BSc (Hons), MSc, MIEMA

John Binns BSc (Hons) MSc MIEMA is an experienced  environmental tutor and consultant.