Embarking on sustainability initiatives is often seen as a worthy yet challenging process, particularly when it comes to financial budgeting. However, recognising the long-term benefits and potential for cost-saving that these activities offer, many businesses are actively seeking strategies to integrate sustainability into their financial plans. In this post we have explored a range of approaches that can serve as a financial blueprint for those looking to fully commit to sustainability efforts.
Finding the budget for sustainability activities can be challenging but is crucial for implementation. Here are some potential ways businesses have found the budget for sustainability programs:
- Budget reallocation
One option is to reallocate funds from other areas of the business to support sustainability initiatives. For example, a business may choose to divert resources from marketing or other areas to support sustainability initiatives that will benefit the company in the long run. You might have a consulting support budget across several areas which could be used collectively to bring in the help you need.
- Energy efficiency savings
Implementing energy efficiency measures can help reduce energy consumption and lower utility bills. These cost savings can then be reinvested in sustainability programs. This is often an easier and immediate way to reduce spending. Understanding your Carbon footprint and a robust carbon reduction plan (which is increasingly required for tenders and as evidence for customers’ Supply chain assessment anyway), is a great roadmap for these cost savings to be realised. SaveMoneyCutCarbon | Ever-Smarter Ways to Save the Planet has a number of business cases of money-saving ideas.
- Grants and subsidies
There may be government or private grants and subsidies available to support sustainability initiatives. Businesses can research and apply for these funding opportunities.
Some interesting grants are listed here Where to find green small business grants – Dolquine
- Green financing
Some financial institutions offer green financing options, such as low-interest loans or lines of credit, to support sustainability initiatives. Green loans for businesses – British Business Bank (british-business-bank.co.uk)
Partnering with suppliers, customers, or other businesses can help share the costs and resources associated with sustainability initiatives. For example, businesses may collaborate on waste reduction or energy efficiency projects that benefit both parties.
- Employee engagement
Engaging employees in sustainability initiatives can help drive behaviour change and promote sustainable practices throughout the organisation. This can help reduce costs associated with waste, energy consumption, and other areas, which can be reinvested in sustainability programs. We have seen many benefits from this. Several of our clients have been able to tap into the goodwill of their employees and find that discretionary time is volunteered to support sustainability programs. In the medium-term sustainability programs can yield savings on recruitment expenses. One of our clients saved 50% in a year on their recruitment bill, which for them was £125k because people weren’t leaving and were knocking on the door to work for them as they evidence their sustainability clearly!
- Crowdfunding and Social Financing
While traditional funding mechanisms are essential, crowdfunding platforms also offer a unique avenue for sustainability projects. Leveraging social media and outreach programs, businesses can connect with like-minded individuals and organisations willing to contribute financially to such causes. This approach not only secures funding but also creates a community of advocates for your sustainability efforts.
- Revenue Generated from Sustainable Practices
Sometimes, sustainability initiatives can become profit centres in their own right. For instance, waste materials from manufacturing processes can be sold or recycled, generating extra income. Additionally, products made from recycled materials may attract a premium price from eco-conscious consumers. Earnings from these avenues can be ploughed back into other sustainability projects.
The pathways to secure funding for sustainability programs are varied. Cost savings from one initiative can fuel investment in another, creating a virtuous cycle of sustainable practices and financial viability. As environmental and social governance criteria continue to weigh heavily in consumer choice and stakeholder expectations, there is an escalating urgency to fund sustainability and embed it in our business models.
If you need support with this – contact us at Sustainable X.