Many businesses are switching to more sustainable business models due to pressure from the government or from consumers directly. But the reality is that converting to a more sustainable model can also be more profitable.

How is this the case? And what steps can you take to get there?

1. The Sustainability Equation

Choosing to adopt a more sustainable philosophy or more sustainable processes isn’t just about reducing waste or reducing the amount of energy you expend. There are dozens of variables you’ll need to consider when making decisions like these.

You’ll need to consider the costs of adopting new strategies, the immediate effects of those strategies, and how those strategies might pay off in the long term.

In this guide, we’ll attempt to cover as many of these variables as possible to illustrate how sustainable choices typically boost business profitability.

2. Energy Efficiency

For starters, we can think about energy efficiency. Sustainable practices usually involve keeping energy use to a minimum, choosing more energy-efficient appliances, and adopting energy-saving strategies. All of these strategies have the potential to increase your profitability by decreasing costs, without affecting your productivity.


For example:

  • Electric vehicles. According to Maxim Truck and Trailer, modern electric vehicles are capable of doing almost anything their gas-powered counterparts can do, at least up to a certain limit. EVs are powerful, relatively inexpensive, and can drive hundreds of miles on a single charge. If you’re willing to invest in electric vehicles by paying more for them upfront, they’ll typically pay for themselves in the long run.
  • Cleaner, more sustainable electricity production. Certain sources of energy production are not only cleaner but also less expensive than others. If you can install a solar panel array or windmills to power your business (assuming the conditions are right for these installations), you can save a lot of money.
  • Less energy use. Optimizing your business for sustainability also means reducing the total amount of energy consumed by your business. Assuming you’re able to achieve the same amount of productivity, this should be a total net positive.

3. Waste Reduction

Another element of sustainable business practice is reducing the amount of waste you generate. Again, it’s easy to see how this can lead to greater profitability. If you waste fewer materials, or if you make greater use of the materials in your business, you can either generate more revenue or reduce your expenses.

  • Efficient processes. Part of this equation means making your processes as efficient as possible, minimizing waste from the outset. If you can master this element of sustainability, you can purchase fewer raw materials and possibly increase production at the same time. This may require an initial investment, forcing you to purchase new technologies and spend time researching and developing new processes, but it can make you more money in the long term.
  • Material reuse. Do you have any leftover materials in your business? Is there a way that you can reuse them? Can you recycle them in-house for future runs of production, or can you sell them to an external partner who can use them for something else?
  • Selling and recycling. Recycling can be profitable as well – though “profitable” may not be the most accurate word in this context, since you’ll be selling materials you’ve already paid for at a loss. More accurately, you’ll be recapturing some of your previous losses. Even simple steps, like recycling/selling your old electronics rather than totally disposing of them, can make a difference in your business’s profitability.

4. Compliance


Already, governments all over the world are taking steps to incentivize or coerce business owners into operating more sustainably. In the near future, your business will likely be required to meet certain energy efficiency or sustainability standards.

Optimizing your business for sustainability now, proactively, gives you a foundation that makes compliance in the future much easier. Trying to future-proof your business and mastering the art of sustainability should help to reduce compliance costs significantly.

5. Public Image and Perceptions

Finally, we need to consider the benefits of adopting sustainability standards when it comes to our business reputation and public perceptions.

  • Brand and reputation. Increasingly, people care about the environment and sustainable causes. Almost universally, businesses adopting more sustainable practices is seen as a good thing. If you publish annual sustainability reports, and you make it clear through the actions that you care about protecting the environment, you’re going to develop a much better reputation for your brand. That can help you attract more funding, win more clients, persuade more customers, and even form new partnerships.
  • Competitive differentiation. Similarly, sustainability is a way to competitively differentiate your brand. If you can’t match your competitor’s rock-bottom prices, or if you don’t have the budget to compete with them directly in marketing or advertising, making your business more sustainable could give you an edge.
  • Talent acquisition. Most of the workforce (56%) won’t even consider a workplace that doesn’t align with their personal values. Today’s employees want to work exclusively for employers they can feel good about. And because most people care about sustainability, at least to some degree, operating your business in a sustainable way can help you with talent acquisition. People will be much more interested in working for your company if it’s a net positive for the rest of the world.
  • Long-term growth. Keep in mind that all of these benefits are going to increase with time. The need for environmental sustainability is only going to increase – and the general public’s passion for environmental causes is likely to only increase from here. On top of that, there’s going to be more top-down pressure to adapt your business for sustainability – so in a way, this is just a way of getting ahead of the curve.

Practicing sustainability reduces your expenses, increases your revenue, and makes your business look more favorable to most external parties. Though sustainability isn’t always cheap or straightforward, you should always take sustainable business practices seriously and do what you can to optimize for them.