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GREEN BUSINESS

Why It Pays to Be Green

A new report suggests that sustainable business practices are not only good for the environment, but improve employee relations, as well.

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Going green is good for the environment, but how does it affect your business?
 
A new research report by the Society for Human Resource Management (SHRM) takes a deeper look at organizations that support sustainability programs, versus those that do not. Advancing Sustainability: HR's Role broached the sustainability subject from a unique perch. In the report, the researchers sought to measure how organizations with sustainability programs fare—not in terms of how effective they are at reducing their carbon footprint, but rather how effective they are at boosting company profits and improving employee relations. The results may surprise you.

According to the report, firms with sustainability programs reported the following results:

• Improved employee morale—55 percent
• More-efficient business processes—43 percent
• Stronger public image—43 percent
• Increased employee loyalty—38 percent

"Many benefits of sustainability initiatives are closely related to employees and how they do their jobs," Jennifer Schramm, manager of workplace trends and forecasting in SHRM's Research Department, said in a statement.

The study defined sustainability as the "commitment by organizations to balance financial performance with contributions to the quality of life of their employees, the society at large and environmentally sensitive initiatives."

Of the 728 companies that participated in the survey, 68 percent had a sustainability policy in line, while 28 percent were not engaged in any type of sustainable initiatives.

The top obstacles preventing organizations from implementing sustainable workplace or business practices were: 1) costs of launching, 2) difficulty measuring return on investment, 3) lack of support from organization's leaders, 4) costs of maintaining practices, and 5) lack of internal capacity or knowledge.

For many companies, questions about return on investment is a crucial part of allocating money towards sustainable practices, whether it's investing in more energy efficient light bulbs or shutting down remote offices to go virtual. Interestingly, among organizations calculating an ROI, 47 percent calculated a positive return on investment, and no organizations reported calculating a negative ROI, according to the report.

"Determining a return on investment (ROI) from these initiatives is not easy, but it is not impossible to achieve," the report's authors note.

Beyond ROI, the report focused on the human relations issues that surround how employees feel about their company, knowing that their companies are committed to sustainable practices. Interestingly, businesses with sustainable practices are often able to attract top-tier talent while keeping turnover rates low.

"Forty-nine percent of businesses engaging in sustainable workplace or business practices reported their involvement in sustainability was very important in creating a positive employer brand that attracts top talent," the report noted. "In addition, 40 percent reported the involvement in sustainability was very important in improving employee retention and 33 percent indicated the involvement in sustainability was very important in developing the organization's leaders."

Last updated: May 10, 2011




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