Over the past several years, energy efficiency has become a rising topic in the business world. While being more mindful of energy usage has certain environmental benefits, companies are realizing it can come with fiscal benefits as well.
Of course, the focus on energy efficiency is driven by other factors at the same time. Pressure from varying sources like consumers, investors, regulatory agencies, and even talent pools are playing a role. Let’s take a closer look at why energy efficiency is such a hot topic, what benefits businesses stand to realize from it, and how you can help make your own company more energy efficient.
Improving Energy Efficiency Is a Smart Business Strategy
Put simply, energy efficiency refers to the practice of using less energy to accomplish the same tasks, thereby reducing waste and minimizing environmental impact. This practice capitalizes on technologies and strategies designed to optimize energy consumption across various sectors, including manufacturing, transportation, construction, and agriculture.
By prioritizing energy efficiency measures, companies can become more competitive and create long-term value. But while saving money on energy bills via efficient technologies and practices can benefit businesses of all sizes, there’s certainly more to the story.
Aligned with the direct financial impact of cutting down energy bills, tax benefits can be realized through energy efficiency initiatives. For example, businesses may capitalize on the energy-efficient commercial buildings tax deduction. Section 136 of the Internal Revenue Code (IRC) also provides a tax deduction for energy-efficient improvements in commercial buildings.
Shifting customer preferences is another important reason for adopting enhanced energy efficiency practices. According to a 2020 survey from McKinsey & Co., 75% of millennial respondents—and millennials have become a major market factor—consider sustainability when making purchases. And customers overall are aligning themselves more closely with brands that share their values and priorities. This reflects on a company’s reputation, which creates opportunities to enhance brand value.
If we think about those benefits as “carrots,” it’s important to also factor in “the stick”: regulations. While regulatory compliance for energy consumption from small businesses isn’t an official concern just yet, trends are certainly moving in that direction.
Energy Efficiency Matters for Brand Reputation and Talent Retention
The importance of how businesses use energy has grown considerably in recent years, driven in part by regulatory pressure and investor demand for sustainable investments. However, adopting best practices is about more than just meeting compliance requirements for businesses – it can ensure long-term viability and strengthen brand reputation.
Being mindful of energy efficiency comes with a host of other benefits too. Companies that prioritize these initiatives attract and retain top talent. Employees—particularly those who are highly skilled and/or educated—increasingly seek purpose-driven workplaces that align with their values, which often includes concern for the environment. Engaging in environmentally responsible behavior can boost team morale and employee satisfaction.
From a competitive standpoint, neglecting this consideration could be a mistake. Along with recruiting and retaining better talent, smart energy utilization fosters innovation, cuts costs, and differentiates a company within the marketplace.
This Isn’t Just for the Major Corporations!
Some people may think that responsible energy usage is something only large organizations have the resources and responsibility to address. After all, it’s one thing for a major corporation to respond to pressure from shareholders to do better, but what about the small and mid-sized businesses? Why should they care?
The same benefits that Amazon, Apple, or ExxonMobil reap from their efforts are available to the family-owned restaurant down the block or the startup machining shop looking to expand into new markets. These types of businesses can still realize the tax benefits, improved operational efficiency, and savings in energy spend that the major players enjoy.
Small business owners might feel as though they lack the resources to implement effective energy initiatives or that their company’s impact won’t matter. But the United States alone has more than 33 million small businesses. Combined, that’s a powerful force capable of making seismic waves in our nation, even if each business only has resources for minor improvements.
At the same time, resources may be more available than some think. For example, small and mid-sized business owners can explore equipment financing options when they want to upgrade to more energy-efficient equipment and fixtures.
Best Practices for Energy Efficiency in Small and Mid-sized Businesses
Small and mid-sized businesses have a significant opportunity to enhance their energy efficiency. Implementing best practices can reduce costs, improve brand reputation, and make a positive impact on the environment. Key strategies to accomplish this include:
- Setting measurable sustainability goals and tracking progress against those targets
- Conducting comprehensive energy audits to identify inefficiencies
- Promoting employee education and engagement on energy efforts
- Investing in energy-efficient technologies like lighting, equipment upgrades, etc.
Taking a proactive, multi-faceted approach helps small and mid-size companies realize the operational benefits of greater energy efficiency while elevating their sustainability credentials with both customers and regulatory agencies.
Consistent progress monitoring, process improvements, employee involvement, and transparent communication facilitate smooth and ongoing advancements. With determination and the right strategies, businesses of any size can make meaningful strides in reducing their environmental footprint and optimizing their energy usage.
Financing Solutions for Your Energy Efficiency Needs
If you want to save money while saving energy, we’re here to help. Team Financial Group has worked with a wide range of businesses to finance green projects and create a net positive cash flow.
We can help you obtain energy-efficient solutions like:
- Solar power
- HVAC
- LED lighting updates
- Boilers
- Electric vehicle charging stations
- Air compressors
- Building envelopes
- Insulation
To learn more or get started today, simply give us a call at 616-735-2393 or fill out our online contact form.