Making the proper investments and prudent financial management are two major keys to successful business strategies. Whether your company is investing in internal projects, like employee training or product research, corporate investing, or investing in external projects that will ultimately benefit the company, intelligent investing enables your company to increase profits in the long term.
There’s one type of investing that’s not only becoming more popular, but it may also be imperative to the success of your company as well as the health of the planet to invest in: sustainable investing. Aligning with the idea of a sustainable business strategy, sustainable investing seeks to support projects and businesses that are working to preserve resources and save the planet while still enjoying a profit.
At first, it may seem as though sustainable investing isn’t an investment at all. How can investing in environmental projects ultimately yield a return? However, studies show that businesses that are making sustainable investments are seeing significant returns. Here’s a quick guide to sustainable investing, the types of returns you can expect from these types of investments, and how reusable bags can be included in your sustainable investing strategy.
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What is sustainable investing?
Sustainable investing, otherwise known as socially responsible investing, impact investing, or ESG investing, is when one invests in sustainable companies, invests in projects or bonds that support the environment, or when a company sets aside a certain budget for sustainability projects and strategies within the company.
Sustainable investing falls under the umbrella of the sustainable business model. This type of business model seeks to find what is called the triple bottom line, or the 3Ps: people, profit, planet. What this means is that a sustainable business model must benefit more than just the shareholders and should also seek to profit employees, civil society, and the environment alongside shareholders.
It’s only going to become more and more important for your company to make sustainable investments and business strategies. Certain trends suggest that more regulations will be placed upon companies in order to pressure producers and manufacturers to make more sustainable choices. It would be wise for your company to predict future adaptations that you can begin to implement now rather than scrambling to adjust when the inevitable regulations arrive.
Beyond this, sustainable investing will also help to protect essential resources that your company needs to operate. Many resources are finite, and if companies don’t start investing in projects and plans to preserve those resources, they will decimate the very materials that their company needs to survive.
It’s also important to keep these types of investments and investors in mind as you make choices for your company’s daily operation. Sustainability is one of the biggest considerations consumers make when deciding which businesses to support, and many consumers, especially those in the millennial and generation z age group, have stated that they will not support companies who are practicing unsustainable business methods. If you want to encourage people to invest in your company, you will need to make sure that you’re operating in a sustainable way and that you can prove it.
How can investing in sustainable projects increase profit margins?
Now we’ve established what sustainable investing is and why it’s important, but can it actually improve profit margins in a real way? Evidence says yes, and there are a few ways that your money will make it back to you, and then some.
The first way is through encouraging more investors, especially those who are looking to invest in sustainable businesses. When you begin funding sustainability projects and make positive, sustainable choices within your company, you can market your company to potential investors as a sustainable investment. Encourage people to invest in your business by showing them that their money will go toward a company that cares about the planet.
Secondly, setting aside a budget for sustainable practices and goals within your company can yield a return through savings. Studies show that companies that have invested in more sustainable choices in terms of daily operation saw reduced operating costs. For example, companies who have switched to more energy-efficient LED bulbs saw a bigger initial investment, since LED bulbs are more expensive than standard bulbs, but because they last longer, they can also cut bulb costs up to 75% over a 25-year period.
Finally, companies see savings through conservation of resources. As the world’s resources are depleted and abused, the price of resources will go up. By investing in projects to preserve and protect resources, you’ll be ensuring that the price of the resources does not go up and that humankind can continue to enjoy these resources for years to come.
The important thing to remember when making sustainable investments is that they’re almost always long term. You’ll need to put up quite a bit upfront, and you may not see a return for years. However, when you do, the return can be significant, and it could result in the preservation of precious resources and the life of our planet.
Reusable bags as a sustainable investment
Investing in reusable bags can be your first sustainability investment. Investing in reusable bags can save you money in a couple of ways:
- Get ahead of regulations. More and more governments are banning or taxing plastic bags. Investing in reusable bags now will allow you to avoid any plastic regulations in the future.
- It saves resources. Plastic waste and greenhouse gas emissions cause climate change that depletes natural resources, many of which may be imperative to your company. By doing your part to reduce plastic waste in the environment, you will help preserve important natural resources before prices go up or they become unusable.
- Lower operating costs. Rather than having to purchase hundreds, or even thousands, of single-use plastic bags that you give away for free, you can instead sell reusable bags, eliminating your single-use plastic bag budget.
- Increase brand loyalty through sustainable marketing. If you invest in reusable bags through Bk-bags, you can let your customers know that your reusable bags come from ethical sources, are often made of recycled materials, and can be biodegradable or recyclable, depending on the bag type. Your customers can feel good about using reusable bags from Bk-bags, and potential customers may be convinced to support your company because of your sustainable choice of investing in reusable bags.
Sustainability investing isn’t just something that’s a nice idea; it’s an investment strategy that yields real returns, both financially and for the environment. For the survival of your company and our planet, it may behoove you to start making real changes toward sustainability to preserve customer loyalty, save essential resources, and ultimately see higher profits for your business.