Capitalize Green
- By [ Erin Hiatt , Katie Nicholos ]
In today’s consumer-driven economy, corporate social responsibility is no longer an option; it's a necessity. Increasingly, investors and consumers want to do business with companies leading on sustainability that extend from supply chains into stores. And environmental benefits aside, these investments help reduce risk exposure and build loyalty with customers and employees alike.
That's why we've worked to develop a toolbox of resources to help retail finance teams understand the opportunities presented by sustainability. Explore the issue and resources below to learn more about how your company can #CapitalizeGreen.
Sustainability's Financial Impact
Across industries, sustainability and energy projects are proving their value to the bottom line. Reducing environmental impacts often mean reducing costs and risk by increasing efficiency and brand value. Consider these examples:
- The World Economic Forum (WEF) and Accenture found that a series of sustainable supply chain practices result in a 9 to 16 percent cost reduction and a revenue increase of 5 to 20 percent.
- Nike's CFO directly credits sustainability with driving much of the company's innovation work, where they expect to see 50% of the company's revenue growth.
- As of 2015, Microsoft has saved more than $10 million a year with an internal carbon fee. In this model, Microsoft's business groups pay an incremental fee for activities that increase carbon emissions, incenting employees to reduce their carbon footprint and costs.
- Unilever found that its sustainable-living brands have grown 46 percent faster than the rest of the business and delivered 70 percent of its turnover growth.
- HP attributes $700 million in new revenue from 2017 to contracts or sales in which sustainability factors were a known consideration -- a 38 percent year-over-year increase in sales bids with sustainability requirements.
Increasingly,companies are expected to leverag sustainability programs to reap greater shareholder value because they reduce costs and help manage risks. Studies show that brands with purpose (brands that offer functional benefits, personal well-being, and collective well-being) perform better on marketing key performance indicators such as impression, brand familiarity, premium pricing, and purchase and repurchase intent than brands that are not purpose-led.
And according to a 2016 Deloitte global survey of C-Suites and Boards, Sustainability and CSR rank as the top current risk having an impact on corporate strategy.
"The doubters got on board quickly when they saw that our P&L could beneift while we were doing good work for the environment"
Doug McMillon
- CEO
- Walmart
Sustainable Investor Impact
Increasingly, companies are expected to leverage sustainability programs to reap greater shareholder value because they reduce costs and help manage risks.
Studies show that brands with purpose (brands that offer functional benefits, personal well-being, and collective well-being) perform better on marketing key performance indicators—such as impression, brand familiarity, premium pricing, and purchase and repurchase intent—than brands that are not purpose-led.
And according to a 2016 Deloitte global survey of C-Suites and Boards, Sustainability and CSR rank as the top current risk having an impact on corporate strategy.
Resources
Explore project funding options that are unique to sustainability - as well as changes in the retail CFO role that make the sustainability department an increasingly strategic internal partner.
- RILA External Energy Financing Guide
- RILA Internal Energy Financing Guide
- RILA & Deloitte: The Evolving Role of Retail Finance
- RILA Keys to Collaborating with Other Business Units for Finance
Retail Spotlight
Case studies developed by RILA and DOE highlight the finical benefits of energy and sustainability programs.
- Best Buy - Exploratory Analysis Uncovers Energy Saving Opportunities
- Kohl's - Energy Finance Strategy
- The Home Depot - Financing a Renewable & Alternative Energy Commitment
- Food Lion - Comprehensive Energy Project Planning Enables Significant Efficiencies
- Best Buy - Update Internal Purchasing Systems to Facilitate a Portfolio-wide Energy Upgrade with Maintenance Funds
- adidas Group - Venture Capital Eneryg Fund
- Whole Foods - Making the Case for Rapid Solar Roll-outs
Related News
- Sustainable Brands, June 18, 2018, "Trending: Goldman Sachs, CMS Energy, Danish Pension Funds Take on Sustainability-Linked Investments"
- The Robin Report, June 12, 2018. "The New Sustainability"
- Bloomberg Technology, June 13, 2017, "Apple Issues a Second Green Bond to Finance Clean Energy
- Journal of Accountancy, Aug. 14, 2017, "CFOs and sustainability—a growing relationship"
- The Wall Street Journal, June 20, 2017, "As Sustainability Takes Root, Finance Takes Notice"
- Bloomberg, May 5, 2016, The Greening of Adidas: The German company funds energy savings with a VC model
- Harvard Business Review, Apr. 2014, "Sustainability a CFO Can Love"
Lessons from REI on financing an energy agenda
RILA sat down with retail energy veteran, Mark Lester, divisional vice president of retail operations with REI, to discuss energy management as a recent finance executive.
Read Q&ATags
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Ensuring a Safe, Sustainable Future
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Retail Works for All of Us