8 Benefits of Becoming a Sustainable Business

Paige Smith

Adopting environmentally sustainable business practices can take considerable effort, but it has the potential to pay dividends—for the planet and your operation. Keep reading to learn more about small business sustainability and its many benefits. 

What does it mean to be a sustainable business? 

Pursuing environmental sustainability means finding responsible ways to manage natural resources—including air, water, minerals, metals, wildlife, and soil—so both present and future generations can adequately meet their needs. 

Pursuing small business sustainability means making choices and adopting practices within your operation that support the environment and the health and well-being of the people who depend on it. 

Most small business sustainability practices serve one of two main goals: 1) lower energy usage or 2) reduce waste. However, there are hundreds of ways a sustainable business can look and operate. 

Here are some common ways to incorporate sustainability into your business and improve your environmental impact:

  • Develop products using renewable or recycled materials
  • Source local materials for your products
  • Switch to renewable energy technology
  • Streamline your supply chain
  • Implement a recycling program
  • Donate part of your profits to environmental organizations
  • Partner with non-profit organizations doing sustainable work you support 

8 benefits of building a sustainable business

The most obvious and important reason for building a sustainable business is making a positive impact on the health of the planet. However, there are upsides beyond moving the needle on issues like climate change and pollution. 

If you’re wondering why you should become more eco-conscious, we’ve got you covered. Here are eight powerful benefits to consider: 

1. Keeps you competitive 

As global environmental threats increase in severity, prioritizing sustainability in your business isn’t just a smart idea—it’s a necessity. In Deloitte’s 2023 CxO Sustainability Report, 61% of the companies surveyed said they expect climate change to affect their business strategy and operations over the next three years. 

Sustainability-focused businesses are quickly becoming the standard. Over half (59%) of the companies surveyed in Deloitte’s report said they’ve already started using more sustainable materials and increasing their energy efficiency. 

Depending on what industry you’re in, where you’re located, and what demographic you cater to, becoming more sustainable will have one of two positive effects: 1) Give you a competitive advantage or 2) help you keep pace with your peers. Either way, it’s a win-win. 

2. Helps you attract and retain more customers

Implementing—and ethically advertising—sustainable business practices can help you reach new customer demographics and foster loyalty with your current ones. Just as business owners are adjusting their priorities, so are consumers. 

According to 2023 research from Bain & Company, 64% of consumers report a high level of concern about the environment—and it’s affecting their shopping habits and spending. Half of the respondents from Bain & Company’s survey said sustainability is one of their top four criteria when purchasing products and services. 

What’s more, consumers are looking to small, independent businesses to guide them; 45% surveyed said they trust small businesses to create genuinely sustainable products, compared to 28% of consumers who trust large corporations.

As a business owner, you have a unique opportunity to address consumers’ environmental concerns. When you do, not only can you more easily draw in new eco-conscious customers, you’ll also be able to deepen trust with the people you regularly serve. 

Small but significant changes like upgrading your packaging to recyclable materials or launching a donation campaign to a reputable environmental organization can compel customers to return, write a positive online review, or refer you to their family and friends. 

3. Helps increase operational efficiency

Many sustainability initiatives have the bonus effect of improving your operational efficiency. Take the supply chain, for example. Reducing steps in the chain is crucial from a sustainability standpoint, since it decreases your carbon emissions, prevents overproduction that leads to waste, and ultimately reduces your carbon footprint. 

As a result, you reduce waiting times and eliminate transportation hurdles, helping you speed up your production process and optimize your output. 

Other sustainable changes, like upgrading your business tools, can also streamline operations. Using business payroll software, for example, can automate tedious manual processes and cut down on paper waste.   

4. Reduces compliance risk 

When you commit to sustainable practices in your operation, you reduce your compliance risk—for both current and forthcoming environmental laws. 

As a business owner, you have to abide by a slew of different environmental safety and sustainability regulations, including federal laws like The Clean Water Act and The Comprehensive Environmental Response, Compensation, and Liability Act.

Plus, many state and local governments have changing regulations around:

  • Hazardous waste management
  • Recycling and waste management
  • Energy efficiency
  • Green building
  • Water quality 
  • Air quality
  • Pollution control 

Depending on your business, you may need to acquire certain permits for work, use specific types of energy, track your operation’s emissions or energy usage, report to state agencies, or obtain certifications for certain business projects. 

Even if the majority of environmental laws don’t apply to your business today, putting sustainable operational practices in place now can help you get ahead of inevitable changes to the law. 

5. Can raise employee satisfaction and retention rates

Becoming a more eco-conscious business doesn’t just make a difference to customers—it can also have a positive effect on your employees. Most people want a greater sense of purpose at work; connecting your employees to the bigger picture of environmental sustainability is one way to give their work purpose and meaning beyond serving your business’s bottom line. 

Another way to prioritize sustainability as a business is to support employees affected by climate change. The Harvard Business Review said more organizations are offering and promoting climate change protection as part of their employee benefits package in 2024. That protection could include designated paid time off, short-term housing subsidies, recovery stipends, or specialized mental health support for employees who suffer hardships from natural disasters. 

Whatever approach you take, centering sustainability in your business can help improve the employee experience, which can then lead to greater employee satisfaction and higher retention rates. 

6. Increases your longevity

When you prioritize sustainability, you’re doing your part to protect the planet while also laying a foundation for steady business growth and longevity

Making eco-friendly business changes helps in the short term by lowering your utilities costs and streamlining operations, but it’s ultimately a long game. Operating sustainably helps you strengthen your supply chain, foster customer loyalty, improve your brand reputation, and create an engaged workforce—all of which make it easier to build a business with staying power. 

7. May give you tax advantages

Another benefit of being an eco-conscious business is the potential for tax breaks. Both federal and state governments have green tax incentives designed to motivate businesses to make environmentally-friendly changes to their operation, like switching to renewable energy or driving electric delivery vehicles. 

Here are some common federal green tax incentives for businesses in the United States:

States like California, Texas, and New York are also leading the way in green tax incentives and environmental programs for small businesses. To see if your state and county have specific green tax incentives or programs relevant to you, check out the Database of State Incentives for Renewables and Efficiency

8. Boosts your bottom line 

Sustainability-minded businesses have the potential to fare better financially. Using energy-efficient equipment and tools can lower your operational costs, freeing up cash flow to invest back into your products or customers. 

Fortifying your supply chain can help protect you from economic fluctuations, while reaching new customers with eco-friendly practices can raise your overall earning potential. 

The challenges of becoming a sustainable business 

There are no real downsides to building a more sustainable operation, but there are challenges you could face along the way. Here are some to keep in mind: 

  • Knowing how and where to start can feel overwhelming
  • Making sustainable changes to your supply chain often requires changing vendors and processes
  • You might experience downtime during the transition to more sustainable operations 
  • It takes considerable effort and cash flow to develop sustainable products and services
  • You might have to raise your prices on sustainable products and services, which could initially deter some customers 
  • Figuring out how to advertise your business’s sustainable practices or products can feel tricky
  • You need to be careful not to fall into the trap of greenwashing, which involves making false or misleading environmental claims to customers

Of course, the benefits of operating sustainability outweigh the difficulties, but it’s important to keep these obstacles in mind so you know how to prepare for them. 

How to get started with sustainability

Making sustainable changes to your business doesn’t have to be intimidating. The best place to start is with a pen and paper, reflecting on your business’s goals and vision for sustainability. From there, you can create a sustainability plan tailored to your business model, budget, and timeline. 

Paige Smith Paige is a content marketing writer specializing in business, finance, and tech. She regularly writes for a number of B2B industry leaders, including fintech companies and small business lenders. See more of her work here:
Back to top