Calculating Benefits

While cost-benefit analysis, net present value and internal rate of return calculations are valuable tools to sell a business on a sustainability project, other factors should be used when discussing the value proposition.

Author Bob Willard, The Sustainability Advantage, has done interesting research to calculate bottom-line benefits to businesses that implement sustainability projects. Employee recruitment, attrition and productivity factor into the calculus. So do market share and insurance costs. 

• Reduced recruiting cost (-1%)
• Reduced attrition cost (-2%)
• Increased employee productivity (+10%)
• Eco-efficiencies in manufacturing (-5%)
• Eco-efficiencies at commercial sites (-20%)
• Increased revenues/market share (+5%)
• Lower insurance and borrowing costs (-5%)

In the aggregate, Willard argues that these benefits offer a profit increase of at least 38%. Add to this calculus the difficult to quantify, but nonetheless meaningful, spiritual benefit of being a good steward of our environment for future generations. 

For those who try to motivate business managers to implement sustainability projects, broaden the conversation beyond operational cost savings. Some of the benefits listed above may resonate with your target audience and inspire her/him to agree to implement your proposed sustainability project. 

Photo courtesy of Tecnowey