Why going green is good for business

There is an increasingly large focus on how we exist in the world without doing harm to our environment. Recycling, renewable energy, electric cars; innovations will no doubt continue to meet this demand. But do you apply that same focus to your business? Maybe you should, because there are many incentives for businesses to go green. Green business can ultimately save you money and greatly improve your company image as an eco-friendly business!

Whilst some companies will undoubtedly be ‘doing their bit’, many worry about the costs of implementing changes, though not necessarily about defying new legislation. If you aren’t aware of what legislation affects your business then it’s time to find out. A number of sources can inform you about this, including your trade association, your local authority, and the local branch of the Environmental Agency.

Will going green save your business money in the long run?

Environmental legislation has increased substantially. And ignoring the law can carry heavy penalties, both financial and criminal. By planning, you can minimise the cost of changing your equipment, work practices and avoiding the hefty fines to boot!

How to go green and be an eco-friendly business

Updating equipment

You could update your equipment to models that use less electricity and produce fewer emissions. Plus, more energy efficient equipment can save you money and possibly offer tax incentives. If you invest in more efficient equipment, long-term benefits can easily outweigh the short-term cost.

Auditing energy usage

If you need help, an ‘energy audit’ can identify ways of becoming more efficient. The Carbon Trust provides advice on how do this.

Reviewing suppliers

How can you best source your raw materials? Are they available locally? What leaves the smallest carbon footprint? Even though they may cost slightly more, the savings on transport could outweigh the initial price. It’s also a good thing for your local economy.

Managing risks

What risks does your business poses to the environment. Is there a likelihood of an accident and potential damage? Invest in good risk management to save you from potential fines and payouts to affected businesses, councils, or individuals.


Try to recycle/use recyclable packaging. If you handle over 50 tonnes of packaging per year and have a turnover of £2m+, you are required by law to recycle a percentage of your packaging waste. Many customers are willing to pay more for green products and services, so being environmentally friendly can ultimately have its own financial rewards.

Will going green improve my company image?

The short answer is yes! Green business is good for your image, and many customers prefer to use green companies who are eco-friendly. There are many incentives for business to go green, like competitive advantage. Good environmental credentials could give you the edge over your competitors. And if you are part of a supply chain then you should also be aware that larger companies are often looking for greener credentials amongst their supply chain. If you don’t fit their criteria as an eco-friendly business you could be missing out.

Other parties to consider, who may look unfavourably on you if your green profile isn’t up to scratch, could include business partners, investors, insurers and banks. Even potential employees can be fickle about choosing companies to work for if they don’t appear to take green issues seriously or have green business ideas in the pipeline.

It is worth ensuring all environmental credentials, such as the steps you take to reduce waste and recycle, lower impact on environment and so on, are visible on your packaging and/or website. This will inform your customers and help boost your green business image.

Does my insurance help with my environmental responsibilities?

It’s easy to assume that only businesses in certain industries such as waste management or chemical manufacturing need environmental impairment liability. However, all businesses need to assess their environmental liability risks. Every business needs to be aware of and review how their activities could affect the surrounding environment.

Policies will vary widely based on the insurer, so businesses need to make sure they know exactly what their policy contains. Typical policies can include:

  • Own site clean-up costs
  • Third-party clean-up costs
  • Investigation and defence costs
  • Gradual pollution for third party legal liability during policy period
  • Cover for both new and pre-existing pollution incidents - each may have their own limits of liability, terms and excesses
  • Bio-diversity damage or environmental damage for protected sites or sites of scientific interest
  • Business interruption insurance, if production needs to stop or there is intervention by a regulator
  • Be sure to check your policy with your broker so you are aware of what is and isn’t covered.


Zywave: Cover overview; Environmental impairment liability