Business Sustainability – a strong case for an audit

Whilst many people are genuinely interested in the issue of business sustainability, the majority aren’t sure how it works within business or how sustainable process can be implemented. On the surface, it may not seem that sustainability and environmental issues have much to do with how a business operates or functions on a daily basis but when examined further it becomes apparent that sustainability affects businesses on both a short and long term basis.

Energy &Carbon Audit

Many businesses begin assessing their current energy usage by carrying out a carbon audit. A carbon audit enables businesses to identify how and where they’re using energy, the type of energy they’re using, the cost to the business and also the damage to the environment via co2 emissions. Whilst energy audit data is invaluable in terms of gaining insight into the energy usage of the business, in order to create true value, businesses must act upon the findings.

Solutions Audit

A solutions audit is an effective way for businesses to implement changes based upon the results of a carbon audit. For example, a solutions audit will focus on where the need for energy can be reduced and look at opportunities for changing necessary energy usage such as using an alternative source of energy. By doing this businesses can cut costs, limit the damage caused to the environment and potentially increase public perception of their brand.

Sustainability Case Studies

Despite the commercial advantages of incorporating sustainable practices into business, some companies still fail to recognise the financial savings which are available. In order to exemplify the opportunities to cut company costs while increasing sustainability, we’ve highlighted two case studies which show how changing company processes increases profit.

  • The first case study is based on a midsize office based company which implements eight changes across heating, voltage, lighting and cooling. By making these eight changes at a cost of £58,879 the company saves approximately £16,413 per annum. With the initial cost being offset within just 3.59 years, the company is getting a return on investment of 27.9%. In addition to this, it’s reducing its carbon emissions by 78.8 tonnes.
  • The second case study uses a transport based company which implement just four changes across it’s driving and vehicle departments. With a cost of just £15,925, the company saves £78,776 per annum. The return on investment is 494% and the cost will be offset in less than nine months. By aiming to increase sustainable processes, the company has increased its profitability considerably with just four changes to its method of operation.

Whilst the initial outlay required to implement changes can be off-putting, the cost is generally offset in a relatively short amount of time and yet the annual savings continue to save the business money year after year. In addition to this, the added profit increases the value of the company. With every £50,000 of profit equating to approximately 4.5-10 times that in capital value, the savings obtained from becoming more sustainable increase the capital value of the business as well as the annual profit.

Rather than merely being sustainable or profitable, businesses are beginning to realise that sustainable business processes can be used to increase profitability. By analysing their current usage and implementing appropriate changes businesses can effectively cut costs, increase efficiency, gain profits and add value thus ensuring commercial success as well as sustainability.

HW Fisher & Company is a commercially astute organisation – ranked as a mid-tier top 25 UK chartered accountancy firm, with a personal, partner-led service aimed at entrepreneurial small, medium enterprises (SMEs), large corporates and high-net worth individuals.

 

HW Fisher specialises in Business Sustainabilityaudit services, focussing heavily on bestpractice.For more information please visit http://www.hwfisher.co.uk/sustainability

 

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