How much does it cost for your company not to invest in sustainability?
3 areas impacted by the expense of not investing in sustainability
Today, for a company to start on a path of environmental sustainability is not only a competitive advantage, it is also an opportunity to reduce costs and lost revenues.
We have identified 3 areas of the company that are generally not directly related to sustainability, but that can bring extra expenses related to poor environmental performance.
- Insurance premiums: insurance companies recognize a lower risk profile for companies with good sustainability performance. This translates into lower insurance premiums for these companies.
Specifically, a company that does not have good sustainability standards pays an average of 0.06 percent more on its annual turnover, compared to a virtuous company.
- Interest on financing: companies engaged in sustainable practices, for example, that have calculated their emissions and initiated reduction actions, provide more security to lenders and financial institutions. Therefore, in addition to being more easily attracted, financial institutions offer more favorable terms on loans.
In numerical terms, each year a company with poor environmental performance spends an additional 0.02% of its annual turnover from interest on loans.
- Staff retention: 1/4 of a company's staff would seriously consider changing jobs if their current one did not demonstrate a commitment to sustainability.
Thefailure to demonstrate a focus on these issues can result in the loss of key talent, and the inevitable cost of hiring and training new people, which can reach cost the company 1.5-2 times the individual employee's annual salary.
Annual expenditure due to poor environmental performance
So how much does it cost not to invest in environmental sustainability?
The expense you are incurring each year by deciding not to invest in sustainability varies between 2.36 percent and 7.73 percent of your turnover. Clearly this is an indicative range, in detail these percentages vary depending on the type of business, the market and the sector in which the company operates.
Detailed information, with respect to the type of business (industry or services) and your company's target market (B2B or B2C), can be found in the infographic created by the Up2You Insight team. Fill out the form below and download it for free!
