Finding the ROI in Sustainability

This article is part of a series on “The ROI of Sustainability,” written with the support of MeterHero. MeterHero helps companies and organizations offset their water and energy footprints through consumer engagement. To follow along with the rest of the series, click here.

Just about anyone who has worked in the area of sustainability has had to deal with the question of justifying long-term investments on a financial basis. Some measures, like fixing leaks and making efficiency improvements, pay off quickly and are therefore easy to approve. These are the proverbial low-hanging fruit. It’s when the investments take a little longer to pay off in dollars and cents that the conversation between sustainability director and CFO becomes a little more challenging.

I spoke with McGee Young, the founder of MeterHero, which helps companies cut their impact through consumer engagement, about this question of sustainability’s ROI. He agreed that not only is it a vitally important question, but it is also one that requires a bit of out-of-the-box thinking to address properly. According to Young, those sticking with a strict show-me-the-impact-on-this-year’s-bottom-line approach are working with the outdated assumption that the environment we are operating in is not about to change into one that will be far more expensive and difficult. “There is a period of instability coming that’s going to affect the weather, the availability of resources and the cost of doing business,” he said.

Operating under the wrong set of assumptions is probably the No. 1 cause of death among companies. "If your company doesn’t adapt,” says Young, “a startup will come along, and you will likely get blown out of the water, because your business processes were designed for an era of surplus. Other companies will eat your lunch. It’s really all about your ability to think beyond your current market.”

“Sustainability,” says Young, “is not just about running more efficiently or using less carbon. It’s about being able to sustain yourself in a future that's going to be defined by disruption and change.”

But taking action today will not only help to mitigate the impacts of climate change, but also make a company more resilient. There is a third benefit to taking action, says Young: “It provides a meaningful way to connect with your customers.”

Consumers today, especially among the younger crowd, are more aware than ever of who they are buying from, and they expect responsible behavior from those with whom they engage. Before long, a net-zero operation will be the price of admission. Those looking to stand out from the crowd will need to go net-negative. How does one do that?

Young says, “There are three things you can do. You can conserve. You can produce your own, and you can help other people to save.” It’s that third category that can push you beyond the new normal, and that’s where companies like MeterHero come in. After you’ve gotten your own footprint as low as you can, you can effectively make it even lower -- possibly even below zero -- by helping others reduce theirs. It’s essentially the same principle as that used in carbon offsets.

MeterHero provides a simple and straightforward means for companies and individuals to facilitate the reduction of both carbon and water footprint among a large pool of individual consumers. They do this by calculating and distributing a system of rebates, contributed by sponsors, and awarding them to those “savers” who have demonstrated meaningful reductions in their usage of both energy and water month-over-month and year-over-year. Water is becoming an increasingly important issue, not just because of flooding and drought, but also because of the large amount of energy required to pump and purify it.

MeterHero’s program is modest in this early phase, with somewhere around 2000 savers. Each is receiving an average rebate of $12 for their reduced consumption, over and above the savings they are seeing on their bills. In return, not only do the sponsors get to reduce their own footprints, but they are also building relationships with the savers. It’s an investment in the future that pays off in multiple ways. It helps reduce the overall societal footprint and improves resiliency by incentivizing not only more efficient behavior, but also the purchase of more efficient items. At the same time, it builds relationships that are based on a sponsor’s concern for the wellbeing of the planet and not just its own. That’s something that more and more consumers appreciate. In a sense, it’s a mechanism to turn long-term thinking into short-term results. That’s something that both sustainability and finance experts can understand.

There will still be those companies that will focus on throwing their weight around with regulators through lobbying and campaign contributions. But that can only postpone the consequences of operating out of sync with the planetary reality, and those consequences will only get worse the longer we ignore them. Mother Nature will not be persuaded or impressed, nor does she "play ball."

In the meantime, companies that are realigning their missions and their operations to reflect the facts of life as we now understand them will be better positioned to deal with the changes that are coming, and more trusted by those consumers that are looking for and creating the leaders of the new economy. When viewed from this perspective, the question of sustainability and its ROI becomes a strategic imperative and not just a tactic or a line item in a budget.

Image credit: Flickr/Roland M-Fà