Green is the New Black
Earlier this month, Woolworths Ltd, the second largest revenue earning company in Australia, announced that it's supermarkets (including Big W, BWS and Harris Farm) will stop using plastic bags by the end of this financial year, replacing them with paper bags, reusable bags and reused cardboard boxes.
The French government also announced this month, that it is set to ban the sale of petrol and diesel vehicles by 2040, and plans to become carbon neutral by 2050, with financial assistance committed to lower-income earners to help them with the cost of replacing polluting vehicles with cleaner ones. Norway, The Netherlands, Germany and India are hoping to meet these same targets by 2025-2030.
And it's not just governments and multi-billion corporations that are affecting change - even your local cafe is likely to give you a discount on your morning latte if you bring a keep cup with you, instead of using one of their disposable cups. In case you haven't heard, 50,000 takeaway coffees are being consumed every 30 minutes in Australia, and up to one BILLION coffee cups go to landfill every year.
There is a rapidly growing trend toward Corporate Social Responsibility, fueled by a realisation that we are heading toward a future of environmental degradation that we may not be able to come back from. It wasn't always the case. An infamous example of the anti-CSR board mentality of the past is that of Ford's 'explosive' Pintos in the 1970s. It turned out that a rear-end collision caused the cars to burst into flames. Rather than incur the cost of recalling all their Pinto cars, Ford decided it would be more cost effective to pay compensation for each claim that was made as a result of one of these life-threatening collisions.
So what is Corporate Social Responsibility?
Corporate Social Responsibility (CSR) is a business approach that is often adopted with the view of improving society in some way, by considering the impact of a company's actions on a social, economic and environmental level, beyond what is required by law.
The days of the 'ruthless investor' archetype are long gone: Most shareholders in today's internet-savvy society would forego higher returns in exchange for a share in a company that cares about equal rights, climate change and charity. Similarly, consumers often are willing to pay more for a good or service, if they are dealing with a business who's values align with their own.
Small-to-medium Enterprises (SMEs) make up 97% of all businesses in Australia, which means that as a whole, SMEs have the potential to make a huge positive change to social and environmental issues. Not only that, but from a marketing and financial perspective, you can't afford to alienate your potential customers by ignoring society's demand for businesses to care more.
And it turns out that sometimes, implementing positive social change is better for your bottom line. Here are some ideas for implementing a CSR approach in your business, that could save you tax and increase your net profit:
Invest in new equipment
Old equipment costs more to maintain and operate, as it reaches the end of it's useful life. This is especially true for cars. A car that is more than 5 years old requires higher servicing costs, more frequent replacement of parts and is less fuel efficient. This is generally true for most mechanical equipment. If you have a business with turnover of less than $10 million, you can get an instant asset write-off for any business asset purchased under $20,000.
Solar power is incredibly cheap and you may be able to sell your excess solar-generated electricity back to power companies. So you not only save energy costs while reducing your carbon footprint, you can potentially make money from it too. A lot of solar power companies can provide lease arrangements for commercial scale solar power systems so you don't have any initial capital outlay. But if you do have the initial outlay, you can still claim the instant asset write-off for capital equipment under $20,000.
Having a paperless business can greatly reduce your overheads. From eliminating the cost of paper, ink, printers and writing tools, to digitising files and records which can free up your physical office space, to replacing mail with email correspondence; the practical benefits of being a paperless business are vast. The #waronwaste can begin with the simple option of having receipts emailed to customers instead of printing them onto thermal paper from an eftpos machine which will get thrown in the bin. Your customers will appreciate a more lasting record of their transaction as well, especially if they can claim it in their tax return!
Cut down on Travel
Virtual meetings and phone appointments can greatly reduce (or even eliminate) your travel costs, as well as saving precious time spent in transit. Sometimes face-to-face meetings are unavoidable, and often, the more human approach will suit your customers, but it's always good to offer the option of a phone or Skype appointment. Similarly self-paced training, workshops, seminars and self-education courses can often be done online. Lastly, consider offering your employees 'work from home' days. An employer who cares about their staff's work-life-balance is rewarded with a highly motivated and productive team. All of these changes have the potential to significantly increase your profit in numerous ways, especially if you have a large team of people working for you, and clients/suppliers in various locations.
You can make a one-off or periodic donation, pledge a percentage of your sales to a charitable cause, sponsor or support a social enterprise (such as thankyou.), contribute goods, services or discounts to a charity raffle, donate 2nd hand furniture, equipment, consumables and old merchandise to an opportunity shop, or hold a fundraiser. You can probably think of many others! Donations and sponsorships are tax deductible, and any of these endeavors will be appreciated and admired by your customers. They'll also make you feel good :)
FREE ADVICE TO ALL BUSINESSES
Whether you are an existing client or just looking around, please contact me if you have any questions about how your business can improve or implement a CSR strategy. I am more than happy to offer professional and creative advice tailored to your business, at no charge.
How this works: Send me an email with an introduction about your business, and we will start a conversation. Absolutely no strings attached.