The ROI of Sustainability: How Green Leads to Green
Photo by Abhinav Sunil
Why is measuring the impact of your efforts important? Because if you can measure it, you can improve it. Especially if what you measure has profound consequences equally for your business, your professional life, and your personal life. You need a clear strategy not only to measure it, but also to calculate carefully how much effort you should exert, where those efforts should be focused, and when you can expect returns on these investments. This lets you constantly improve on your actions.
Sustainability is an important sector in need of focused investment analysis. Investing in sustainability initiatives and measuring the impact you have is not a choice for organizations anymore — it’s a matter of survival. Customers demand it, employees demand it, investors demand it, and governments demand it.
Organizations often are at the crossroads of having to respond to these demands and prioritizing concrete action. Technology professionals struggle to make the case to leadership and the board that these investments make sense for the health of the organization. Conversely, leaders look for meaningful metrics to make sustainability part of the corporate culture. Forrester proposed a sustainability framework to help identify where to start. As a next step, we now look to analyze the financial returns possible on sustainability investments. Your own sustainability strategy needs to account for the economic — as well as the altruistic — impact.
So, how can we calculate the ROI of something with such a wide and intangible scope? First, we created a hypothetical organization that will go from implementing the basic reactions to environmental and governmental regulations to a state of systematic investments in effective sustainability activities. Next, we put real-world figures to these investments from our surveys and analysis and tracked returns to specific initiatives. To this, we added a risk coefficient to ensure a realistic result in calculation.
We structured this analysis with Forrester’s proven Total Economic Impact™ (TEI) methodology to illustrate the risks, benefits (impact on business), costs (impact on budget), and flexibility (to allow for each organization’s unique variations).
Sustainability is synonymous with optimization and innovation. Optimization is often a product of all sustainability efforts. This leads to indisputable business value. Returns from investments in sustainability come from both internal drivers as well as external factors.
Internally, some of the biggest drivers come from an optimized value chain, operational efficiency, employee retention, and workplace satisfaction. Externally, a clear sustainability roadmap leads to more client opportunities, better branding, and adherence to government mandates.
Of course, sustainability initiatives are first and foremost about the planet, and the total impact of these initiatives extends to well beyond your own immediate sphere of influence. This impact can be hard to measure and quantify — such as the benefits to flora and fauna, changes to corporate culture, the cascading health effects of a clean environment, or the preservation of distant Antarctic glaciers.
After all, a safe and rich home — Earth as it was meant to be — that we can hand down to our children is priceless. Earth Day is a good time to reflect that our legacy and commitment to the planet must be immeasurable. A journey of a thousand steps begins with the first step, and we hope this work will help assess why these initial steps are fruitful to undertake. Being green for the planet makes you more green in the bank.
Read our reports “Factors Driving The ROI Of Sustainability” and “Assess Your Own Sustainability ROI” to know more. Join our complimentary webinar where we discuss the ROI of sustainability along with a client spotlight. Forrester’s Abhijit Sunil and Jan Sythoff collaborated on this body of work. Reach out to us at email@example.com or firstname.lastname@example.org.