There is much talk about going green in today's business world, with both regulators and consumers expecting businesses to clean up their acts. However, that isn't necessarily a bad thing, as data from Accenture suggestsÂ companies that utilize Lean sustainability actually profit more than those that don't. In other words, utilizing Lean to go green can actually help businesses make more money in some cases.
Accenture analyzed the top 275 companies from the Fortune 1000 list to evaluate the impact of sustainable strategies and initiatives on the success of businesses. Accenture evaluated these initiatives in three-year totals and foundÂ the companies that were the most active in achieving sustainability realized returns 16 percent greater than those on the bottom of the list.
Driving return by reducing costs
In general, sustainable leaders were able to drive returns on investment by reducing costs through increased efficiency. Companies can save millions of dollars by simply using less energy (such as fuel to power transportation or electricity for production lines) and fewer raw materials (using leftover wood chips to create new products, for instance). On top of that, these measures also help companies meet environmental regulations, such as reducing carbon emissions.
“Doing the right thing with Lean improvement can also mean doing the profitable thing,” Accenture explains, adding, “With its core focus on waste reduction, Lean improvement is not only philosophically aligned with the strategic levers of sustainable development; it also provides a tested methodology to effect the transformation to a sustainable culture.”
Just because Accenture's study revolved around some of the world's biggest and most successful businesses, thatÂ doesn't meanÂ Lean sustainability is only viable for them. Lean continuous improvement works the same regardless of company size and has a number of additional benefits, from improving brand image to greater employee morale.
In fact, smaller companies may face even greater challenges in terms of budget management, which makes Lean even more effective for them. If resources are ever scarce, companies need to make the best possible use of them, and Lean enables businesses to do just that. Achieving sustainability is just oneÂ perk that makes Lean a more attractive practice for organizations.