As it happens, “greening” your business could mean a boost for the environment as well as your company’s bottom line. There is now empirical evidence showing the adoption of sustainable policies, including environmental management and product standards, increases employee productivity, creating real and positive impacts on a company.
In the past decade, studies have shown that the improved lighting, ventilation, and general environment of Energy Star and LEED certified buildings lead to a decrease in employee sick days and an increase in perceived productivity, and thereby, economic benefits. A recent study by UCLA professor Magali Delmas and University of Paris-Dauphine’s Sanja Pekovic delves a little deeper and is the first to demonstrate how a company’s environmental commitment affects its productivity. The study, Environmental standards and labor productivity: Understanding the mechanisms that sustain sustainability, was published this September in the Journal of Organizational Behavior. Check it out here.
The findings are surprisingly clear: employee productivity is 16% higher at companies that adopt environmental practices. “Green” companies include those that follow international standards and adopt eco-labels such as “fair trade” and “organic.”
The robust jump in productivity can be attributed to a “virtuous cycle.” As described by Delmas, companies attract top people, then adopt environmental practices, and in turn, attract even better people. Patagonia is a prime example of the cyclical improvement of sustainably-minded companies. It has seen widespread success in the outdoor adventure retail space, is applauded for its longstanding sustainability efforts, and attracts an average of 900 applicants for each open position. After adopting a range of sustainability measures, a boutique hotel in Santa Monica, CA, also saw improved employee health and happiness.
Green companies create motivated employees who receive more training and improved interpersonal relationships. The result is increased employee productivity over conventional firms. Management will hopefully take note of the success of such companies and studies that consistently reveal the economic benefits of sustainability initiatives. As Delmas attests, “Adopting green practices isn’t just good for the environment. It’s good for your employees and it’s good for your bottom line.”