Question

Are there business advantages to using sustainable or green suppliers? If so, what are they? If not, do you think a traditional return on investment analysis captures all possible benefits of going green?

Answer 1

Ans:- Yes definitely there are business advantages of using sustainable or green suppliers. Consumers these days are aware of the environmental situation globally and its repercussions, in the long run. Therefore most of them want to use eco-friendly products which will keep them as well as the environment clean and safe.

Business advantages of using green suppliers or eco-friendly products are as follows:-

(1) Positive Brand Image:- If the company is using eco-friendly packaging and manufacturing products then it helps the environment clean and their customers healthy which in turn create a positive image on the minds of their customer which will strengthen their brand value.

(2) Increase in sales:- It will help the company to increase its sales because a positive brand value is created which will attract new customers.

(3) Reduces the risks:- If the company uses eco-friendly packaging material then it will not only help in keeping the environment clean but the end products will also be healthy for their customers which will lessen the environmental risk as well as health risks of the customers.

(4) Cost reduction:- eco-friendly materials will automatically reduce the packaging costs which in turn will reduce the overall costs.

(5) If the Positive Brand value is created in the market then it will definitely lead to an increase in overall ROI and EPS.

I don't think the traditional return on investment analysis captures all possible benefits of going green because the traditional return is only limited to monetary value whereas companies that are more sensitive towards the environment and health of their customers will create a much more valuable brand sooner or later.