Green is good for the planet, business

There is a global mandate for business and industry to adopt environmentally friendly practices, but many financial advisers don't understand how going green can benefit their practices.

There is a global mandate for business and industry to adopt environmentally friendly practices, but many financial advisers don’t understand how going green can benefit their practices.

Moreover, there is evidence that the financial industry has been slow to reduce its carbon footprint.

That means that advisers are missing an opportunity to realize economic benefits, demonstrate community leadership and make a long-term contribution to society by doing something good for Mother Earth.

The process for building a sustainable office takes real effort.

But these sustainable practices produce a tangible return on investment, enhance firm and brand reputation, increase the ability to attract and retain clients, along with improving employee morale, health and productivity.

Environmental and business experts have developed several new approaches to building sustainable business strategies.

One approach is to consider the three legs of the “sustainability stool” — environment, clients and employees, and firm economics. Using these considerations, you can develop a strategic plan that allows you to benchmark and measure your progress.

Technology can help advisers improve their processes, reduce energy consumption, enhance operational efficiencies and reduce carbon footprints.

For instance, document management software can create a “paperless” office.

On average, a document is copied 22 times, and hours are spent filing papers and retrieving them from paper files and cabinets.

Moreover, investment advisers have excellent opportunities to realize savings and reduce carbon-generating activities through automated work flow.

One innovation involves integrating customer relationship management systems with a secure, private website for each client. As you develop your sustainability strategy, there are many areas to consider in your operations and in your own office footprint, such as energy use, recycling, water conservation, purchasing, heating and air conditioning.

Advisers reduce energy costs through approaches such as performance lighting and adding programmable controls on heating and air-conditioning equipment

According to Verdiem Corp. of Seattle, a power management software firm, 15 personal computers can generate as much carbon emissions as a midsize car per year.

Automatically putting computers in sleep mode during inactive times can cut energy use an average of 60% to 70% and lower carbon generation significantly.

A key aspect to implementing sustainable strategies involves changing both your clients’ and employees’ behavior. In addition, people are looking for products, services and companies that are committed to sustainable strategies.

To capitalize on that, create a communications and public relations campaign to generate awareness and interest in what you are doing to build a sustainable office, and invite clients to participate.

Some advisers offer incentives to change behavior, such as giving employees bonuses, gift certificates, recognition or paid time off for contributing ideas that improve how an advisory firm consumes resources.

Additionally, training clients to do business electronically generates quicker responses and real-time access to information.

Perhaps the most striking benefit to going green and creating a sustainable office is the substantial cost savings and return on investment. Anything that enhances efficiencies and improves business processing will reduce energy and time.

Simply by implementing technology to help with work flow processes, advisers are seeing a 9% reduction in overhead as a percentage of revenue. They also experience increases in the value of the business of hundreds of thousands of dollars to millions of dollars, depending on the size of the firm, according to a recent white paper from Laserfiche of Long Beach, Calif.

On the marketing and public relations front, the ability to communicate a sustainability plan creates a great opportunity to demonstrate green practices and accomplishments to clients. That often leads to more referrals and the ability to monetize the good will you are generating through increased firm differentiation and awareness.

Timothy D. Welsh is the president and founder of Nexus Strategy LLC, a Larkspur, Calif., consulting firm to the wealth management industry. Louise Barnes is a senior consultant at Fire Up Consulting LLC, a sustainability consulting firm in Piedmont, Calif.

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