Sustainability is more important than ever. A surprising 4 out of 5 people say that they’d rather choose a brand with a positive approach to sustainability, and a further 87% say they want businesses to act now to protect the future of the environment.
Sustainability can also save businesses money and improve their profit margins. Businesses that opt into recycling schemes may be eligible for grants, and waste reduction schemes ensure that no funds are wasted on unneeded stock or packaging.
But effective resource management can be tricky for small or medium-sized enterprises. Fortunately, businesses can audit themselves using International Organization for Standardization guidelines. This gives businesses a snapshot of their current resource management and gives leaders a clear direction for improvement.
Resource Management
Resource management isn’t a new concept in business management. However, few business leaders take resource management seriously and are more than willing to order excess stock or inefficient packaging.
Effective resource management accounts for a range of tangible and intangible assets. Businesses that are auditing their current processes will account for:
- Monetary budget
- Property and tangible assets
- Technology and digital assets
- Employees and their time
- Carbon use
Effectively allocating resources gives managers a top-down view of the business and all its assets. Managers can further improve resource management by forecasting future resource needs and adjusting operations to meet demands.
After forecasting future projects, managers can allocate their assets and give the right employees responsibility over certain resources. This can help businesses reduce their waste and streamline their operational efficiency.
Businesses that find they have overallocated their resources should undertake resource-leveling. Resource leveling helps managers adjust expectations and alter budgets or timelines. Resource leveling is particularly important for manufacturers or production-oriented businesses who can’t afford to halt operations entirely but still wish to improve their sustainability.
Improved Operational Efficiency
Sustainability can improve the operational efficiency of a business and increase its profitability. This reality comes as a surprise to many, who believe that sustainable businesses improve their resource management solely out of altruism.
According to data collected by Deutsche Bank, companies that value sustainability outperform their competitors in the medium and long term. Similarly, firms that produced lower greenhouse gases were more profitable and substantially outperformed other businesses on the FT Global 500 between 2005 and 2012.
Small and medium-sized enterprises can also benefit from better resource management and greater sustainability. Effective waste management can help businesses avoid fines and may help them secure important green grants. Investors will also look favorably on businesses that minimize waste, and business owners may find funding on sustainability-oriented sites like echoinggreen.org and GoodCompany Ventures.
Sustainability Goals
Effective resource management can help businesses achieve their environmental, social, and governance (ESG) goals and meet corporate sustainability standards. Effective resource management reduces a business’s carbon footprint and minimizes water usage and physical waste.
Using resource management to achieve ESG goals is also good for a business’ brand. Businesses that make serious commitments to sustainability can use hard data to show off their achievements and convince consumers that their brand aligns with commonly held values.
Marketing departments can also use effective resource management to reduce waste and minimize ecological damage. Data personalization improves sustainability efforts by tailoring marketing to suit the specific values and interests of each consumer. Personalized marketing can reduce marketing expenditures by 40% and free up funding for sustainability projects. Highly accurate advertisements also reduce waste and energy consumption, as marketers spend more time advertising to highly qualified consumers and hot leads.
Effective resource management also streamlines operations and frees up time to further pursue sustainability goals. This is particularly important for small businesses, which may only have a few key decision-makers in the entire organizational structure. Effective resource management means that business leaders spend less time finding ways to dispose of waste and more time considering environmental management schemes that minimize their impact on the environment.
Environmental Management Schemes
Effective resource management should dovetail seamlessly with businesses’ environmental management schemes (EMS). This principle is particularly important for businesses that produce a physical good or product, as waste from trimmings or packaging should be recycled or go towards EMS projects.
Businesses can create their own EMS, but the international standard for environmental management is ISO 14001:2015. ISO 14001 helps businesses audit their current operations and gives organizations a clear direction to follow to meet their environmental responsibilities through more effective resource management.
Effective EMSs should be built into every step of an organization’s operations. This helps decision-makers consider the impact of ineffective resource management when ordering new stock or considering a shift in suppliers. Ideally, EMSs should gather data from all business stakeholders, so management can see the impact that their partnerships and supply chains have on the environment.
Conclusion
Effective resource management streamlines business operations by accounting for a business’s physical and digital assets during the decision-making process. Key changes to resource allocation can reduce waste and free up time for other sustainability-oriented activities like EMS auditing and data personalization schemes. These changes strengthen a business’s brand and bolster its bottom line.
