Ethical Profit: A Guide to Increasing Profit Using Sustainable Business Practices

By Samantha Richardson

How do you sort through the myriad of "green" advice available to find what works for you and your business? So many small businesses are paralyzed, without guidance on what to do, how decisions impact the environment, and where to even start. In Ethical Profit, Samantha Richardson has done the work for you. Outlining changes

• Language: English
• Publisher: Ethical Profit Agency
• Release date: Jan 11, 2020
• ISBN: 9781999149611

Samantha Richardson

An accountant. A farm girl. An environmental professional. Samantha Richardson has melded her passion, personal life, and profession to become an expert in environmental finance. Her second book, Ethical Profit, is the manifestation of her expertise. After graduating from Queensland University of Technology with a Bachelor of Business, she followed family tradition and became a third generation accountant. She has worked in accounting for over 15 years across three continents. Her desire to have a greater impact on people and small businesses led her to open a small accounting office where she became the second accountant in Canada to be a certified B Corporation. Outside of accounting, Richardson is passionate about caring for the environment. She strives to reduce her carbon footprint through cycling, avoiding single-use plastics, and offering consulting to other small businesses on how to live and operate more sustainably.

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ETHICAL PROFIT

A Guide to Increasing Profit Using Sustainable Business Practices

Samantha Richardson

Copyright © 2020 Samantha Richardson

All rights reserved. No part of this book may be reproduced or used in any manner without written permission of the copyright owner except for use of quotations in a book review.

First paperback edition January 2020

Book design by Andrea MacLeod

ISBN 978-1-9991496-0-4 (paperback)

ISBN 978-1-9991496-1-1 (ebook)

Published by Writing Pixels Publishing

www.ethicalprofitbook.com

Thank you, Jenny, for giving me the push to finally put these ideas into words.

My dearest gratitude to Aleks, who supported me in so many ways that got me across the finish line.

CONTENTS

CONTENTS

Acknowledgments

The Urgency for Change

SECTION I

The Current State of Affairs. How Did We Get Here?

The First Step: Myth Busting

What is Sustainability?

The Case for Making Your Business Sustainable

Above and Beyond the Physical Environment

SECTION II

But What Can I Do? The Chapter of Hope

Environmental Business Successes

By the Numbers

Collaborating with Stakeholders

Efficiency and the True Cost of Waste

SECTION III

Carbon Footprints and Environmental Audits

Where Do You Invest Your Money?

How Technology Can Help Your Company Be More Green and Efficient

Bigger Steps

The Conclusion, but Not the End

Checklists

Resources

Bibliography

About the Author

Acknowledgments

I must, first and foremost, thank the B Corporation community for all their support and time, generously given to help me write this book. Your leadership is admirable and necessary, and I am honoured to share your stories with the world.

The greatest thanks goes to those I interviewed, and who kindly shared their experiences, business processes, and wisdom, in order to help inspire other businesses to create a more sustainable world together. Bruce Taylor, Tobias Mueller-Glodde, Bettina Hoar, Flip Brown, Rose Yee, Timothy Yee, Rob Thomas, Mike Gifford, Carly Stein, and all the folks in the B Corp community who took the time to share their knowledge. Thank you. Your selflessness is inspiring.

There are many others who have helped me in small ways, from challenging my thinking, like my long-time friend Kate Bullemor, to those who shared their eco-friendly tips in passing, like Carl Friesen.

I am especially grateful to Krista Downey for designing my cover, as well as David Drascic, John Schrag, Stephanie Belau, Amanda Wondergem, Andrew Cheng and many others who provided great feedback that led to a cover design that I love and am proud of. Thanks for humouring me!

Particular thanks needs to be given to Andrea MacLeod, who did such a fantastic job designing my layout and assisting in more behind-the-scenes logistics than I ever thought possible. Publishing this book without your support would have been impossible.

This book would never have been written without the magnificent coaching of Jenny McKaig, who gently, but firmly, nudged me to write this book, which I’ve been holding onto for over ten years now.

Thank you to my editor, Mary-Margaret Scrimger, for your excellent work and for turning a pile of garbage into a readable, comprehensible book.

Special thanks to Heather Gamble for her advice over the years and sharing her wisdom, providing me with answers to problems like a fairy godmother.

There are others who have contributed through sharing research, such as Yvonne Lin, Panos Panagiotakopoulos, and Michael Smith, which helped in building a book built on facts.

To my partner, Aleks, who spent many days and nights picking up the domestic slack so that I could write. She also did the sexy job of checking my math, which is a pretty critical job for a book about finance but something no one wants to do for fun.

As is with most of these things, there will be others I have forgotten to thank, for which I ask your forgiveness. In the five years I’ve spent writing this book, I have learnt so much from my peers, colleagues, friends and passersby that have helped shape this book. I am grateful to everyone who has encouraged me along the way.

Introduction

The Urgency for Change

Bees. They are the perfect example. A species integral to the ecological health of the world that are on the brink of extinction because businesses prioritize making a profit. This is just one case of unethical decisions putting the environment at risk. In the U.S. alone, climate change disasters have already cost $1.7 trillion, according to NOAA. This number steadily increases every year we procrastinate in solving the climate crisis. According to a recent paper published in the Proceedings of the National Academy of Sciences , the cost of climate change increases exponentially. This doesn’t include the cost to the rest of the world and I personally think it’s a conservative and limited estimate. How do you put a dollar value on the extinction of an entire species? We don’t even truly understand how the inter-dependencies of our ecology work, so to base the value of bees purely on the benefit to the agriculture industry underestimates the importance of bees to the rest of society.

There is little need to make the business case for running environmentally and socially responsible companies. The economic devastation that climate change will have on the global economy is undeniable. Consider the human, labour, and resource costs of climate change refugees. These are entire populations displaced because their homelands have been washed away in floods. Or engulfed in forest fires. Or destroyed by hurricanes or tornadoes. The ripple effects of drought, famine, floods, fire, and other natural disasters have had a far-reaching impact in many countries already. For some, it has led to civil wars, while others have gone bankrupt. The devastating destruction to those who pick up the pieces after a disaster is a huge cost to bear individually, as well as by society, if aid is offered.

These are some highlights of living in a society that has abandoned environmental and social responsibility. One of the biggest issues with conventional business models is the hidden costs that are not factored into a product or business but society pays for through other avenues. Either by declining health paired with rising health care costs, taxpayer-funded pollution clean-up, allocation of human and natural resources—the list goes on and on. These costs must be included in business planning moving forward if we intend to build a better future not just for our kids but for our species.

Even if following this guide seems like a lot, I invite you to look through it and find one thing you can immediately implement into your business. The journey of becoming more environmentally-friendly begins with a single action. If all entrepreneurs did one thing, we would collectively make an exponential impact. There are more entrepreneurs than ever and it’s important to start with the right base, so that as you grow you can save money (yes, environmental choices can save you money) while feeding your soul, knowing you’re making the best decision for your work and your world.

Small businesses and entrepreneurs make up 98%+ (BDC) of the economy and taxpayer dollars. Never forget how powerful you are. Everything you do, every change you make, has a ripple effect you cannot begin to imagine.

So let’s embark on this journey to creating a better world with a new and sustainable economy.

SECTION I

WHY YOU SHOULD CARE

Everyone is in different stages of their sustainability journey, and I want to honour that and help you along the way. This section is for folks who are new to sustainability or want more background information into what sustainability actually means for your business.

Sustainability is multi-faceted, a term used to encompass the many aspects that are involved in making a business profitable long-term. Sustainability in business includes everything from strong sales to ensure your business is viable year-on-year to managing your people well so you have employees to keep the doors open. These next chapters are for those who wish to learn how to view their business finances from a more holistic perspective, and why it is important to do so.

If you already have some background knowledge on sustainable business practices, or have already seen the benefits of implementing sustainable business practices and want some more ideas for next steps you can take, feel free to skip to Sections II or III. Section II dives into more of the nitty-gritty on how to be sustainable and start saving money in a shorter time frame. These are recommendations that apply to a variety of industries and business stages, so you can take something away and run with it immediately.

Section III goes further with technical and financial recommendations, such as why you should move to a credit union and how to have a massive impact by moving your retirement funds into ethical investments. These recommendations are for those who are willing to push through the mental blocks we create around perceived financial difficulties, but have a tangible long-term benefit to moving to a sustainable economy.

One

The Current State of Affairs. How Did We Get Here?

Our society is built on capitalism that, as said previously, doesn’t calculate the full cost of doing business. Industries are built entirely on hidden costs that are not factored into the final price of an item. For example, consider a cheap plastic item you can buy from a dollar store, like disposable forks or straws. What does that cost actually pay for?

If you consider how that plastic disposable item got to the store, and what will happen with it afterwards, that $1 to $2 has to cover a lot. Raw oil had to be extracted from a mine, shipped to a refinery, processed, shipped to a factory to be processed further into the plastic item, which is then packaged and shipped to the distribution centre before being shipped to the store where you bought it. Once you are done with it, a city garbage truck needs to drive to your house to collect it and then drive it to the recycling facility, if one exists in your area, or to the local landfill.

This product is one piece in a larger picture, but almost all of our material products are created in this way. But does it account for the destruction inflicted on the environment by the mine cutting down trees and digging up the earth to extract the oil? If there were any oil spills or accidents, have those costs been accounted for? What about the fuel to transport the raw materials between the mine and the refinery and then on to the distribution centre and retail stores? Then there is the energy used in the process of refining it, and the machine’s energy to create the plastic and cut it into each disposable item. Not to mention the cost of disposing the item, paid for by taxpayers to the local government. There are also workers to consider in each step of this process, from the mines to the factories to the disposal, and the potential harm to their health due to being exposed to pollution over time, health care costs that are subsidized by taxpayers.

When each piece of a product’s lifecycle is considered, from resource extraction to the landfill or recycling, everything we buy should cost a lot more than it does now, once everything is accounted for. Except a business doesn’t have to pay the earth for cutting down a tree or a rain cloud for providing the water harvested. If it did, the Industrial Revolution may have developed quite differently.

Fossil fuels enabled this capitalistic economy to grow exponentially, but without truly incorporating the real environmental cost, including the impact on vulnerable communities. Western countries have amassed greater wealth than at any time in history; greatly improved human lives according to all metrics from life expectancy to health care access; invented many things to make our lives more convenient; created technology that allows us to buy almost anything online and have it delivered to our door. But at what cost? To paraphrase the state of affairs, Paul Hawken said, Our economy by and large operates by stealing the future, selling it in the present, and calling it GDP.

Anti-environment companies are at a tough stage, barely in compliance with current environmental statutes or complaining vehemently about the cost compliance laws have on their business. It’s an unfortunate attitude because these laws exist for a reason. History shows us that, time and time again, unless there are regulations requiring businesses to act in accordance with the greater good, human greed will override common sense. For example, business greed is the reason we need anti-corruption and insider trading laws, because at one point someone abused the power of their position to subvert the system and get rich at the expense of others. This is also the case for things like health and safety, labour laws, environmental protection, consumer protection, taxation, etc.

The above-mentioned businesses are modelled on the past and are not building to serve the future. They are operating businesses that can barely keep up with the present. Those who are ready to do what is necessary right now—build a business in tandem with society and our environment—are at the base necessity of business. In order to future-proof one’s business, avoiding going the way of BlockBuster Video, we have to build environmental costs into our business while remaining profitable.

William McDonough and Michael Braungart accurately summed up our production outlook in their book, Cradle to Cradle.

Society has designed business production that:

•  Puts billions of toxic material into the air, water, and soil every year

•  Produces some materials so dangerous they will require constant vigilance by future generations

•  Results in gigantic amounts of waste

•  Puts valuable materials in holes all over the planet where they can never be retrieved

•  Requires thousands of complex regulations, not to keep people and natural systems safe, but rather to keep them from being poisoned too quickly

•  Measures productivity by how few people it takes to accomplish a task, essentially efficiency

•  Creates prosperity by digging up or cutting down natural resources and then burying or burning them

•  Erodes the diversity of species and cultural practices

Of course, the industrialists, engineers, inventors, and other minds behind the Industrial Revolution never intended such consequences. In fact, the Industrial Revolution as a whole wasn’t designed. It took shape gradually, as problems were identified and solutions were implemented to take advantage of opportunities in an unprecedented period of massive and rapid change (McDonough & Braungart, pg. 18).

So, how did we get here?

A major contributor to the advancement of business and industry during the Industrial Revolution was coal. It replaced wood as an energy source, which enabled machines to produce more goods at a cheaper cost. This helped accelerate economic growth and continued in a positive feedback loop that saw advances and inventions towards our current global economy. Up until that point, there had not been such explosive population and economic growth. As businesses grew, however, the need for regulation also increased, resulting in unions who advocated for weekends, sick leave, vacations, and many of our current labour laws that are taken for granted.

Over time, governments began to introduce laws and taxes to either encourage or discourage certain business activities. Business laws were created to protect company founders as the ones taking a risk on a new venture. In North America in particular, business laws encouraged entrepreneurship and the investment in such businesses. The invention of the stock market allowed for other owners to make a profit from investing