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Show Me the Money Demonstrating Green Business Value to Skeptics
P.J. Simmons M.R. Rangaswami
November 2009
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• Decision makers want hard, dollars-and-cents justi6ications, whether for existing programs or proposed new spending.
The Need
• Executives face more pressure than ever to sharpen the business cases for eco-‐related initiatives.
“I’ve been looking over your ‘green’ proposal. It’s 7ine, just 7ine—I’m sure it’ll make people feel real good about the company … Should go over big with the tree huggers too … But see, the folks that I report to—they don’t eat granola. So let me ask you: Why would I sign this?”
– Skeptical executive in 2009 IBM TV commercial
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• Prepared to help both 6inancial and non-6inancial executives who seek a comprehensive overview of key concepts and best-‐available tools
Purpose of Show Me the Money
• Recommends best practices and tools to help your organization assess the value of eco-‐related costs and beneLits when making decisions about:
Budget allocations Capital investments
Changes in product or process design Eco-‐efLiciency initiatives
Investments in new product lines Green purchasing or supply chain initiatives
Employee engagement initiatives Any other efforts where eco-‐factors are signiLicant
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Topics Covered
• Overcoming shortcomings in traditional accounting and Linancial analysis
• Linking green factors to cost and sales drivers
• Translating eco-‐related factors into dollars and cents
• Using non-‐Linancial techniques to quantify costs & beneLits
• ROI success stories
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Excerpt – Navigating the Confusion
With the emergence of environmental accounting has come a Llood of confusing terms that have stiLled the exchange of best practices and lessons learned. This chart is designed to help you navigate the confusion and communicate effectively with others.
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Excerpt – Building Your Case
A strong business case rests on sound logic and assumptions. Consider how your proposed effort(s) could generate business value. Then generate testable propositions to validate through a combination quantitative and qualitative means.
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Excerpt –Recommended Tools
No one-‐size-‐Lits-‐all method works for translating eco-‐related costs and beneLits into dollars and cents. Show Me the Money provides an annotated guide to recommended resources and tools that will help you de-‐velop a plan tailored to your particular needs.
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Excerpt – Success Stories
Pointing to examples of how other companies have already generated bottom-‐line beneLits from doing what you propose can strengthen your case. Here are some examples:
