Sustainable environmental management can lead to negative as well as positive financial outcomes

What is the impact on financial outcomes of an organisation if the organisation is focused on sustaining their environment?

There may-be negative financial outcomes. Examples of negative outcomes form expenditure that supports a sustainable environment include:

• Possible decreases in short term and long term profits

• Financial goals not being achieved and being in conflict with community/environmental


• Expenditure passed onto customers through increased prices leading to loss of custom

• Shareholders being unhappy with returns and the fall in share price as they sell out

• Reallocation of resources that may have been given to community organisations to reducing environmental impacts.

However there are many positive financial outcomes that follow for expenditure supporting sustainable environment. Examples of positive outcomes from expenditure that supports environmental sustainability include:

• Expenditure on sustaining the environment may lead to an enhanced reputation and goodwill for the organisation which in turn may lead to new contact and contracts

• Greater job satisfaction for employees in being involved with an organisation that values a sustainable environment that is reflected in a greater commitment and effort for the organisation.

• Avoidance of the implications of government regulation and related financial penalties through compliance

• Possible enhanced long-term business survival of an organisation

• Increased long-term profitability through achievement of waste reduction targets and

reductions of inputs

• Gaining and keeping customers who might be attracted to the organisation because of the organisation’s concern for the environment resulting in increased sales

• Support by investors of organisations that are environmentally responsible