Organizations, large and small, are prioritizing sustainability, which has led to changes in almost every aspect of a business’s operations, including expense management. Thus, we intend to focus on recent innovations that have enabled effective green expense initiatives, allowing companies to focus on their environmental responsibility and encourage employees to take the greener route.
These innovations can range from simple measures such as using digital receipts and paperless reporting to providing online platforms that assist employees in choosing the most eco-friendly travel and accommodation options.
So, let’s take a look at what it takes for businesses to transform their expense management processes to boost sustainability and employee satisfaction at the same time.
What Are Green Expense Initiatives?
The global environment is at the forefront of modern business thinking, as all types of organizations look to play their part in preventing climate change while building a positive, environmentally friendly brand. This includes incorporating a range of eco-friendly practices that can reduce the carbon footprint of the company and its employees.
One such practice that is currently receiving a lot of focus is green expense initiatives. Green expense management processes can have a significant environmental impact on a business while also helping to reduce costs in many cases.
Aside from the environmental impact, other key benefits of green expense initiatives include:
- Potential cost savings—Businesses could benefit from potential cost savings by adopting green expense initiatives. This can be achieved by creating a less wasteful employee culture and encouraging employees to make smarter purchasing decisions. After all, decision-makers must also ensure business sustainability and protect the environment.
- Improved employee engagement—In the current business climate, employee satisfaction is critical, as job opportunities have never been more abundant, with the possibility of working remotely for international companies. Likewise, this increased engagement is key in gathering feedback on how expense initiatives can be improved and helps to show employees that their opinions are valued.
- An improved corporate image–Many consumers favour businesses and brands with a positive, environmentally friendly, and socially conscious image. This means businesses must work even harder to promote their core values and convince customers that they have the best interests of their clients, employees, and the environment at heart.
Navigating the Environmental, Social, and Governance (ESG) sector is an obvious challenge, both practically and financially. Funding now has many caveats that require sustainability goals to be met.
As the issuance of sustainability-linked loans has already dropped by 80%, there’s no telling how things will evolve going forward. Having access to such loans is certainly a plus — but even with that taken out of the picture, the efficiency gains, PR wins, and reduced expenses are reasons enough to focus on sustainability.
Some Effective Ways to Implement Sustainable Practices in Expense Management
There are many unique and innovative strategies organizations can consider to help revolutionize their expense processes and reduce the environmental impact of their operations. In this section, we will focus on six processes that can contribute to a wider expense management strategy that can have a significant impact for years to come.
Digitize Processes
A simple but effective method for greener expense management is to go completely paperless. This can mean using dedicated online expense software to allow employees to easily submit expenses or integrating other platforms with digital signatures for better contract storage and management.
Not only can automating things like receipt management save time, but it will also have a negligible effect on the environment. While going paperless is enough, some companies are even more stringent, refusing to rely on anything except entirely green, environmentally conscious hosting solutions.
Amend Expense Policies
Setting new expense policies can help guide employees in making more sustainable choices. With clear expense guidelines and rules on what expenses can be reimbursed, spending limits, and how expense reports should be submitted, employees are likely to give more thought to how they can spend their monthly or daily allowance.
Likewise, you can include more stuff for free, especially essentials such as travel stipends and reimbursements or lunches. In such cases, your expenses will not only be lower, but each dollar spent will be more environmentally impactful.
Expense Analytics
Even though going paperless and relinquishing unnecessary expenses is enough in some cases, that’s still not addressing the root of the issue. That’s where expense analytics step in—with advanced, usually AI-aided tracking of expenditures, you can gain an instant, easily digestible overview of what can be improved upon.
For instance, if your analytics dashboard highlights a steady increase in travel expenses to conferences, but the ROI is stagnating, maybe that’s a sign to reconsider that particular approach.
Choosing Greener Vendors and Products
Last but not least, we have a green expense initiative that arguably requires the most effort, preparation, and dedication. Whether it’s integrating expense management software, adding custom solutions to the mix, or renting server time, you are financing someone. That’s where your level of greenness is truly measured.
A company can invest all its funds into going fully sustainable, but what’s the point if they’re renting servers in a coal-powered data centre? It might seem distant, but it’s still releasing dozens of cubic feet of carbon dioxide into the atmosphere.
Likewise, having a close business relationship with vendors who don’t care about the environment can also be damaging to the company’s bottom line.
If you preach sustainability and go paperless on the one hand but work with obviously careless companies on the other, why would anyone take you seriously?
Conclusion
Green initiatives such as sustainable and environmentally friendly expense management are essential for promoting a better corporate image and reducing unnecessary costs. Consumers will also actively seek out businesses that are conscious of the environment and committed to lowering their carbon footprint.
And through the application of tried, tested and appropriate initiatives, businesses will not only operate with a clean consciousness but also learn how to monetize said sustainable approach.
