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Is Going Green Good for Business?

Going green used to be regarded with a mixture of scepticism and cynicism: being eco-friendly cost too much, didn’t offer enough of a return on the initial investment and wasn’t really going to save the planet, even if it did keep the hippies and tree-huggers happy.

Today sustainability is something we are all familiar with and the benefits are far more tangible. Thanks to a raft of government grants and loans, investing in green energy and technology is more achievable, the cost savings speak for themselves and it presents another marketing opportunity as consumers become more sustainability-savvy themselves.

TRIP Advisor’s 2013 TRIPBarometer survey revealed that 79% of travellers place importance on properties implementing eco-friendly practices – so you definitely do not want to get left behind.

Andrea Nicholas, Managing Director of Green Tourism, believes the case for eco-friendly hotels 
is compelling. She explains, “Being a sustainable business is no longer a ‘nice-to-have’ but increasingly an essential brand value for the hospitality industry – reduced energy costs, improved customer proposition and playing a part in protecting the planet all create a compelling case for an environmentally friendly approach to business.”

Andrea says the first thing to do is set up a baseline to establish where your business is in terms of resource efficiency (electricity, gas and water) and waste management so that you can prioritise what to tackle first.

Key areas to look at include energy consumption, recycling and food waste, although relatively simple changes like replacing high energy bulbs with LED alternatives could save you up to 90% on energy bills and bulb costs.

Jonathan Reeves, Operations Director of utilities management company eyebright, says green energy is cheaper than people might think. He explains, “Embracing the opportunity to support green energy is something all business should strongly consider. Making your next energy contract a “green” one may not be as expensive as you think.

The margin between brown energy and green energy has reduced significantly in the last 12 months to a point where the difference is only around 0.2 pence per kWh on average and if you also factor in that you can remove the Climate Change Levy from you bill surely that is a small price to pay to be able to proudly state you are a green energy user?

“Installing a smart meter and working with experts who can help you identify where and when you are wasting energy can save you a lot of money and put your conscience at ease.”

Managing Director Jamie Newall adds, “Hotels, particularly those that are in rural locations and lack mains gas supply can often benefit from looking at scope to generate their own energy. Traditionally people thought mainly of solar, wind and hydro; but there are an array of green technologies now including biomass, Combined Heat & Power (CHP) and heat pumps. There will be increased scope for hotels to go off grid in the next decade.”

Resource Efficient Scotland has helped hotels including Turnberry Resort in Ayrshire, the West Highland Hotel in Mallaig and Fairmont St Andrews, in Fife, boost their market competitiveness and profits by using less energy, water and raw materials. The organisation offers free support and unsecured, interest free loans of up to £100,000 to implement changes – repayable against cost savings.

At Turnberry, the greatest energy saving so far has been achieved by installing high efficiency light emitting diode (LED) lighting across around 70% of the resort’s total lighting. Through this upgrade, the resort is saving £12,000 a year, expected to rise to £17,000 when the work is completed.

Meanwhile the West Highland Hotel is saving almost £20,000 a year on its energy bills after installing a new biomass fuelled boiler and additional plans to replace the existing electric heating in the bedrooms with a wet heating system could see these savings double to nearly £40,000.

At Fairmont St Andrews effective waste and energy management has saved £209,000 over a four-year period. The hotel has also increased food recycling and has an on-site green house and vegetable garden.

LED lighting has been fitted in all public areas and rooms and in January the resort joined the Clean the World hospitality initiative, whereby its soaps and discarded hygiene products will be recycled for humanitarian organisations around the world.

Waste reduction charity WRAP estimates that food waste still costs the hospitality industry £2.5billion a year. They calculate that 45% of food wastage happens during food preparation, with a further 21% coming from spoilage – but a whopping 34% is food left on diners’ plates – with the main reason cited for this is that portion sizes are too big.

When Crieff Hydro, in Perthshire, signed up to the Hospitality and Food Service Agreement (HaFSA), a voluntary pledge initiated by WRAP, it sparked a major change in their approach to food waste – and has the added benefit of yielding major savings too.

Alexandra MacDonald, the hotel’s support services and environmental manager, began by carrying out an eight-week waste monitoring audit to see exactly how much food was being thrown away.

The results were staggering – the Meikle restaurant was wasting around 70 loaves of bread every week and when left-over jam was factored in too it meant that they were literally throwing away around £7,000 a year.

Alexandra explains, “When we started to really look at the amount of food waste we began to get an insight into just how much money we were effectively putting in the bin on a daily basis. We implemented small changes, like changing the size of the food containers at breakfast and focusing on small batch preparation, which, when combined with a change in the way we measure waste, made a huge impact.”

By installing a toaster on the buffet bar so that guests decide their portion size, using smaller bloomer loaves and swapping jam pots for slightly smaller containers, they have been able to make significant savings. Since the pilot, the hotel has made annual savings of almost £52,000, which rises to £75,000 when waste disposal, labour and procurement costs are also taken into account.

Alexandra adds, “Looking at ways that we can operate more efficiently does have its benefits for the business but at Crieff Hydro it’s more than just how it impacts the bottom line. We’re located in the heart of the countryside and we want to protect that as much as possible. Our ‘green culture’ is one that has been adopted not just by the kitchen staff, but by departments across the resort. Even our guests are encouraged to play their part by donating £1 from their stay to our visitor payback scheme.”

The remote Glenuig Inn, on the Sound of Arisaig, has been a 100% renewable energy business with 
zero carbon emissions since 2015 and energy costs have been reduced from 11% of turnover to just 2.25%.

It has held Gold Status from the Green Tourism Business Scheme since 2011 and Director Steve Macfarlane has won a string of awards – including a VIBES Micro Business Award last year – for its exemplary record on environmental sustainability.

The building itself has been renovated and upgraded to make it highly energy efficient, with
passive venting to maximise heat transfer, green 
electricity from local hydro schemes, and a biomass 
boiler which provides all the heat and water. Food waste has been reduced by changing the menu and supply chain management – but when it does occur it is dried and sterilised then mixed in with the wood pellet biomass in the boiler – and packaging waste has been reduced too.

Steve explains, “The main driver is bottom line pure and simple – it just makes good financial sense. My business is far more profitable as a result of what we have done, so it’s a very simple calculation.

Green hotels

“I saw the economic argument and I saw the environmental argument and that I could make them both work to my advantage.

“It’s not just about physical changes to the building, it’s not just about the technology we deploy it’s also about changing our working practices, how we do things and engaging staff and customers.

“Yes, there is a capital requirement and there is a small premium on the investment but the returns are significant if you get it right and if you look at whole system-wide application of it, not just single technology. Taking a holistic approach is what drives the savings.”

Janie Neumann, VisitScotland’s Industry Development Manager for Sustainability, agrees that the bottom 
line is often a key factor when it comes to going green. She explains, “Hotels usually have quite significant costs as far as energy, water and waste goes, so initially one of the main motivations to look at sustainability is resource efficiency and potential cost savings, which often go straight to the bottom line.”

Kay Smith, Facilities Manager at Lisini Pub Co, believes it is crucial to get staff on board. The firm set up ‘Green Teams’ at each of their four venues who compete to see who can save the most energy and recycle the most. Kay says, “The first year we did it, the three bigger venues saved enough energy to power our smallest venue for a year. That really helped staff to grasp what a difference they were making.”

Going green is no longer a whim or a luxury; sustainability makes sense financially as well as being good for the planet. Given the raft of financial support and expert help on offer, can anyone afford not to get on board?

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