As the risks of climate change become more intense and prevalent in today’s world, businesses are feeling the pressure to adapt and rethink their business models, making sure they align with the needs of clients, employees, as well as the environment.
The Main Advantages of a Green Office
Why should you invest in a greener business? Well, the benefits to implementing more sustainable practices are numerous. For instance, you will be cutting down on a ton of unnecessary costs around the office, as sustainability is aimed at energy optimisation and a conscious use of natural resources. In other words, you will be saving a substantial amount on your water and electricity bills.
Furthermore, creating a greener workplace will also boost your employee performance as working in a pleasant environment is often associated with better concentration and higher performance, leading to successful results, and an increase in profits. In addition, you can be sure that opting for an eco-friendly business model will also improve your corporate image and expand your client base, considering more and more people are becoming aware of the importance of addressing sustainability and care for the environment.
If the above-mentioned benefits aren’t convincing enough, the possibility of obtaining tax deductions will certainly boost the business case for the deployment of sustainable business practices.
What can you do to help your business become more sustainable?
Establish a green team: Identify a few individuals from your workforce who are willing to form part of a sustainability committee and who will take responsibility for implementing eco-friendly initiatives at the office. The committee can encourage their colleagues to adapt their behaviours and adopt new, eco-sustainable habits.
Choose to reuse: We all know recycling is a great practice, but even recycling waste has to be kept somewhere. So, ask your staff to bring their own reusable water bottles and coffee mugs, which they can reuse and wash every day. Investing in reusable silverware and cutlery is another way to reduce plastic and paper waste in the workplace.
Add some green to your view: Decorating the office with plants is not only aesthetically pleasing, but it also improves the air quality, which helps people think more clearly and boosts productivity. In addition, adding a touch of green to your office setup reduces your employees’ stress levels, and ultimately creates a more comfortable and pleasant work environment.
Support local: Sourcing your business’ goods and products from local vendors is a formidable way to help the environment and improve client and consumer satisfaction, as people often prefer knowing where their products are coming from and the idea of supporting small businesses. Not to mention, it’s quite a savvy financial incentive. When you choose to buy from local businesses, you are reducing miles – consequently cutting down on shipping costs and reducing harmful carbon emissions.
Cut down on car journeys: As we all know, choosing to use public transport or making use of lift clubs can also help reduce emissions and pollution. Your sustainable committee can encourage employees to use greener forms of transportation, including riding a bicycle or walking to the office if they are fortunate enough to have their workplace close to home. Aside from making a positive impact on the environment, employees will also be shedding calories and improving their health and overall wellbeing. Business leaders can also consider limiting in-person meetings and enabling staff to work from home when appropriate.
Choose alternative energy sources: Tired of load-shedding? Well, then it might be time to go solar. If you choose to switch to renewable energy sources, your business won’t have to rely on Eskom’s erratic power supply, and you will reduce overhead costs – all while doing your part in the fight against climate change.
Tax Incentives for Saving Energy
Over the last few years, a multitude of fiscal measures have been put in place to encourage businesses to switch to green energy. One of these measures has been the implementation of financial incentives. As mentioned earlier, these incentives are one of the main advantages of developing a greener business.
In South Africa, the government has been using section 12B of the Income Tax Act (the ‘Act’) to support the deployment of energy-efficient technologies and practices – by businesses, in particular. The Act initially provided for a three-year (50/30/20) accelerated depreciation allowance in respect of movable assets owned by the taxpayer. From 1 January 2016, the Act was amended to make provision for the depreciation of the full cost of a grid-tied solar PV system smaller than 1MW in the year of its commissioning .
This means that a grid-tied PV system smaller than 1MW can effectively be purchased by a company (if paid in full) at a discount equal to the company tax rate since there is a 100% tax-deductible depreciation allowance on that purchase. For those purchasing larger systems, the standard depreciation allowance in the year of commissioning (equal to 50%) still applies.
If you are looking to invest in renewable energy to reduce your business’s environmental impact on the planet, improve your green corporate image, or simply want to save money in the long run and want to know more about depreciation allowances – contact your tax adviser for detailed information.
This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)