Written by on Tuesday March 29th 2011 in What We're Thinking

Can you reduce costs and go green with simulation?

Student Jen Morgan wrote yesterday about the waste issue creating debate in the UK. However the green issue is gathering interest worldwide from both an environmental perspective and also a financial one.

Reducing costs is considered vital just now to ensure economic growth for the long term, but does that mean environmental issues should take a back seat?

Stephen Goldsmith, Deputy Mayor of Operations in the City of New York recently posted on Governing.com that “Green is not free, however we have to make public decisions with an eye towards how to accomplish our environmental goals in a way that does not threaten our essential services.”

He was discussing the fact that decisions need to be made holistically, as looking at factors in isolation can lead to poor decisions, but considering all the factors together allows the costs and benefits of a decision to be weighed up.

Simulation can help

This is exactly what simulation is made for, looking at the whole process and taking into consideration all the relevant factors, such as costs, resources available and carbon emissions.

Once you have all this information in a simulation you are then able to try out different scenarios or policy options.

The simulation will give you detailed results and a decision can be made that is beneficial both environmentally and in terms of cost efficiency. You can even see the impact of the decision whether you are expecting the outcome in a week or 50 years time.

So this got me thinking… can you reduce costs and go green?

CPA’s had estimated that by reducing carbon footprints of an organization there would be an average 20% internal saving rate, however after implementation the average amount saved was 48%. Showing that reducing carbon emissions can reduce costs.

Is it more than saving money?

As well as the ability of cost saving through “going green” there are also softer benefits too, such as being a market differentiator for your organization, increasing employee satisfaction, increased sales, and helping with compliance.

As laws are passed on carbon emissions and Social accounting, and Corporate Social Responsibility (CSR) Reporting becomes more prevalent, organizations who understand the new triple bottom line are set to take advantage of these softer benefits.

What about Stakeholders?

A recent survey showed however that only 7% of the public believe company claims of action on climate change.

This is another area where simulation can help – engaging stakeholders.

Simulation is visual and animated meaning that stakeholders will be able to follow the process and see the results on screen. This allows them to understand why decisions have been taken and the benefits that these will have. Why not share your simulation online and everyone can see the changes you have made?

The ability for stakeholders to understand your process allows your organization to be accountable to them and gain their trust.

For over a decade now the green issue has been causing much debate and it is still gathering momentum.

Is it possible that simulation can help in this decision making process?