Eyeing Sustainability: Companies weigh benefits and costs to make environmentally friendly investments

When it comes to environmental, social and governance practices, leadership at Monett-based financial software company Jack Henry & Associates Inc. (Nasdaq: JKHY) say the company’s focus on sustainability has been a key piece at the firm for over a decade.

Board chair and CEO David Foss says the company has increased its efforts in the area over the past five years.

“Much of that is, A, it’s the right thing to do. But B, as a large public company, there is more focus and more scrutiny on what we are doing, what are we seeing and are we really living up to the expectations that we’ve set as far as being a good member of our communities, including southwest Missouri,” he says.

Jack Henry’s sustainability efforts are part of the focus of some businesses seeking to protect the environment, while also attracting customers and employees – all while reflecting upon the costs of pursuing such goals. But it’s a quality of place consideration that not all companies seem interested to pursue.

When asked about objectives motivating their company’s corporate responsibility, only 9% of respondents of Springfield Business Journal’s 2023 Economic Growth Survey replied that making business practices more environmentally sustainable was their top goal. Even fewer, 3%, replied their top goal was investing in renewable energy. Nearly 61% say renewable energy investments are not a goal at all, while 44% note the same answer for investing in more environmentally sustainable business practices.

Still, a 2021 Gallup survey reported that about seven in 10 U.S. workers say a company’s environmental record matters to some degree when considering taking a job with it. It includes 24% who say that it is a “major factor” and 45% who believe a company’s environmental record is a “minor factor” in their decision. Only 30% do not consider it to be a factor.

Foss says Jack Henry’s sustainability commitment is an employee attractor, particularly for younger generations. The company employs roughly 7,100, including nearly 2,400 locally.

“When you get into millennials and Gen Z, that is top of mind for a lot of employees,” he says. “They’re very sensitive to the idea that we are a community that is taking care of each other. Are you doing the right things to take care of the environment and the planet? It’s the bigger topic with younger generations.”

The company’s efforts have garnered national attention. Jack Henry was recognized earlier this year by USA Today on an inaugural list of America’s Climate Leaders, a data-driven recognition of companies that cut their carbon footprints in recent years. Market research firm Statista developed the list, which comprised 400 U.S.-based companies with revenue exceeding $50 million in 2021. Jack Henry reduced its core emissions by 9.7% in 2021 from 2019, making it one of only six Missouri companies on the list.

An extra step
As a serial entrepreneur with multiple businesses on Commercial Street, Joe Gidman says his interest in sustainability has extended beyond the decade since he opened his first venture, Peruvian restaurant Cafe Cusco LLC.

Gidman, who also owns Dutch-style restaurant Van Gogh’s Eeterie and retail shop Chabom Tea & Spices, says the to-go products for his two eateries are compostable, as are the drinking straws. The businesses also work with nonprofit Springfield Compost Collective, which collects its kitchen scraps.

“When we’re cracking eggs or cutting vegetables and things like that, it all goes into compost bins and Compost Collective comes and picks them up,” Gidman says, adding he’s used the company for both of his restaurants since the nonprofit started around five years ago.

Springfield Compost Collective serves residential and commercial clients in the Springfield area, as well as parts of Nixa and Ozark, according to its website. Residential rates are $25 per month, while monthly costs for businesses start at $50.

“It allows us to have less trash pickups, so it pays for itself in that sense,” he says. “You’re not filling it up as much so it can become compost.”

The businesses also have recycled cardboard for about six years, Gidman says. He even participated in efforts to get more recycling bins added to Commercial Street.

“There’s big cardboard recycling units in different parts of the district now,” he says, adding the sustainability efforts are appreciated by employees, even though he doesn’t think they work for his companies specifically because of them.

While the usage of LED lightbulbs was another energy-efficient expense for his businesses, Gidman says investments like those are more money-saving decisions. LEDs use around 90% less energy and last up to 25 times longer than traditional incandescent bulbs, according to the U.S. Department of Energy.

“I definitely am a nature person and I definitely care about the environment. Of course, in a business, everything has to make business sense too. You have to weigh all that,” he says. “The reality is that the composting is a win-win. If we can lower the trash pickups and do something better for the environment ... you might as well do that extra step.”

Missouri’s recycling rate for the most commonly used containers and packaging materials is 46%, according to a 2021 study from international environment consultancy Eunomia. That puts the Show Me State at No. 15 when compared with states nationwide. When excluding cardboard, the state dipped to No. 22 with a 30% recycling rate.

Reducing the load
Officials at City Utilities of Springfield say the company is committed to reducing its carbon dioxide emissions by 70% by 2035 from 2005 baseline levels. It also is pursuing a net-zero carbon emissions goal by 2050, according to past SBJ reporting.

“In a nutshell, if we’re going to get to net zero, we have to look at retirement of our baseload thermal units and replacing those with renewable resources,” says Warren Brooks, vice president of electric operations.

Brooks said CU since 2007 annually budgets around $1 million for its residential and commercial rebate programs, which encourage customer investments in products such as insulation upgrades, high-efficiency toilets and commercial lighting.

“That’s what sustainability is all about. It’s reducing your load,” he says. “On the customer side, there are efficiency programs to reduce that load, and on the resource side, it’s entering contracts for wind and solar generation.”

Nearly a decade ago, CU added solar energy to its locally generated electricity portfolio, with a 4.95-megawatt solar farm on 40 acres along Farm Road 112 east of Springfield, just south of Interstate 44. Customers can participate in the solar program and elect to receive some or all of their electricity from energy produced at the farm.

Additionally, the utility has signed contracts for energy from wind farms in Kansas and Oklahoma, the latest of those in 2019, said Marsha McClanahan, director of energy services and renewables.

“Every chance we get, we’re looking at either purchasing more solar or wind,” she says. “When it’s time for more, we kind of look at everything and try to find the best cost-effective resource that we can.”

McClanahan says CU frequently has requests for rebates that it doesn’t offer, such as high-efficiency windows. It averages 5,000 rebates processed per year.

“We don’t have the budget to process every Energy Star appliance or WaterSense labeled unit out there,” she says. “We have to weigh what are the savings versus the rebate amounts that we’re going to give before we ever put it in our portfolio.”

Although Gidman can’t quantify the financial impact his businesses’ sustainability efforts have made to attract more customers, he says he has heard plenty of positive word-of-mouth that is its own form of payment.

“I don’t know how many times customers have thanked us. They are thankful we took the step to use something that’s not going to harm the environment,” he says. “But with the economy and the cost of everything, even if you want to do something sustainable, it has to make financial sense.”