In today’s business landscape, sustainability isn’t just a trend – it’s a strategic imperative for companies seeking long-term success.
For suppliers and distributors, embracing sustainable practices is not only about doing what’s right for the planet, but also about seizing opportunities for growth and innovation.
Enter the Inflation Reduction Act, landmark legislation signed into law in the United States in August 2022. While its primary focus may be economic, its potential impact on sustainability is profound, offering tangible benefits for businesses looking to prioritize eco-friendly practices. (Don’t think I’ve forgotten about my fellow Canadians – we’ve got some tax tips for you, too.)
The IRA allocates approximately $369 billion toward energy security and climate change programs over the next decade, representing a significant investment in sustainability initiatives. This presents a unique opportunity for promotional products companies to access financial support for their sustainability efforts. Here’s how:
1. Energy Efficiency Upgrades
With the IRA’s tax credits and grants, businesses can invest in energy-efficient measures such as upgrading lighting systems, installing smart thermostats and improving insulation. These upgrades not only lower energy bills but also reduce carbon emissions, contributing to sustainability goals while improving the bottom line. Canadian companies can take advantage of similar incentives offered by the Canadian government, such as the Energy Efficiency Grants for Small and Medium-sized Enterprises program or the Energy Savings Rebate program.
2. Renewable Energy Installations
The IRA’s Investment Tax Credit offers up to 30% back on the cost of installing solar panels or other renewable energy systems. Promo firms can leverage this incentive to transition to clean energy sources, powering their manufacturing facilities or offices with solar or wind energy and reducing reliance on fossil fuels. Similarly, Canadian firms can benefit from incentives such as the Canadian Renewable and Conservation Expenses program, which provides tax credits for investments in renewable energy projects.
3. Sustainable Material Sourcing
By prioritizing locally manufactured sustainable materials, businesses can reduce carbon emissions associated with transportation. The IRA’s focus on incentivizing domestic manufacturing further encourages promo firms to source eco-friendly materials and components from within North America. Canadian companies can also benefit from government initiatives promoting sustainable sourcing, such as grants for sustainable forestry practices.
4. Job Creation In Green Industries
The IRA aims to create millions of quality jobs in green industries such as manufacturing, installation and development of clean energy technologies. By embracing sustainability initiatives and supporting green businesses, promo firms can contribute to job creation and economic growth while reducing their carbon footprint. Canadian firms can also play a role by investing in green technologies and supporting sustainable industries within their communities.
5. Waste Reduction, Recycling And Composting Programs
Canadian businesses can take advantage of incentives for implementing sustainable practices such as waste reduction, recycling and composting programs. By participating in government-sponsored initiatives like the Zero Plastic Waste Initiative and the Circular Economy Leadership Coalition, businesses can access funding and support to implement sustainable waste management strategies and reduce their environmental footprint.
6. Transition To Electric Fleets
The Clean Fuel Vehicle Tax Credit offers incentives for businesses to transition to electric vehicles by providing tax credits for new EV purchases. Don’t have a fleet? There are incentives to install charging stations at your office location, too. In Canada, businesses can benefit from similar incentives, such as rebates for electric vehicle purchases and grants for installing EV charging infrastructure.
The Inflation Reduction Act presents a unique opportunity for promotional products companies with a footprint in North America to prioritize sustainability while driving economic growth and innovation. By leveraging the IRA’s incentives, businesses can position themselves as leaders in sustainability while receiving some great tax benefits.
Embracing sustainability isn’t just a moral imperative – it’s also a smart business decision.
Wimbush is the director of sustainability and responsibility at PPAI.
