Getting Your CFO Involved in Corporate Sustainability: Part 2

By Kirsten Nelson-Johnson

To continue from last week’s article topic “Getting Your CFO Involved in Corporate Sustainability: Part 1", the following discusses the concrete incentives available to companies who implement sustainability measures. By engaging in corporate sustainability, there is a good chance your company is eligible to receive some type of incentive – probably several–from federal, state, and local municipalities. Incentives can take the form of property tax abatements, sales tax exemptions, income tax credits, discretionary grants, low-interest financing, appliance rebates, or one of many other available incentive programs.

 

In many cases, companies are already taking up green efforts for competitive or strategic reasons. It simply makes sense for companies to structure sustainability programs in a way that makes them eligible for any available incentives. When a corporate sustainability plan can lead to tax benefits, cost savings, and competitive advantages, the ‘green label’ becomes much more financially feasible.

 

Sustainability Practices Can Qualify for Incentives

What types of activities might be eligible for incentives? There are literally hundreds of programs out there that qualify for advantageous tax treatment. Examples include:

¨      Installing pollution control equipment;

¨      Investing in energy-efficient buildings and components;

¨      Manufacturing products from recycled or waste/excess materials;

¨      Investing in systems to capture items from a company’s waste stream for recycling or reuse;

¨      Undertaking environmental preservation and revitalization activities;and

¨      Adapting manufacturing or other processes to use alternate energy sources such as solar, wind, geothermal wind, and biomass;

The types of incentives offered to encourage energy-saving activities represent just about every type of government sponsored tax benefit, including investment, production, or consumption-based income tax credits; accelerated depreciation for certain capital expenses; property tax reductions or abatements; and exemptions from state or local sales taxes for the purchase of relevant equipment or components. The list of incentives on local, state and federal levels is constantly changing as some expire and others are added.

 

To find out more about specific incentive opportunities provided by the federal government and the state of California check out the following links:

Tax and Government Incentives Promoting Sustainable Development in California

Business.gov “Small Business Green Tax Incentives”