Lord Chris Smith, chairman of the Environment Agency, said firms "cannot afford to put environment last on the list" during the credit crunch.
The costs of waste disposal and energy could adversely affect the turnover of businesses while green markets could provide new opportunities.
Lord Smith also said companies with a good green track record would see environmental regulation charges reduced while those who do not manage their impact on the environment properly could see charges treble.
Companies which control their environmental impact well outperform competitors which fail to do so, research by the Environment Agency has revealed.
A failure to comply with environmental legislation would lead to fines while the Advertising Standards Authority would continue to take action against "greenwash" that covers up poor environmental performance, Lord Smith warned.
The Environment Agency last year fined 284 companies a ...