Green business is good business

 

Smart Car

Courtesy Carlos Paes

 

By Alice Demetrius Stock

More and more businesses are finding that going green is good for the bottom line.

According to Prof. Barbara Kahn of the University of Pennsylvania’s Wharton Business School, some of the biggest corporations in the world including Wal-Mart, Ford, General Electric, and British Petroleum, have steadily increased their efforts to integrate environmental concerns into their marketing and have adopted highly visible green strategies to differentiate their company from their competitors.

However, Prof. Eric Orts, director of Wharton’s environmental management program notes that “it is often difficult to know whether a company is firmly committed or is merely “greenwashing.” 

William Ford, Jr., for instance, installed an environmentally-friendly grass roof on a showplace plant, yet continued to rely on heavy trucks SUVs that fell out of favor when gas prices began to rise. Toyota and Honda, on the other hand, profited from investment in vehicles with high fuel economy.

So, while some companies are motivated to promote green strategies out of fear they will be targeted by environmental organizations, Kahn says, many companies are becoming convinced that addressing environmental problems will eventually enhance their bottom-line performance.

Business for Social Responsibility, a San-Francisco-based, non-profit business association that works to promote a more sustainable global economy, recently published a report showing that businesses need to pay closer attention to the natural systems on which they rely, because failure to do so could pose potential risks to their long-term viability.

And the Millennium Ecosystem Assessment, a comprehensive scientific assessment of the earth’s ecosystems, concluded that 15 out of 24 of ecosystems necessary for businesses to remain viable are being degraded or used unsustainably. The report is important to business since natural systems provide a wealth of tangible and intangible services to them. For instance, experts point to some $33 trillion worth of “free” deliverables a year that don’t normally appear on a company’s balance sheet: fertile soil, fresh water, breathable air, pollination, species habitat, soil formation, pest control, a livable climate and a host of others variables that most of us take for granted. And ecosystem trends such as climate change, water scarcity, biodiversity loss, invasive species, overexploitation of oceans, nutrient overloading into water systems and the like are coming to be understood by business to be of particular concern to them.

Fortunately, there is a growing global network of national organizations that promote awareness of corporate social responsibility and provide business leaders with opportunities to network with innovative managers across all industries.

“Green” is an emerging trend to which businesses here and abroad are responding. Joel Makower, founder and executive editor of GreenBiz.com says companies are addressing environmental challenges and heading in the right direction, though “most have a long way to go.” Makower expects “a gradual, incremental transition to more sustainable policies and practices…not breakthrough change.” He collected a round-up of good news stories from 2006 that are very encouraging.  They include evidence of Wal-Mart’s environmental commitments reducing toxic ingredients in products it sells; a five-year plan to reduce packaging; its pledge to sell 100 million compact fluorescent lights in 2007 and an appetite for solar power.

Alternative fuel vehicles are also moving in the right direction. General Motors begins this year with its “Live Green, Go Yellow” campaign and a larger effort to help grow a “flex-fuel” infrastructure, while Tesla Motors’ plug-in electric vehicles are now “the talk of Detroit, Tokyo and beyond.”

“Renewables” are on the cutting edge of corporate environmental practice these days and “green power” is enticing companies such as Whole Food and Wells Fargo. Green is even showing up in the computer industry, with emphasis on energy use and waste disposal. Largely due to boycotts, protests and shareholder actions, Apple, Dell, HP and others are making significant commitments.

Businesses here and around the world, are sure to grow lean and mean, the more they embrace “green.”

By Alice Demetrius Stock is a freelance writer living in Pittsburgh.

 

Published March 2007