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Going Green: An Exercise in Irrationality

| Monday June 4th, 2007 | 0 Comments

OK, I am guilty.
As an MBA student in Sustainable Management at the Presidio School in San Francisco and an entrepreneur in Sustainable Business, I figured I better make certain that I was “walking the walk” before I began “talking the talk” to friends, family and business associates with regards to sustainability. Thus, I set out to “green my life.” Sure I drive a hybrid, recycle, compost and use cloth shopping bags, etc. in the name of reducing my impact on the planet. However, last year when my wife and I were looking at “greening” our home, the very first thing we did was look into solar power. This was a mistake. Please don’t get me wrong, solar power is a good thing. In fact, if one wants to get technical, it is the mother of all renewables, as it is ultimately the source of wind energy, wave energy and biofuels. The mistake we made in immediately looking to solar power to address our home energy consumption needs is that, prior to implementing any renewable energy technology, we should first have looked into reducing our overall home energy consumption through efficiency maximization and good old fashioned conservation efforts.
I am not certain what it is in our societal make up that tends to point us in the direction of the latest and greatest technology, but there does seem to be an element of “consumerism” even in well intended efforts to move toward sustainability. Maybe it is an element of keeping up with the “Jones’ of sustainability” or maybe it is an effect of successful marketing by the renewable energy sector, I am not sure. Whatever it is, it seems that the same phenomenon is true at the corporate level as well.
A recent story in the Economist suggests that,


while conservation and efficiency measure are far and away the least expensive measures that firms can take to reduce green house gas (GHG) emissions, many companies are focused integrating renewable fuels, etc.
It is good to see that industry is taking steps to clean up its act on an aggregate scale. However, as GHG emission reduction becomes increasingly linked to financial performance and commercial success, companies that focus on maximizing efficiency and conservation efforts as well as integrating renewable energy into their operations, will likely gain a competitive advantage over companies that do not.
At our house, efficiency and conservation efforts have reduced our energy costs to the point where the savings are close to offsetting the cost of financing solar installation. I imagine that any CFO would like to be in a similar position.
*****Joe Madden, Director of Business Development, DriveNeutral


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