It’s fair to say that, over the past few years, companies across all industries have begun to invest in the green revolution. These investments have come in many forms – from solar installations to design of more efficient delivery routes to development of new green products. To be sure, in most cases the initiatives have been undertaken due to promises of eventual cost savings as well as tangential benefits such as positive PR. But they have been investments nevertheless. In other words, resources have been put towards the initiative with the belief that there would be a payout down the road.
Historically, when the economy takes a turn for the worse – especially when credit tightens – we tend to see investments dry up. So it’s fair to ask the question: what will happen to the green revolution in business as the economy tightens? Will companies pause in their efforts, and will we see a corresponding slowdown in progress towards greener processes and products? Or will the changing economic conditions provide new opportunities for business to continue down the path that we’ve been on for the past few years?
I believe companies will change the nature of their initiatives – anything that includes the word “investment” will be looked upon with scorn – but greening initiatives will continue unabated. Investments of dollars and substantial resources will give way to initiatives that focus on efficiency – from processes and practices that utilize energy more efficiently to product designs that use resources more efficiently. The scale of the initiatives will likely be smaller – at least when measured in dollars – but the impact of these initiatives on our economy and environment will be of equal significance to the investments that have been made to date.
This parallel path in which efficiency drives the green economy will have a few key characteristics. First, the payback period for these initiatives will be far shorter than the investments we have seen recently. Second, these initiatives will be less about the PR value and more about the dollars and cents behind them. Third, we will begin to see more companies reach out to their customers in a spirit of partnership, making it clear that consumer backing is required for certain initiatives to work. These initiatives will include relatively straightforward programs to get more customers using reusable bags, accepting their bank statements online, and reading their magazines in digital format; and they will include creative approaches to packaging and delivery that save customers money while helping the planet.
As the green revolution morphs to fit the souring economy it will become abundantly clear that consumers play a pivotal role in determining the pace and type of change that is possible. Now more than ever, companies cannot afford to implement changes that will not be adopted by their customers. Companies will need to educate their customers about the eco-friendly alternatives that are available and that they can benefit from, and consumers will need to sacrifice convenience and choice in order to reap the benefits. But these are the directions that our economy must go in order to achieve a more sustainable state. There will once again be a time for investment, but today is a time for efficiency.
Kent Ragen is CEO of EcoUnit, the rewards program for eco-conscious consumers. Learn more and become a member at www.ecounit.com.