Less Glitter, More Green


Op-ed by Gwen Ruta, Environmental Defense Fund
With today’s economy in such dire straits, it’s understandable that some executives are asking, “Can we afford to go green?” Recent examples would indicate that they can’t afford not to.
At its most basic level, pollution is waste, and on the corporate budget sheet, waste is red ink. Now that companies are looking to save every penny, environmental initiatives present a truly strategic opportunity.
At networking technology titan Cisco Systems, an Environmental Defense Fund internship program helped Cisco engineers develop plans for a new energy-efficiency device that would save an estimated $8 million per year in Cisco’s R&D labs. And the early results of an Environmental Defense Fund “green portfolio” partnership with KKR, the giant private equity firm, unearthed $16 million in annual savings from measures that included reducing truck fuel usage at US Foodservice, cutting paper consumption at Primedia, and improving material use at Sealy.
While smart businesses are cutting costs and improving efficiency to increase profitability, they are also putting themselves ahead of the curve when it comes to our energy future.

In his recent address to Congress, President Obama asked Congress to, “…send me legislation that places a market-based cap on carbon pollution and drives the production of more renewable energy in America.” In doing so, he captured the urgency of the problem and the real economic opportunity in solving it. Companies that cut their energy usage now and position themselves for renewable energy in the future will fare better under a carbon cap than those that don’t.
But there’s another really interesting thing going on here. Environmental and energy initiatives, though financially sound, have often suffered from their pragmatic character. Yes, you can save money and quickly recoup your investment through steps like installing efficient HVAC equipment or reconfiguring your production process to collect and reuse waste. These kinds of initiatives are not risky, but they’re also not as sexy to senior executives as costly propositions like launching a new product line or creating a joint venture in Asia.
In the past, dependable environmental initiatives often lost out when corporate eyes turned to the glitter of high-risk, high-reward alternatives. But today, many of those alternatives are off the table for good (or at least for now), allowing us to focus on the green instead of the glitter.
Market leaders, by definition, capitalize on challenge better and more consistently than their competitors. The same is true of businesses that are environmental leaders, which capitalize on environmental challenges in order to increase their competitive advantage. Some improve energy efficiency, reduce waste or take other steps that are as good for business as they are for the environment. Others look to green their supply chains, prompting other companies to adopt environmentally friendly practices and harvesting cost savings through the value chain.
These economic times pose a tremendous opportunity for companies to overcome challenge – and to challenge themselves – by making basic changes in their operations that benefit the environment. Companies that implement sustainable solutions in this way will save millions of dollars while reducing their environmental impact, showing everyone the true appeal of green.
Gwen Ruta is the vice president of corporate partnerships at Environmental Defense Fund. She is based in Boston, Massachusetts.

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2 responses

  1. I also think that businesses are beginning to understand that the consumer concept of “value” is expanding to reflect an awareness of both environmental and even broader CSR goals. The data on both consumer expectations and competitive advantage is clear: consumers are seeking out companies that act responsibly. Successful businesses are re-working the traditional business model to capitalize on this trend, and as they incorporate CSR goals into their business plans, these businesses are positioning themselves to succeed, even in these tough economic times.

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