How Business Can Respond to Rio+ 20

By Robert Girling, Ph.D. Professor of Business Strategy, Sonoma State University

The world is waiting to see just how business responds to Rio+20. Will the fledgling efforts of business leaders such as Interface’s late CEO Ray Anderson who led efforts to redesign products and the way we do business hold sway?

The fact is that more companies are coming to understand that continued prosperity vitally depends on how we treat the environment. As a result, companies ranging from global players like Google to smaller, local Bay Area companies like the office products innovator Give Something Back are pursuing a wide range of “green” business initiatives aimed at reducing fossil fuel consumption.

Meanwhile, the world’s financial markets continue in turmoil in part because businesses pay attention only to the financial bottom line and fail to take into account impacts on communities and the environment as well. Insurance companies, who have to pick up the tab for environmental disasters such as Hurricane Katrina and the BP Gulf oil spill, are demanding sustainable solutions.

The insurance industry has ramped up its efforts to fully understand and address the risks associated with climate change by introducing innovative products and services, such as carbon emissions credit guarantees, or rate credits and other incentives for commercial building owners who re-build damaged properties to LEED-certified standards.

Just what are leading companies doing to become sustainable?

In The Good Company I share 20 inspiring case studies of new as well as established companies and social enterprises from around the world that are making our planet better by addressing climate change while meeting human needs of their employees, suppliers and customers. By reading this book you will learn about how companies like Clif Bar, Triodos Bank, Natura Cosmeticos, Google, Eileen Fisher and many more do what is right by their employees, communities and the planet.

The Good Company has good news: there are a growing number of companies — good companies — that are healing the world by giving back to the community and introducing planet-saving innovations. And here’s the bottom line Good Companies are profitable.

One of the companies is Santa Rosa-based Indigenous Designs, which protects consumers and the planet by replacing toxic, non-sustainable synthetics with organic natural fibers and dyes. Over half of their product comes from knitting co-ops and non-government organizations in Ecuador, Peru, and India under fair trade arrangements where they pay wages up to three times the norm, providing higher incomes so that poor people will not be forced to emigrate to survive. As a result, both the customer and the producer benefit.

Sustainable operations involve seeking ways to “green” any and all operation aspects of a company’s operations from energy use, and transportation and shipping of goods, to selection of suppliers.

The Twenty-first century will be about resource limits but this is good news for companies and regions that take a proactive approach. Why? Despite the fact that unrestrained growth is like a cancer leading California to import 3 quads of energy [equivalent to a 15,000 mile coal train] every year at a shocking cost to our environment, this created a host of opportunities for California’s Green Economy.

Why is that? Because the price of energy today is a fraction of its real cost and rising energy costs will create opportunities for building a vital new economy in California based in such industries as biofuels, hot dry-rock geothermal energy, green building materials. As this money begins to circulate locally [instead of our energy dollars being exported to the Middle East] our local economy will thrive.

According to Next 10’s recently released Many Shades of Green The California Core Green Economy reflected greater resilience than the California economy as a whole during the recent recession.”

If Rio+20 can lay the basis for more ‘Good Companies” some progress will be made to address planetary needs.

Robert Girling is a professor in the School of Business and Economics at Sonoma State University. A Stanford University, Ph.D. and author of many articles and books, including The Good Company. He is a social entrepreneur who co-founded the Sustainable Enterprise Conference series which works to promote a 21st Century Sustainable Economy in Northern California.

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