In a 2008 report (released on recycled paper), corporate advisor Ernst and Young told clients that sustainable practices are a requirement for businesses that plan to sustain themselves. They say that, “There is no doubt that the growing urgency around green issues will mean that they are set to rise ever higher on the business agenda. The impact of this will be felt across the board …”
The Truth
Scientists are issuing dire warnings and consumers are leading the charge as they search for responsible investments and consumption purchases. Forward thinking companies have been leading the charge too, but these days even the elephants are stampeding to supply the demand for greenness.
In truth, the opportunity goes beyond the claim to be green. Businesses are looking hard at how to make the changes they need to make in order serve the customer and to sustain themselves. There are cost savings to be had and regulations to meet. Stockholders want growth, but they too acknowledge that the certainty of uncertainty in the markets make sustainable practices imperative.
Climate Change
While politicians continue to bicker, Ernest and Young strategists concede that climate change is another certainty. In fact, the Washington Post reported on September 26, 2008, that figures have been released that show the pace of carbon dioxide emissions now outpacing the direst predictions of the International Panel on Climate Change.
For the sake of the future of business, Ernest and Young would like to see a timely resolution to regulatory uncertainty. New legislation, they feel, will place greater restrictions on carbon emissions within five years. United States businesses would be wise to initiate carbon cap and trade schemes, increase energy efficiency, recycle, and limit hazardous waste.
Efficiency Savings
“Efficiency and sustainability are two sides of the same coin.” Businesses can reduce carbon and costs by initiating better planning to reduce over-purchasing and over-producing. They should develop lean, energy efficient, and low-waste production methods. Retooling distribution methods is essential to save time and fuel. Managers should reconsider the cost-benefit of business meetings and travel as well as investment in more efficient facilities. One tool managers can use to increase efficiency is the carbon footprint analysis of their plans and budget.
Revenue Opportunities
Carbon trading is making money for some firms, but the opportunity should be viewed with caution. These offsets may be viewed as inaction on the part of the business. Consumers are learning more about sustainability issues and are demanding products and services that are manufactured by socially and environmentally aware companies who do less harm to communities worldwide. Consumers are rewarding companies that are innovative in their pursuit of sustainable practices.
While marketing claims made “green” and “sustainable” buzzwords, businesses must recognize that they must now “live up to their word.” Retail consumers are pressuring businesses to act in socially and environmentally responsible ways and marketers who recognize the benefit are spinning their companies green practices as well as green products and services.
The Ernst and Young report was compiled from data generated through board level executive surveys. A significant number of chief financial officers were among those surveyed.
Read More: Go Green in 2009 and Green Economy & Job Growth
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