Photo: By mjb84 on flickr
Who would think the same companies that spent the 1980s poisoning our skies, water, and land would turn to cleaner business models today? Even 10 years ago, corporations understood the public desire for better environmental practices but couldn’t see any benefit to the bottom line. This persistent thorn in the corporate side is now a boon to business as green technology becomes more affordable and produces significant cost savings.Double Bottom Line
The new greener corporate America deserves a little applause for its efforts, no matter how financially, rather than morally driven. While Washington struggles to agree on whether global warming exists, the corporate world has recognised the value in green business practices. American big businesses no longer look at the bottom line alone, today they see that green business benefits profits and public relations.
General Electric spokesman Peter O’Toole put it this way: “It’s both great business and good business — great in that it is generating real orders and revenue … and good in the burnishing effect our initiatives have had on both our brand and our business.”
Perhaps consumers deserve a little credit as well. The green corporate shift answers the consumer desire for a cleaner environment. A Times & Trends report from Information Resources, Inc. shows that almost 40
per cent of consumers want eco-friendly products or those that offer reduced packaging.
The Corporate Pollution Revolution
Other businesses seem to agree. They now use environmental costs as a way to reinforce their product branding and strengthen customer confidence. They measure return on investment for green initiatives in
corporate reputation gains and cost savings. This voluntary pollution reduction is a welcome change with a government slow to change. Regulations take time and money to develop, but businesses can install meaningful change quickly and at a lower taxpayer cost.
Since 2002, PNC Bank, the 20th largest bank in the country, opened 43 green branches, saving $100,000 per project. Wachovia, Citigroup, and Bank of America are at it as well. The same is true in manufacturing. As long as these businesses manufacture products, they will seek new ways to cut costs. Energy-saving
programs are easy and affordable ways to do that.
Wal-Mart started to go green years ago, but so quietly that few noticed. Since 2005, the company has been working on green supply chain logistics. Now that so many have followed suit, Wal-Mart is a bit more vocal
about its efforts. The company has reduced carbon emissions every year since the program started and intends to eventually use 100% renewable energy.
Sun Microsystems wants to cut greenhouse emissions by 20% for 2012 by allowing workers to telecommute. Not only does that boost the environment and bottom line, it makes for happier workers. The company has saved millions over six years on the costs of real estate and fuel.
Fireman’s Fund Insurance now provides commercial customers with insurance policies that offer green technology upgrades in case a property is destroyed and needs rebuilding. The company will offer the same to private consumers soon. Consumer facing auto insurance companies are also going green by giving discounts on electric and hybrid vehicles.
Raising the Bar
It is corporate nature to consistently raise the bar on success. That culture is spilling over into green cost-cutting efforts. Instead of lumping waste cleanup and environmental lawsuits into one basket of
inevitable costs, they recognise the value of improving savings goals year after year.
GE is banking on the cultural shift. The corporate giant sees a future in which businesses and consumers invest in ecological-friendly products as a way to feel good about pitching in for the greater good. The
company is developing innovations that cross over on almost every line of GE business. These include desalination technology to perk up clean water capacity; light bulbs that burn up less power; efficient gas turbine engines; and substitute, or alternative, energy products powered by wind and solar energy.
Return on the Green Investment
On March 3, 2001, AT&T announced energy savings of $44 million for 2010 through 4,200 energy savings programs initiated by the company. By training managers to grade energy performance and make appropriate changes, the company implemented programs such as replacing traditional bulbs with LED, removing unnecessary switches to save electricity, and using desktop management software to reduce
computer power consumption. Although the company did not disclose exactly how much these programs cost, the savings is clearly significant.
The computer sector is especially affected by the green movement. According to Forrester Research, 25 million Americans would pay more for electronics if the products use less energy. Americans are voting for green with their wallets, and companies are listening.
One company with an especially good ear is Dell, pioneering fresh air-cooling technology, saving over $100K in operational savings per megawatt, and cutting $3 million in capital expenditure for each megawatt. Not only can the Dell servers save energy with cooling technology, they can run
safely at higher temperatures, saving on cooling costs.
All this adds up to a much greener world, driven by consumer sentiment. The Internet makes it easier for the public to share information about corporate responsibility. The spillover effect on consumer purchase
decisions and, ultimately, on corporate practices is certain.