Green Benefits More than Environment, Profitable Too

September 15, 2008

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Companies are also seeing healthy returns on their green investments, Zachary Karabell, president of RiverTwice Research and senior adviser to Business for Social Responsibility, writes in Newsweek.

Two realities point to a new seriousness about sustainability:

1. China is lifting its gasoline subsidies and forcing the closure of inefficient cement and aluminum factories.

2. American companies are adopting environmentally friendly business practices even though the U.S. government failed to pass legislation restricting carbon emissions.

The reason the largest country and companies in the world are seeking green initiatives is because the higher prices for oil and raw materials have changed the playing field for countries and global corporations, “making reductions in energy use economically viable and strategically important in a way that no amount of green activism ever could.”

Karabell writes that it’s more cost-effective for companies operating in multiple national markets to adapt their supply chains to the most stringent market.

In addition, the trend towards eco-friendly business practices has been accelerated because studies indicate “companies that score well on various environmental metrics also demonstrate above-average return on investment and stock performances.”

Take Staples and DuPont for example, both companies saw resource and regulatory issues emerging a few years ago, adapted, and are now benefiting. Google also understands that if they used less energy, they can satisfy their goals of doing good and well. The company has been seeking efficient ways to manage and power its server network. It recently filed a patent for a “water-based data center,” which uses ocean surface waves to power and cool the facility.

In Jhana Senxian’s recent EL column, she discusses the greening of business culture by comparing the Best-in-Class outcomes from Building a Green Supply Chain, and Getting from Green to Gold – both of which indicate that culture is the lynchpin to sustainability success.

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