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Environmental Responsibility: Today’s Business Megatrend

The Gulf oil spill has captured the attention of millions around the world, stimulating discussions about the accountability every business carries to the customers, employees, and communities it serves. This dialogue reflects a significant shift in today’s global marketplace, from one in which social and environmental responsibility were a niche business pursuit, to one that requires corporations to weave responsibility into its very fabric.

Dan Esty, a Yale scholar well-known in the green business space, labeled environmental responsibility as a new business “megatrend” in a recent Harvard Business Review article. Esty reports that this trend stems from increasing pressure by consumers, shareholders and supply chains on organizations to operate responsibly. Simultaneously, intensified competition for natural resources, as nations like China and India expand in size and power, has led governments and populations around the world to identify environmental stewardship as a major priority. For U.S. industry to compete effectively in this evolving marketplace, sustainability must be a core business principle.

I recently had the privilege to speak at the Corporate Eco Forum in San Francisco about the duty that every business shares to conduct its operations in a socially and environmentally conscious manner. As we have seen in the Gulf Coast, business can affect the quality of life and livelihoods of hundreds of thousands, even millions of people depending on the scope of an organization. A company’s commitment to environmental responsibility – bolstered by transparent goals and routine monitoring – is vital to the long- and short-term profitability of an organization.

Corporate responsibility requires an organization to step back and take the big picture into account. For example, as one of only five trillion dollar industries, wireless is the most rapidly adopted technology in the history of the world. On a planet of 6.8 billion people, there are more than four billion active cell phones. In fact, there are currently more mobile phones in the world than TVs, PCs, and automobiles, combined (per data from the Yankee Group). This boom is good for the bottom-line but also presents environmental opportunities.

According to the 2008 GeSI “Smart 2020” report, the wireless industry contributes 2.5 percent of all U.S. carbon dioxide emissions. As our nation continues to shift toward a service and information-based economy, that number is expected to grow. As industry continues to offer advanced technologies, however, more and more sustainable solutions are also becoming available. A number of existing wireless technologies can substitute physical experiences with virtual ones, replacing high carbon activities and enabling employees to work anywhere, anytime. As this industry continues to offer new technologies, however, we must also balance the challenge of e-waste.

Keeping pace with new technology means that consumers regularly replace electronics. According to the Tomi Ahonen 2010 Almanac for the Mobile Telecoms Industry, while the average replacement time for personal computers is 42 months, mobile phones are typically replaced in just 17 months. The EPA reports that 16,000 cell phones are discarded every hour and an estimated 130 million cell phones go out of use annually. This could create an estimated 65,000 tons of electronic waste. To combat the continual upgrade process, the wireless industry can encourage and make it easy for customers to recycle old or unused devices.

Organizations that offer accredited reuse and recycling programs benefit consumers, the bottom line and the environment. As customers participate in take-back programs that dispose of electronics safely and responsibly, cost-savings opportunities result from re-selling or re-using refurbished devices and parts, and thousands of tons of electronic waste are kept out of the waste stream. Offering a financial bonus – in the form of cash, store credits, or tax credits – to consumers that recycle has been shown to increase participation in collection programs.

Beyond recycling, wireless carriers can move the industry toward a sustainable future by addressing the front-end of product development. Companies can collaborate with suppliers to develop and implement green design standards for consumer products. An ABI study estimates that 57.9 million green handsets will be shipped in 2014, up from what is currently less than 10 million. That jump is prompted by consumers. A 2009 Deloitte study of more than 6,000 customers reported that shoppers are increasingly making purchasing decisions based on an organization’s commitment to environmental sustainability.

By taking a broader view of “good business” and corporate responsibility, U.S. industry can simultaneously make a profit and steward the environment. For ours and every industry, the focus must center on integrating environmental responsibility business-wide. In today’s changing global marketplace, environmental responsibility must be a core brand pillar. Measurable, transparent goals and objectives – aimed at engaging varying levels and units of an organization – must guide these efforts. U.S. industry has only begun to uncover the benefits of the sustainability megatrend but it is my hope that the business leaders of today continue to move our nation forward, so that what we deem as “green” today will be “routine” tomorrow.

Ralph Reid is vice president of corporate responsibility for Sprint.

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