Businesses are Combating Climate Change and Turning a Profit

All around the world, there are many sustainable success stories from companies that are seeing tremendous profit from green.

At HP, carbon reductions are now 33 percent better than in 2005, fossil fuel use has been cut by 62 percent and the water savings have increased to 89 percent. Companies like the UK's British Sky Broadcasting having reduced customers' carbon emissions by around 124,000 tonnes. Some corporations, like PUMA are committed to carbon neutrality.

Du Pont has set a goal to increase annual revenue by at least $2 billion USD by 2015 from products that reduce carbon emissions, which were already generating $731 million USD as of 2009.

According to a 2010 global survey, seventy percent of firms with revenue of $1 billion or more say they plan to increase spending on climate change initiatives in the next two years.

Nearly half of the 300 corporate executives who responded to a survey conducted for the accounting and consulting giant Ernst & Young said their climate change investments will range from 0.5 percent to more than 5 percent of revenues by 2012.

Whether to enhance brand loyalty or to reduce costs, businesses are seeing the merit of going green. More than four out of five respondents, or 82 percent, said they plan to invest in energy efficiency in the next 12 months, with 92 percent saying that energy costs will be an important driver.

Despite the challenges, the Ernst & Young Survey indicates that corporate executives are increasingly committed to taking action on climate change. The fact that 70 percent of executives said they planned to spend more on climate change programs is clear evidence of this trend.

Even in the absence of government regulations on climate change, businesses see the value of investing in sustainable programs because they see the opportunities to grow through new services and products, as well as save money through enhanced efficiency and limit risk. This is more than just public relations, it is a reflection of the market driven movement.

© 2011, Richard Matthews. All rights reserved.

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Sustainability is a Catalyst for Innovation

The companies participating in Sustainable Brands 2010 are functioning models of the evolving relationship between sustainability and innovation.

A 2008 report titled “A New Mindset for Corporate Sustainability" was co-sponsored by BT and Cisco, and was written by six academic experts from the United States, China, United Kingdom, Singapore and Spain. According to the report, sustainable innovation is creating new business models, opening up new markets, and providing a competitive advantage. Sustainable innovation is also improving profitability.

This report is more than a theoretical summary or academic exercise, it includes case studies that demonstrate how companies are employing innovative sustainable practices to better the environment and their bottom line.

Organisations that wish to grow profitably in the future must focus their efforts to benefit shareholders, society and the environment simultaneously. Concentrating on any one of these areas at the expense of the other two may compromise a business's long-term success. A focus on sustainability provides the best means to implement this triple-pronged strategy simultaneously, enabling organisations to innovate, differentiate themselves and succeed."

Although sustainable practices were once dismissed for being too costly, as evidenced by Sustainable Brands 2010, more and more companies are coming to the realization that sustainable innovations are a gateway to growth.

Sustainability affords new opportunities for innovation and for profit.
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Profiting from Green

Green’s coming of age is the overriding theme of our times. Green is huge and growing. This is illustrated by the fact that Green received $5.18 billion in venture capital funding in 2007. With $41 billion in assets, collaborations like the Investor Environmental Health Network (IEHN) demonstrate that investors are serious about Green.

In her book Green Marketing: Opportunity for Innovation, Jacquelyn A. Ottman says “Marketers that take the time now to court the deepest green consumers with truly innovative solutions to environmental concerns will be the ones who reap the biggest future opportunities… Look at those businesses at the forefront of the green trend and see a deeper characteristic than just greened-up products or ads that makes them at once environmental and societal leaders as well as profitable: green leaders are driven by more than short-term financial goals. They are motivated by a double bottom line, a bottom line that recognizes the potential for business to affect societal change as well as create economic wealth. A business that at the end of the day is measured by profits as much as its contribution to human potential and the harmony of the company's objectives with other living beings.”

Green is more than just an innovative business concept; a Green business considers the implications of its actions in the wider context. Green is not only about the environment it is about beliefs and values. Burgeoning environmental awareness is feeding a cultural identity based on integrity, idealism and compassion. Profiting from Green implies fidelity to Green ethics. Soaring commodities prices may earn returns for commodity speculators, but they have also helped to drive up the price of food, thereby contributing to world hunger. Profit is only one of the goals of a Green business. As part of a cohesive strategy they must strive to reduce their ecological footprint and function in a socially responsible fashion.

According to an Indie Breakfast Club report on talks given at Lohas Forum 11 by Chris Van Dyke (CEO of Nau) and Joel Makower (founder and author of Greenbiz) , Makower was quoted as saying successful Green businesses have “a comprehensive understanding, a bold vision, benchmarks for success and a desire to collaborate." And Van Dyke said successful Green companies seamlessly weave “a triple bottom line (people, planet, profit) into their DNA”

There are many ways to deliver on a Green promise and communicate Green Value, from eco-labeling to a product offering that employs carbon offsets. Each business needs to scrutinize it's own activities and customer base to develop the most effective and appropriate Green strategies. Successful Green businesses must have vision to see the wider implications of their operations. Green marketing takes the long view and requires patience to realize long term strategies. Green companies do not wait for Green legislation, they have the foresight to proactively address issues.

Jacquelyn A. Ottman’s conception of a successful Green business projects the core values inherent in the Green ethic. She envisions a Green future created by visionaries who marry their competitive spirit to social activism. She sees new products and services creating new industries and more inclusive work and management styles. This new generation of Green visionaries will augment quality and profits through increasingly efficient processes, design and marketing.

Ottman's book Green Marketing: Opportunity for Innovation describes it this way: "The most successful green companies operate holistically...they don't risk disappointing their customers or shaking their confidence.”

How do you profit from Green? You profit by having a quality product with a solid demand that has the added advantage of being Green. Green must be sewn into the fabric of your business culture. Green branding adds value and taps into a revolutionary surge, but it should not stand on its own. Profiting from Green entails not only strategies and tactics but beliefs and values. Going Green means going deep, Green business is good for people, planet and profits.