Going Green: The Bottom Line: Starbucks Is Doing It. So Are Shell, Dow, Du Pont, General Motors, News Corp and Virgin. Even New Zealand Companies Are Doing It. Everyone Is Going Green. Why? Although Most Companies Will Tell You That They're Driven by Their Love for Our Planet, the Bottom Line Is That It Makes Good Business Sense

By Hallet, Adelia | New Zealand Management, July 2007 | Go to article overview

Going Green: The Bottom Line: Starbucks Is Doing It. So Are Shell, Dow, Du Pont, General Motors, News Corp and Virgin. Even New Zealand Companies Are Doing It. Everyone Is Going Green. Why? Although Most Companies Will Tell You That They're Driven by Their Love for Our Planet, the Bottom Line Is That It Makes Good Business Sense


Hallet, Adelia, New Zealand Management


Green is definitely the new black. Social trends researcher Jill Caldwell of Windshift says that last year was the tipping point--the point at which most people "got" climate change and loving the environment became cool.

Two factors helped tip the balance--former United States vice-president Al Gore's film An Inconvenient Truth about the horrors of climate change, and the warning by former World Bank chief economist Sir Nicholas Stern that the economic impacts of climate change could be worse than the Great Depression.

But New Zealand has been late in coming to the party. International communications specialist Cindy Baxter, a New Zealander working on climate change projects in the United States, says that smart British and American companies saw the writing on the wall some time ago and moved early to position themselves.

"It makes economic sense as a business to start counting--and reducing--your carbon emissions," she says. "A global and increasing price on carbon is utterly inevitable. The smart businesses are getting in fast."

But just how far do you need to go? Commitment in New Zealand ranges from companies who adopt a sustainability statement and pay a few hundred dollars a year to join an organisation like the Sustainable Business Network, to companies that are reorganising their entire operations along sustainable lines.

Latest research by Waikato University and the Sustainable Business Network shows that businesses have increased their sustainable practices by an average 10 percent over the past three years. The most popular action (taken by 70 percent of respondents) was introducing a recycling scheme, followed by a consideration of environmental impacts of products, processes and services (63 percent), and membership of an environmental group or network (36 percent).

Research leader Eva Collins said that while most companies in Japan (80 percent) and the United Kingdom (71 percent) issued annual sustainability reports, just 11 percent of New Zealand companies did the same.

What did surprise the researchers was that most managers said that while they expect to come under increasing pressure from customers over environmental performance in the next five years, they are not feeling this pressure yet. Just over half (52 percent) said their environmental practices were driven by their own values.

But social trends researcher Jill Caldwell says that while the environment is not yet a factor in the purchasing decisions of the mass market, it already is among trendy urban liberals.

"There is a significant un-met demand in the premium high-end market, and it's growing fast," she said.

This is confirmed by others working in the green area.

"A strong reputation in sustainable business practices can help a company build trust with its stakeholders," says Nikki Wright, managing director of Wright Communication, adding that positive reputation equity can result if companies focus on doing the right thing.

"For clever companies, embracing sustainability makes good business sense. By adopting sustainable business practices companies can improve their access to capital, enhance their brand image, create a competitive advantage and increase sales, attract, retain, motivate and develop employees, sharpen decision-making, improve risk management and reduce costs.

"Several academic studies have shown a direct correlation between socially responsible business practices and positive financial performance. An 11-year Harvard University study found that 'stakeholder-balanced' companies showed four times the growth rate and eight times the employment growth when compared to companies that were only shareholder focused," Wright says.

"Businesses must manage the economic, social and environmental impacts of their operations to maximise their competitive advantage and minimise risks."

In the United States, green business is so far ahead of politics that some of the world's biggest companies have joined forces to push the federal government to bring in a legally binding regime to cut greenhouse gas emissions and to introduce a cap-and-trade emissions trading scheme. …

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Going Green: The Bottom Line: Starbucks Is Doing It. So Are Shell, Dow, Du Pont, General Motors, News Corp and Virgin. Even New Zealand Companies Are Doing It. Everyone Is Going Green. Why? Although Most Companies Will Tell You That They're Driven by Their Love for Our Planet, the Bottom Line Is That It Makes Good Business Sense
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