Go green, or go under…

The climate is changing in more than one way. Not only is the globe warming up, but business attitudes towards environmental sustainability have also shifted. Organisations are re-appraising their impact on the environment and natural resources. Retailers Tesco and Marks & Spencer are just two of the household names which now aspire to carbon neutrality and have pledged to inform customers of the environmental impact of the goods they sell.

It’s easy to assume that the green issue is just another political football like the NHS or education, but business leaders have made clear that organisations need to gather information about their environmental impact for a number of good reasons:

• It is good business
• It offers an organisational opportunity
• It could protect your organisation
• It is not an impossible task and could become mandatory

There are those who believe the green agenda is nothing more than an effort to raise taxes or make people feel guilty for flying. But the experts who discussed the issue with IWR scoffed at such short-sighted attitudes. All of them considered that greener ways of operating represented a business opportunity.

Doug Richards, famed for his appearances on TV show Dragons’ Den, has been busy monitoring the number of investments in green technology with his Library House investment information organisation. Recent reports from Library House show a six-fold increase in solar power investments.

“Cleantech investment is growing strongly,” Richards told IWR at a conference of the same name organised by his company. The conference attracted the big investment houses and a strong contingent of businesses and entrepreneurs working on groundbreaking technology that won’t break the planet.

Mallen Baker, development director at commercial membership organisation Business in the Community , said that companies had to innovate to match their customers’ behaviour.

“The ecological car of the future must be able to burn the other guy off,” he said. “You must work with the way people are. It is no good telling people to turn the telly off standby.”

Baker cited the iPod as an example of good aesthetics taking a market by storm, despite not really being new technology, and he believes green products could do the same.

An entrepreneur’s dream
Richards believes the current climate of interest and green pressure offers an environment ripe for innovation and entrepreneurship.

“The economy and public policy create the environment for innovation; that then creates the person who will wake up with an amazing idea,” he said. “These are the same drivers of investment and ideas behind new, cleaner, greener technology.”

Cementing this theory is the latest financial market trends that show that investors are interested in brand-new methods and technology that have a positive environmental impact.

Richards believes investors have little interest in the prime minister’s nuclear dreams. “They are looking for technology that provides the energy-efficiency gains that are a case for good business,” he said. “They want companies that can impact the overall carbon footprint.”

Throughout the Cleantech conference, the ability of businesses to act in an environmentally friendly way was held up as an opportunity to create products and discover new markets, and could also foster the emergence of new rivals.

Critics
But the green agenda is not whole-heartedly embraced by all. Within the political, scientific and business communities, there is a great deal of debate about whether climate change has been and is being caused by human activity or is merely a natural phenomenon caused by increased sunspot activity.

Any organisation looking to alter its carbon-emitting activities will come across difficulties and criticism from within the organisation. But success stories are beginning to emerge, and all of them show a strong business case for change.

Walter Todd, vice-president for operations at food and beverages manufacturing giant PepsiCo, told IWR that his company had improved the fuel efficiency of its truck fleet by 12% through better technology and driver training.

Richards welcomes those who want to open new debates about the way we currently do things. He would like to see a rerun of the debate that took place between eminent scientists Nikola Tesla and Thomas Edison over a century ago about whether electricity should be distributed using alternating current (AC) or direct current (DC). Tesla and AC won the day, but Richards said it could be of greater benefit to business and the environment to reconsider DC.

He is backed up by John Watson, sustainability controller for European manufacturing giant ABB. “The business need must match the environmental need,” Watson said.

The robotics and factory automation maker has improved its environmental credibility as part of a 17-year programme. Coming from an engineering and manufacturing background, Watson knows technology is already on the market that can lower an organisation’s carbon footprint, but that organisations are not using it.

“At least 65% of the electricity used by industry powers electrical motors. Just 5% of those motors have an energy-saving drive fitted,” he explained.

“Efficient operation of our products is where many organisations can make savings,” he added.

ABB has put together a web-based information resource called the sustainability toolbox that informs customers how to make the most efficient use of ABB machinery and not only reduce the amount of carbon they emit, but save themselves money in the process.

Do it now
Baker at Business in the Community warned companies they needed to start improving straightaway.

Richards agreed. “Sooner or later, to consume unsustainably will have to stop,” he said. “Many corporations are realising that the time horizon to payback is getting better and better.”

According to Richards, organisations are now looking at their own information on energy wastage and what it costs them. “They didn’t realise how much wastage was costing them,” he said. “As energy costs rise they are paying attention to it now because it is good business.”

The public perception of corporate social responsibility is on the increase, too, and a strong green stance will become attached to the brand value of an organisation.

“Companies must do their best, but it is other people’s perceptions that will tell you whether you are succeeding,” Watson at ABB said.

Todd at PepsiCo outlined how his organisation measured its carbon footprint and came up with some surprising results. “60% of the carbon in a packet of Walkers cheese and onion crisps is in the potatoes and the seasoning, a further 16% in the packaging,” he said.

PepsiCo is now researching how to reduce this. The company is already planning to burn the oak husk byproduct of its Quaker Oats product and will then sell the resulting electricity created back to the National Grid. It is also researching wind turbines at some of its UK plants and how the waste oil from frying Walkers crisps can be re-used as fuel for its fleet of delivery trucks.

Richards sees an information opportunity in the growing green interest. “Organisations need to begin measuring the raw material in their products,” he said. The existing culture of goods being cheaper to buy than repair also had to be challenged, he added.

Changing behaviour
Carbon reduction is not a statutory obligation yet. But there are standards that some organisations are beginning to work towards or uphold. PepsiCo, for example, complies with ISO 14001, the environmental management standard laid down by the International Organization for Standardization.

“Brand values will have to shift as public perception changes,” Richards said, citing the Fair Trade businesses that have changed consumer behaviour attitudes and subsequently the business models of major players.

Some organisations are using carbon offsetting as a method of lessening their environmental impact, but Baker was quick to criticise this. “It is a quick fix of fashion,” he said. “It is the environmental version of a Monopoly get-out-of-jail-free card.” Todd agreed and said PepsiCo had not even considered it.

Richards said that resource depletion ruled carbon offsetting out as an option for an organisation that wanted to protect itself, survive and thrive.

“It is becoming clear that oil reserves are less available, and nuclear power is a very divided debate,” he said.

Green issues have risen sharply up the political and corporate agenda over the past two years, but have by and large been separated from the debate about falling oil reserves and increasing energy costs.

In its Cleantech Goes Mainstream report, Library House tried to show how the two debates were entwined.

“We hope to get the word out and stimulate that debate,” Richards said.

The report showed that investors were looking at renewable and sustainable technologies and businesses. Richards said this was because investors wanted to be involved in a major technological and business leap. As a result, there is little investment interest in nuclear and various proposals to remove the carbon from coal in order to bring coal production back into the big league.

Although upbeat and looking for the opportunities in the move to greener business methods, all participants in the Cleantech conference accepted that, as with any change in business behaviour, going green carried potential risks.

“In every question there is an opportunity,” Richards said. “If it goes wrong, it’s bad PR; and if it goes well, it can heap costs on manufacturing.”

Like this story? Spread the news by clicking below:

 del.icio.us     Digg this     reddit!