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The Business of Green

Written By: Paloma Somohano
Published On: January 21 2009

For companies, embarking upon environmentally friendly activities goes beyond merely complying with laws and regulations; it’s about organizations and their employees’ voluntary and moral engagements. But integrating these motivations into strategies and overall daily activities is often complicated, since it demands translating generally intangible motivations into concrete actions and measurable results.

Companies might be tempted to rethink their whole business processes in order to make them more environmentally friendly. However, other aspects of reducing negative impacts on the environment can be evaluated. These include infrastructure (technological), the impact of a company’s products or services (responsible production and consumption), and its management practices. There are interesting and flexible options allowing companies to better choose what can be implemented into their existing strategies.

Companies’ Roles in Environmental Compliance

A large part of today’s environmental trend involves infrastructure and energy consumption. As such, many companies are looking for better performing hardware (energy efficient servers, for example). One of the main reasons for this is that the results are easily measured (as in smaller energy bills). However it demands a large investment in infrastructure, mainly because these types of deployments usually require many labor-hours spent on research and development (R&D).

On the other hand, a different approach that companies might take is to integrate environmentally friendly practices into their production systems. One of these practices is the lifecycle approach (included in ISO 14040). This allows the evaluation of a given product’s impacts—from the extraction of the raw material to the elimination of the resources used to produce it (including the use of the product by the consumer). Therefore, the lifecycle approach becomes an interesting tool that can help measure environmental impacts at every stage of a product—from conception through to the use of the final product itself. This helps eliminate pollution before it begins, and consequently reduces the damaging effects on the environment.

Finally, there are many companies—especially non-manufacturing or service organizations—that choose to minimize their impacts on the environment through the adjustment of their daily activities. ISO standards are often a used means of achieving these goals, since it helps enterprises set new standards and goals within the enterprise. In addition, offsetting carbon footprint, creating paperless environments, and using environmentally friendly buildings—among many other things—can also contribute to minimizing pollution.

For many companies, lowering the environmental impact of their activities is crucial to their survival. Just think about insurance companies that must deal with environmental catastrophes (e.g., hurricane Katrina). These types of tragic situations have created a whole new business area that was previously ignored. Consequently, complementary business opportunities can arise, like consultants, R&D (for cleaner practices), carbon offset companies, etc.  These new companies usually complement those of environment-oriented ones. They can be specialized in a specific eco-subject (e.g., R&D or counseling) or outsourcing activity (carbon offsetting), among other possibilities.

Change Will Do You Good

There’s no doubt that the current environmental situation is forcing companies to become more aware of some of the major changes they will need to make in the way they do business. Yet these changes must not be perceived as negative, but rather as new and lucrative way of creating business opportunities.

Among the reservations skeptical companies have towards the implementation of an environmental management system (EMS), there’s the high initial and long term costs of these initiatives, the uncertain revenues, and the complexity of the task itself.

Costs and benefits of green initiatives depend on many aspects that can diverge considerably from one case to another.

Generally, green initiatives result from more constraint regulations for specific industries. Also, pressures (internal or external) can influence companies’ engagement toward cleaner activities. These trends are known as “reactive” or “proactive” (see Corporate Greening Through ISO 14001: A Rational Myth? [registration required]).

On the other hand, some companies prefer to anticipate these pressures or regulations. Amongst their motivations are productive and economic efficiency and image (marketing), as well as internal values.

We’d like to know where your company stands, so please take a moment to complete our Green Poll.

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