Over the past couple of months, one of the most frequently asked questions has been how the global financial meltdown will impact “green business” and is there a “green bubble?” These questions are posed by clients, potential clients and colleagues.
I have been as objective as I can be in my responses in order to provide the most thoughtful advice and perspective.
My answer is…it depends. Companies who understand the business case for sustainability are not backing off using sustainability to drive revenue and reduce operating costs. Those that do not are letting go as they view ‘green” as discretionary.
In essence, I personally don’t see a slowdown for the companies that “get it.” Getting it means companies have recognized the value in reducing resource use (energy, water and materials) and their carbon footprint. The truly successful companies are at the forefront of deploying products and services that will thrive in a global economy where these resources are constrained.
Several companies in the information technology, chemicals and manufacturing sectors for example are well positioned to reduce their footprint (taking waste out of operations) and to develop product portfolios that help their customers reduce their operating costs.
The IT sector is well positioned to deploy technologies that reduce travel, real estate, energy use (and carbon emissions) for their customers. Suddenly the choice between travel (a cost and carbon issue) and online collaboration seems relatively easy to make.
Products that drive energy and water efficiency are also well positioned with a customer base looking to reduce overall operational costs. Companies such as GE with their ecomagination portfolio of products is well positioned to meet increasing global demand for a move to leaner and more efficient operations.
Finally, the chemical sector has led the movement to increase their own operating efficiency and position products that are more energy efficient (such as home insulation) and more durable over time (requiring less frequent replacement). Companies such as BASF, DOW and DuPont immediately come to mind as leaders.
I believe the choice becomes, do you believe there is business value in sustainability as a business strategy or is it window dressing?
If sustainability is window dressing then this is a good time to jettison your green marketing and communications efforts and hunker down. However, the world will look very differently in the next few years. Carbon will be regulated, and those companies that are more efficient can create innovative disruptive products, and see this as an opportunity will do well.
Don’t be fooled by the recent fall of the price of a barrel of oil to under $40 or so. Remember, the renewable energy investment and production tax credits were renewed as part of the Emergency Economic Recovery Act of 2008 (a.k.a. the “bailout”). Companies are poised to take advantage of these incentives creating new jobs and new markets.
So yes, there will be a slowdown in work for those companies that never really understood the business case and the value to their business with respect to reduced operating costs and increased revenue.
Sustainability has moved from “the right thing to do” to the “right business thing to do.”