"It is impossible for ideas to
compete in the marketplace if no forum for
their presentation is provided or available."
Thomas Mann, 1896
The Business Forum
Green Creates Business Value
day we are being bombarded by some element of "going green". Whether it is
climate change, global warming, carbon offsetting, greenhouse gases, rising
of the oceans; we hear it all. What we have not heard is “Where is the
value?” Sure there is the supposed payoff for future generations; but what
about my business now? I’ve heard that going green isn’t cheaper or very
clear cut. This article is going to show where you can extract true value by
taking your company green and how you can simultaneously reduce business
global transportation company, UPS acknowledges that greenhouse gas
emissions impact the climate and pose a serious challenge to the
environment — and ultimately the global economy. It is the
responsibility of all segments of society to improve energy efficiency
and to reduce carbon emissions in the atmosphere."
Scott Davis, CEO of United Parcel Service
(UPS) - quoted in their 2008 Sustainability Report:
tells a lot how one of the largest companies in the world views their role
in helping foster a greener environment for each of us, while remaining
The greatest challenge of going
green is deciding what is applicable to helping the bottom line while
balancing the pressure to be socially responsible. As CEO of Skky.net,
I’m constantly asked by executives of all ranks, “What are the benefits
to me and my company by going green?” This question is quickly followed
by “What impact will green business have on my bottom-line?” Fear of
additional expenses has lead to a significant trend to downplay green
options; especially as our economy struggles. Although these challenges
are present, there still exists a serious case for all companies to meet
the challenges of going green.
Let’s pose the following questions
for thought. Would you choose a green company over a non-green company
if it cost exactly the same? Would you still purchase from a green
company if it was 5% more, 10%, or even 20% more? A significant segment
of American consumers are willing to initially pay a small percentage
more for the green option. Why?
There exists in all of us a desire
to help and do what’s right. We want to be personally successful. We
want to be professionally successful. And we want this success to be the
best it can be. I would argue that this is an innate psychology in all
of us - to help where we know we can make a difference. The challenge
becomes, how and at what price can I reasonably provide the most
benefit for my stakeholders and my sphere of influence?
One answer is in green business.
green adds value
Next time you consider the purchase
of a “green” product, consider what a green company brings to the table.
On the surface it may sound like lip service to say that a company is
green. However, by taking a deeper look, there are many opportunities
for green business to add value to literally every company in the world.
I propose that green business adds
A better understanding of the business on many levels
Finding ways to lower production costs
Reducing building and office space
Optimal use of materials and resources
Reduction in waste and excess
Reusability wherever possible
These are just some of the ways the
going green adds value to the bottom line. In terms of social
responsibility, companies can create further value by linking with green
Promoting a socially responsible message
Targeting potential customers eager to buy green
Passing on savings to existing customers brought about by reduced
Better community relations
By combining the elements of
operational cost reductions with the public relations benefits that
going green provides, value is maximized sooner rather than later.
Understanding the business
If you could look under the hood of
the company you’re about to make a purchase from, there is little
information for you to go on. There is packaging, there is the
commercial seen on television last night, or there could be a
recommendation from a friend or business associate. But how can you
really gauge that this product and/or company is everything marketing
says it is? If it is a green company and/or a green product, this adds a
new mix to your decision regarding the company.
If the company that you are
considering is green, there is a high probability that this company
knows its business on a more intimate level than the company that is not
green. To be considered a green company, the company has most likely
reviewed and inspected some or all of their business processes to see
where they can better help the environment and reduce costs. To do this,
there is a deep reevaluation that must be done. In going green, the
company must analyze its products and processes to find solutions that
reduce its footprint. Competitors that have not gone green have most
likely not gone through the process of deep introspection and are
continuing legacy business as usual.
When I purchase from a green
company, I feel more confident in the company's ability to understand
their business. If a company is willing to take the extra steps to go
green and help the environment, chances are they have taken additional
steps to consider my well being.
It is a
Today, going green is driven in
large part by the millennials, Generation Y,
[ii] or Generation Next as they are sometimes
called. Companies want this target group and their spending influence
because millenials are the next generation of employees and product
consumers. Thus, they are gaining more marketing weight everyday in the
marketplace as the rest of us gentrify.
To successfully target this group,
it’s absolutely imperative that a company connects with this group’s
core values. Millenials are digital from birth and they are more
socially conscious, more socially aware, and possess a genuine concern
for the future of their planet. They view being green as vital to their
Chain Optimization - Cost as a factor
I am repeatedly asked, how can
going green save me money? The truth is that while in the beginning,
taking a business green can be a cost increase, but the overall cost
savings will outweigh the initial upfront investment. Consideration must
be given to the business by looking at your supply chain to:
In order to learn and become green,
the education will cost you an investment in time and relearning your
supply chain. However, in the long run, the cost efficiencies that
emerge as you improve your greening strategies are going to far outweigh
the costs of not greening your supply chain.
Consider the record companies
evolution from CDs to digital distribution such as Apple and Amazon.
With the rise of the Internet, digital music has reduced the need for
CDs, CD packaging, and the environmental impact associated with getting
those CDs to their distribution network and ultimately to you. All of
these costs are reduced with the move to digital music downloads. At one
time, there where hazardous chemicals that were used to create the
plastics and metals for the CD; then we built warehouses to hold all of
the CDs; trucks where used to deliver the CDs to record stores; and as
consumers, we all drove to buy those CDs. By going digital, we are
eliminating massive greenhouse gas producing distribution networks. Sure
there is still a cost for the digital infrastructure, but it pales in
comparison to where we were just 10 years ago. This is truly a green
transformation that has dramatically reduced distribution costs to the
record companies while massively reducing the total impact on the
The drive to innovate
In the quest to rethink business
supply chains and operations, the need to innovate is critical. When as
a business you commit and challenge yourself to build sustainability,
govern your business better, and take social responsibility to your
customers and buyers, you need to rethink your business at a new level
of cause and effect. Every business process that has impact on the
environment now becomes an opportunity to help our environment and our
communities. This kind of rethinking requires a look from top to bottom
to find areas of greener operations and cost savings.
Business planners will invariably
take a broader look at how their business is run. Streamlining
operations requires creative ways to save time, resources and waste.
Constructing a building that is Leadership in Energy and Environment
Design (LEED) certified can have literally thousands of innovations that
contributed to making the building a greener place to be.
[iii] All of these examples are green
innovation at work.
There is one thing that we can all
do as just a matter of our daily lives, and that is to recycle. Most
countries now require some form of recycling waste. This is easy to do
and has instant impact. For example, metal recycling has grown from 3.5%
in 1970, to 35.9% in the year 2000. Today, over 97% of all lead in
America is recycled. And overall in the last decade, America has
increased its recycling by 100% (nearly double).
Recycling is big business now and
for the foreseeable future. There are companies that will come collect
your plastics, aluminum, paper, e-Waste, and all other forms of scrap
materials. This can be an added source of revenue to your company while
significantly lowering the company’s footprint.
When looking at all business
processes, take some time to focus on the waste from each of these
processes. At many points throughout your company’s supply chain, there
are opportunities to eliminate waste. Is there a way I can reduce how
much waste I’m working with? Many times the products that you purchase
for your business have an abundance of packaging that not only takes
more time to open, it also generates more waste that must be dealt with.
Opportunities to minimize the amount of packaging from your suppliers
will help optimize your overall management of waste.
On the production side, by looking
at greener ways to package your products, opportunities to explore
reducing the amount of materials that you need arise. Also look at
reusable packaging options. With smarter packaging, you can reduce your
costs, while reducing the waste footprint to you and your consumers.
The cost of
not going green
With a deeper understanding of what
it is to be green, I would pose the question, “Do we truly understand
the costs to our businesses by NOT going green?” The law of
economics no longer is the only element to running a business.
Businesses are now more actively working in communities, where they must
constantly be aware of the environmental impact of running their
businesses in the community.
We as communities and as people
want cleaner water, cleaner air, and want our children to have a world
free of unnecessary hazards to our core health. Ask yourself, “What
is the cost of not going green?”
In conclusion, I’ve attempted to
demonstrate a handful of ways that green business leads to both
profitability and positive public relations. Additionally, the potential
cost of not going green was also explored. By embracing elements of the
green movement and implementing green business practices, companies can
dramatically reduce overhead costs. Creating green companies not only
reduces the overall costs to each of our businesses, it also sets the
ground-work for businesses to operate efficiently and responsibly.
Our objective now is to work
together to find the best and brightest ideas to transform our companies
to become green, more robust, socially responsible, and increase profit
to all of our bottom lines.
is a Fellow of The Business
Forum Institute and is the Chief Systems
Architect for Maritime Projects for VESystems, inc. and the
Chief Executive Officer of Skky.net. David served
as President and Board Chairman from 2002-2003 for the American
Marketing Association, California Inland Counties He was
Professor of E-Commerce at California State University, San
Bernardino before 2001 when he became
Chief Technology Officer for H.X.X.D. USA, Inc. in
Beijing, China, he is fluent in Mandarin Chinese. David
served as the Chief Software Architect for
Consulting in Newport Beach, California. He is
a Fellow of The Business Forum Institute
and holds a Bachelors of Arts degree in Management and a
Masters degree in Business Administration and Marketing from
California State University, San Bernardino.
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