Oct 1, 2007

Going Green: Why America's Businesses Should Care

Could you put more greenbacks in your wallet by starting an environmentally friendly business or converting an existing one?

The environmental issue has been gaining momentum in the past few years with help from absurdly high gas prices, our good friend Al Gore and The GLOBE Program. These issues have increased the American public’s awareness of how they and American businesses in general affect the environment.

Environmentalists have been putting more and more pressure on businesses around the country to cut back on pollutants and to decrease their reliance on non-renewable energy sources. Some high profile cases of environmentalists putting pressure on large companies are those of Apple Inc., one of the country’s largest computer manufacturers, and Wal-Mart Stores, Inc., perhaps the largest retail store chain in the world. Apple Inc. came under criticism for not recycling enough of the computer waste that it generated and was subjected to protests in front of its Cupertino, CA based headquarters. Wal-Mart has likewise been under pressure to reduce the impact that its manufacturing has on the environment.

Apple Inc. responded to these criticisms in the form of an open letter to the public from its CEO, Steve Jobs. In this letter, Mr. Jobs addressed the issues of the toxic chemicals that are used in computer manufacturing such as Lead, Hexavalent Chromium, Arsenic and Mercury. He pointed out that “Apple completely eliminated the use of CRTs in mid-2006.” CRT, or Cathode Ray Tube monitors are one of the industry’s leading sources of Lead waste. The average CRT monitor (as can be seen to the right) “contains approximately 3 pounds (1.36 kg) of lead,” by eliminating their use entirely, Apple is contributing significantly to the reduction of hazardous waste in the community. Jobs also promised that by 2010, Apple would be recycling approximately 19 million pounds of e-waste every year.

Wal-Mart has responded to its critics by saying that it is going to “push its 60,000 suppliers worldwide to lower the amount of packaging they use by five per cent, start an aggressive program to require its fish suppliers to use "sustainable" stocks, and slash energy use.” By doing this Wal-Mart believes they can “stop millions of pounds of trash from reaching landfills and reduce the amount of carbon dioxide entering the atmosphere by 667,000 metric tons.”

Another industry that is going green is the commercial construction industry. Companies like the Turner Corporation –“the worlds largest construction company”- are building environmentally friendly buildings like the Hearst Tower (right). These buildings contain materials that are less harmful to the environment, like formaldehyde-free desks. They also use less raw materials then comparable eco-unfriendly structures. According to an article in Popular Mechanics, the Hearst Tower “requires 2000 tons less steel than a conventional office building.” However, the benefits are not all in the environment. George David, CEO of United Technology Corporation, says that some benefits of these “green” buildings include reduced electricity and water costs as well as “documented boosts in morale and productivity from workers.”

So are all of these measures really needed? How bad is the state of our environment? According to the Environmental Defense website, more than 400,000 square miles of Arctic sea ice have melted in the last 30 years and by 2030 U.S. Geological Survey predictions say that Glacier National Park will have no glaciers left. These are rather compelling numbers and more than enough reason for American businesses to focus on ways to reduce their impact on the environment. However, could going green do more than help the environment? Could it also increase a company’s revenue potential?

In a BusinessWeek article, Wal-Mart CEO Lee Scott said they could save $52 million a year with just a one-mile-a-gallon improvement in gas mileage for its huge fleet. Furthermore, their recent request for a reduction in the amount of packaging from their suppliers “will not only enable Wal-Mart to ship 497 fewer containers a year at a savings of $2.4 million but also will spare some 3,800 trees and save more than 1,000 barrels of oil.” In the airline industry, response to a better, more fuel-efficient design has caused Boeing’s orders for their new 787 Dreamliner jet to skyrocket “from 56 in 2004 to 235 in 2005.”

In addition bottom line financial numbers, having a green image holds immense possibilities in the form of advertising and public relations. Any logical consumer, when presented with the choice to support an environmentally friendly company, that also makes a competitive product, will choose to support that company- if not to save the environment, then simply to improve their own self-image.

The most common misconception that most people have about turning their companies green, is that the costs will outweigh the benefits. What they fail to take into account, however, is the tax incentives available for being environmentally friendly. Also, the bottom line benefits as well as the image and reputation benefits are often overlooked when deciding if green is the way to go.

As many American businesses are proving day in and day out, it can be more profitable to go green. The benefits extend much farther than to just their wallets; they reach out into the world, helping to make it a better place for everyone to live, one innovation at a time.

1 comment:

JLH said...

I regards to the subject of your post this week, I found it to fit in perfectly with your overall blog theme. I think that environmental technology should definitely be integrated into the business world and I found the evidence you used towards the end of your blog such as, "recent request for a reduction in the amount of packaging from their suppliers 'will not only enable Wal-Mart to ship 497 fewer containers a year at a savings of $2.4 million but also will spare some 3,800 trees and save more than 1,000 barrels of oil," to be well-chosen and supportive. Not only does it show how going green can be good for the environment, but how much it can also be beneficial to for businesses, especially in terms of finance, profits and costs. I found your links helpful although I would have like to see more in the CRT paragraph to help give a little more background information to the reader. Also, although your post had a good rhythm and flowed logically, I found the first part to be more news-oriented, than critical, in style. You could have strengthened this by stating your thesis sooner. Besides these minor criticisms, I genuinely enjoyed your post and look forward to reading more in the future.