Nobody’s Really Going Green – Most Companies Just Pay Lip Service
A new report from Arthur D. Little, Sustainable Performance shatters my perception that companies are whole heartedly going green. An analysis of the report at Greenbiz.com notes this conclusion.
“Sustainable Performance” from Arthur D. Little argues that regulatory and consumer pressures have not pushed corporations toward sustainability beyond superficial measures.
It’s not surprising that the report concluded that, in general, companies only take steps toward going green when it impacts the bottom line. Driven by shareholder concerns companies frequently implement those green solutions that maximize short terms gain. Forced to “report to stock markets” on a quarterly basis, it can be difficult for companies to proceed with longer term green objectives.
Sustainability – and how we are to achieve it – is one of the most debated topics of the moment. Stakeholders, including customers, want to see companies taking action on environmental issues and, in many countries, legislation now demands that companies publish details of their performance on sustainability as part of CSR reporting requirements. As a result, upbeat stories on environmental achievements are easy to find in any number of glossy, corporate publications. However, a closer look at the reporting of sustainability performance and the corporate strategies supporting it reveals that, in many companies, the response to the challenge of sustainability is only skin-deep.
While many, more progressive companies are making strides where reducing carbon emissions and increasing sustainability improves profits and promotes efficiency, in many cases the opportunity to create a competitive advantage is overlooked.
That may be about to change as investment groups start to target green companies. More and more specialized, as well as established investment groups are seeing the future and asking potential partners about their plans for sustainability.
In fact, between 2005 and 2006, the amount of assets managed by SRI (Socially Responsible Investments) funds domiciled in Europe grew by more than 40%
It’s about time.
Image Credit: noelzialee at Flick’r Under Creative Commons License
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This is an interesting post. I think the perception of being branded a company that is “greenwashing” might discourage companies that are trying to take steps and become more environmentally responsible. However, there’s genuine fear from business owners that I have talked with that are unsure how to proceed with stating that they are trying to focus on sustainability. For example, a friend of mine owns a company that helps people take their junk away. He held an event which he volunteered his companies time to haul away old computers and TV on Earth Day. After doing a good deed, some people still bashed him and his company on the service that they provide. He’s now afraid of the greenwashing backlash that he might face if he tries to do anything else to promote that his company is trying to focus on sustainability.
I think that we need to see more investors and lenders looking to fund companies that have a focus on sustainability. If that starts to occur then I think you’ll start to see more companies actually start their new businesses in a more sustainable manner.
For my business, I provide space to tenants in a “green building”. When a person or company displays a strong commitment to sustainability, I’m much more inclined to work a mutually benefitting deal with that business. They are in line with my corporate mission and I believe that I am with theirs.
Good points Peter,
I completely agree. The fear of accusations of greenwashing AND the incredible focus on quarterly profits do hinder companies going green.
In particular, this is a concern of larger companies, though your point that entrepreneurs, not necessarily positioned as green, can be subject to the same charges of greenwashing is a good one.
I can understand your concern! However, I do believe that we have traveled a long way in the last few years, especially as seen by investors buying into socially responsible investing.
I’ve been following socially responsible investing for about forty years and the difference between now and then is like night and day.
Incidentally, you and your readers might like to look at my site. It covers the latest global green and socially responsible investing news and research. It’s at http://investingforthesoul.com/
Best wishes, Ron Robins
I think it is interesting that some companies go green or try to either in self interest or with the best intentions. I follow video conferencing technology and those like Polycom are pushing their product as a way to go green and not fly or travel as much. While they are right, it of course benefits them to point out this side effect of their product. Others that are using their products are saving both time and money but also can claim “going green”, in this case you will never know the true reason as to why a company has chosen to video conference, but at least it may help the environment in the end.
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