Green business: 5 reasons for recovery

Managing Director of Planet 2050, Brendan May on why sustainability seems to be surviving the downturn, and even prospering

For those of us who earn our living from sustainability, it’s very risky to assume we are unaffected by the global economic turmoil that graces the front pages and news bulletins on a daily basis. The crisis has implications for the prosperity of the environmental cause, as it does for every product, service or movement. But I would argue that the doomsayers and sceptics who argued that green business would be an early casualty of the credit crunch appear to have been proved wrong.

Here are five reasons why:

1. Yes, they will…
There’s little doubt that the political change sweeping the United States partly explains continued corporate attention to issues like climate change. At barely six weeks old, the new administration will take some time to provide a clear sense of what it will and won’t be able to achieve in combating the relentless rise in emissions.
There will be many debates and trade-offs ahead. But the ‘chatter’ around the Obama phenomenon is, for now, sufficient for the business community to assume that the old rules will no longer apply, and that scrutiny of their environmental performance will increase rapidly in a way that was inconceivable under the previous regime.

Obama has filled his administration with climate experts – not only have the sceptics departed, but they have been replaced by people who not only believe the science but in some cases can claim to be its architects.

The global politics of the climate debate have changed for good. As climate discussions intensify ever more in the run up to December’s Copenhagen summit, it would be no surprise if environmental sustainability once again plays equal fiddle with financial sustainability in the world’s media. The business community, in the USA and beyond, knows that it will be asked to play its proper part.

2. Greener is cheaper…
There is of course an ironic benefit to the sustainability movement from the current economic caution. Times of austerity and last year’s commodity price volatility have turned many people firmly off the fossil fuel based economy.

In a period where the prevailing wind is to consume and waste less, it does not take a huge leap of imagination to link failed commercial structures with failures in our ability to treat the earth’s resources with respect.

Combined with the economic stimulus plans being crafted, many of which place the search for new clean technologies at their heart, it is unlikely that people will look back on this global recession as a bad thing for the sustainability movement.

3. Meanwhile, back in Arkansas…
Another reason lies in a place called Bentonville, Arkansas, home of course to Walmart’s global HQ. Three years ago, Lee Scott turned the course of that company’s direction. He said all the right things, attracted the right cautious support from NGOs, and certainly secured the attention of the world’s media. Even sceptics conceded that it was a good start, but rightly pointed out the proof of the pudding would be in the eating.

Steadily, Walmart has begun to implement its strategy. The most significant recent development is that all suppliers to Walmart are now being required to step up to the plate on sustainability – rightly so as Walmart cannot possibly reduce and eventually neutralise its environmental footprint without its suppliers doing the same.

This supply chain pressure is being felt by anyone who aspires to supply Walmart with anything – and very few firms don’t supply them with something. In the next couple of years, expect to see all sorts of companies who didn’t have a sustainability strategy or carbon footprint measurement system to develop these in fairly short order. It’s pure commercial necessity.

4. Tweet tweet…
Another reason companies are not abandoning environmental priorities is that they simply cannot afford to take their eye off the ball.

One thing that won’t disappear in a recession is hard-hitting NGO campaigns. Especially now they have the cheap option of social media at their hourly disposal.

Indeed, an effective NGO strike on a business is likely to have a far greater impact in a downturn, when there is such intense competition between companies for market share.

Environmental NGOs have an opportunity to exploit civil society’s inevitable dissatisfaction with businesses and governments at a time when both are being heavily blamed for a mixture of excesses and incompetence.

That makes it imperative for companies not to reduce their efforts to attain ever-higher standards of good practice.

5. After the storm
Lastly, the smart company will already be thinking about how it looks when gradually life returns to normal.

How wasteful it would be to have to start all over again with the process of embedding good, sustainable, business practices into an organisation, when all along keeping up the effort would not only have saved money but provided a powerful communications platform with which to re-emerge at the end of the dark times.

Legislation, consumer interest, media coverage, NGO scrutiny and investor pressure are all headed in one direction – more not less green.

Therefore no matter how difficult things look and feel in these long winter months, the smart thing to do is to prepare the recovery strategy, with sustainability at its heart.

When the world returns to financial health, which it surely will, there will be two types of company left: those fit for purpose and those fit for nothing. The fit-for-purpose company will be an environmental leader, ready to embrace a new world order.

Click here to visit the Climate Change Corp website.