Sustainability is No Fad

January 16th, 2012 by Mike Harrison Leave a reply »

As we start 2012, the question I hear most while talking about Sustainability is whether it is just another fad. The simple answer is “no”. Why? Market forces!

Take carbon foot-printing for instance. Reducing carbon is all about energy per unit of production; nationally the Gross Domestic Product (GDP). And since the industrial revolution, economic power has been inseparable from energy. The world’s most dynamic economy, China, has pledged “to reduce its CO2 output per unit of GDP by up to 45% through 2020 compared with 2005 levels”(1). In 2009, the U.S. was 27th among OECD(2) in its energy efficiency per unit of GDP(3). As a country, the U.S. economy must become more efficient to be competitive. This is just as true for companies, communities, and educational institutions. Energy efficiency and renewable energy also provide an important hedge against energy market volatility. And given the progress of regional greenhouse gas regulation regimes and the Durban Platform along with the increasingly obvious economic and societal costs of petroleum, it’s clear that efficiency and renewable energy¬†are in our future.

The same is true for material efficiency. Globalization has fundamentally changed and tightened the worldwide market for commodities. This rising competition has increased pricing pressure and volatility. This trend is fueled by annual growth rates in countries like China, India, and Brazil that routinely exceed 7% and it is only expected to continue as world population expands towards 9 Billion.

And customers and employees care. Ever year they care more deeply about environmental issues; even through this global recession. That ties green credibility directly to brand equity, employee satisfaction, productivity and profitability. Sustainability is a core strategy to reach more and more loyal customers and inspire innovative, productive employees. The collaborative tools, transparency, and objectives fundamental to sustainable business are recognized best practices. Taken together, this means that Sustainability has become a business imperative.

One example of market forces driving both change and opportunities is in green chemistry. Increasingly green chemistry is as important as energy and branding. People have shown a clear interest in removing toxins from products that touch their children, themselves, and their environment. The green cleaning industry is leading the wave with the worldwide compounded growth rate in household green cleaning products predicted to be about 25% through 2017(4). The demand for green cleaning services is also growing as public interest and certification standards like the USGBC’s “LEED” continue to gain momentum. The desire to avoid toxic chemicals is expanding into green building, fabrics, landscaping, and other products that we routinely come into contact with.

As companies attempt to leverage this increasing public awareness, and organizations such as the Sustainability Consortium bring transparent and consistent information regarding the impact of products and services to the marketplace, sustainable practices will continue to expand into all elements of our economy. Increasingly, the sustainability of a business, community or educational institution will define its access to capital and insurance, and define competitive advantage now and in the future.


(1) China announces targets on carbon emission cuts

(2) Organization for Economic Co-operation and Development (OECD)

(3) GDP per unit of energy use

(4) Global Industry Analysts, Inc., “Household Green Cleaning Products: A Global Strategic Business Report”, September 2011

Advertisement

Leave a Reply