The State of Green Business in 2008: Are We Swimming, Treading or Sinking?
Hardly a day goes by without a company proclaiming their intent to slash energy consumption, reduce waste or take some other bold action to green their operations or products Source: http://www.stateofgreenbusiness.com/
The wave of announcements is dizzying. It made the editors at GreenBiz.com wonder: Is this is just lip-service, or is the adoption of green business practices really growing?
The group embarked on a journey to solve this mystery using data on a slew of indicators comprising the GreenBiz Index, part of the inaugural "State of Green Business 2008" report released today. The conclusion: Environmental performance overall in the U.S. is gradually advancing, but often not at the pace needed to offset economic growth or avoid the worst effects of climate change.
"The state of green business is improving, slowly but surely, as companies both large and small learn the value of integrating environmental thinking into their operations in ways that align with core business strategy and bottom-line goals," says Joel Makower, executive editor of GreenBiz.com. "Green business has shifted from a movement to a market. But there is much, much more to do."
Makower and his fellow editors at GreenBiz.com compiled a set of indicators measuring various aspects of green business, ranging from paper use and toxic emissions to building energy use and employee commuting. The group then assigned each indicator a symbol to represent progress: a "sinking," symbol means a measure is losing ground; a "swimming" icon indicates progress is being made; and a "treading" symbol shows an indicator holding its own.
In half of the measures — 10 of the 20 indicators — the verdict was "treading," as progress was lacking or be slow, or at least too slow to address the magnitude of environmental challenges.
They include pesticide use on U.S. farms, which hasn't changed much since 1999. The number of teleworkers is slowly gaining but there hasn't been much progress in getting employees to abandon their solo commutes to work. While publicly traded companies are more likely to publish corporate responsibility reports, the number of companies reporting totaled only 253 in 2007 -- that's less than a 50 percent increase over five years.
There are bright spots, including eight indicators deemed "swimming." Clean technology investments in the U.S., for instance, soared to more than $48 billion in 2006, largely driven by a 132 percent increase in venture capital dollars going toward renewable energy, waste reduction, resource management and other activities that fall within the loosely defined area of clean tech. Related patents shined, too, with U.S. clean-tech patents accounting for nearly half of those issued worldwide.
The explosion of commercial green building projects also is heartening, with a 500 percent increase in the amount of LEED-certified office space between 2005 and 2007. The total amount of paper used in the U.S. has hit a plateau, while at the same time, the economy continues humming. Energy use, measured per dollar of gross national product, is declining, although the rate of improvement has slowed.
Packaging use of aluminum, paper, plastics and steel is making small but steady improvement in efficiency. And renewble energy generation, though increasing, may not grow fast enough to overcome the need to build more fossil fuel-fired power plants.
Two of the indicators were deemed "sinking." One was carbon intensity,
measured as carbon dioxide emissions per unit of gross domestic product. Between 2005 and 2006, carbon intensity fell 4.2 percent, which, at first blush, appears encouraging. But it doesn't change the fact that the U.S. leads in both overall greenhouse gas emissions and per-capita emissions, or the need to significantly reduce absolute emissions.
And even though the amount of e-waste being recycled keeps growing, the absolute tonnage of electronics waste entering landfills or being sent overseas is staggering. But with no reporting mandates, federal e-waste laws or single clearinghouse for e-waste recovery data, it is difficult to determine exactly how much unwanted electronics is being recycled in a responsible way.
The lack of data transcended the e-waste recycling indicator. After determining the indicator list, the editors looked for reliable data that was both meaningful and repeatable, since they intend to track progress annually.
Some data were relatively easy to find while others proved more elusive. Was it really true that the most recent data showing the amount of water used in the U.S. is nearly eight years old? The short answer is yes, which is troubling considering drought concerns in various parts of the country, particularly in the Southeast.
Concludes Makower: “If you believe in the adage, 'what gets measured gets managed,' then it’s clear why many of the major impacts of business aren’t being well managed, at least on the macro scale.”
The Greening of the U.S. Consumer
Consumers today are reducing their carbon footprint and their spending. The trend could offset
the government's stimulus plans.
Lisa Goodson, a 38-year-old mother of three children 5 and under, reuses printer paper by flipping every sheet over
when she's done using one side. She wears a sweatshirt to keep warm during the day when she dials down the heat
in her house in Greenville, S.C. These small gestures are part of Goodson's personal crusade to reduce her carbon
footprint. "I think twice before buying anything for the kids, and I've even talked to my parents about holding back on
gifts," says Goodson, who thinks her house is already loaded up with too much stuff and has lately been cleaning out
toy boxes and donating toys to charity.
Goodson is part of a small, but growing, tide of consumers who have started shifting their spending patterns because
of their concern about global warming. They want to contribute in any way they can to help reduce greenhouse
gases. This kind of consumer behavior is starting to pick up steam nationwide. Consumers are choosing to drink tap
water over bottled water, carrying reusable bags into supermarkets and eschewing plastic grocery bags, and buying
locally produced, in-season foods, rather than purchasing fruits and vegetables that have traveled thousands of miles
on carbon-emitting trucks."You know there's a shift, when drinking tap water is cooler than drinking Pellegrino or Evian," says Faith Popcorn,
founder and chief executive of trend forecasting firm.
END OF THE SUB-ZERO FRIDGE?
All this runs counter to the spending patterns of the last few years. And some economists and retail experts say the
trend could exacerbate an already slowing consumer spending outlook. The days of easy credit (the U.S. Federal
Reserve cut a key short-term interest ratefrom 6% to 1% in a two-year period after 2001) that freed up cash and
engendered high-speed consumption are over for now (BusinessWeek.com, 1/10/08).
And so apparently is the kind of freewheeling spending that saw Americans replace kitchen stoves, refrigerators, and
washers and dryers because they wanted to acquire the Viking stove which cost between $3,000 and $10,000, or a
brushed-steel Sub-Zero refrigerator for $2,000, though similar appliances were available from mainstream brands like
Kenmore or Maytag for a fourth of the price.
Kitchen and Bath Business magazine reported the number of home
renovations tripled in the last five years to over $100 billion.
Newspapers and magazines reported people were installing walk-in closets that were larger than their bedrooms. And
to fill those fancy closets, middle America chose to shop at higher-end stores such as Nordstrom (JWN) and Saks
(SKS) and started buying luxury items such as Coach (COH) handbags. "It was a time of laddering up, and people
were buying the more expensive car or the extravagant vacation, but now they are doing the reverse of that," says
Brian Bethune, retail economist at financial analytics firm Global Insight.
PRESSURES ON CONSUMERS MOUNTING
From the recent swoon of retailers as varied as J.C. Penney (JCP) and Saks, Kohl's (KSS) and Coach, all of whom
reported negative or slowing sales, there is no doubt people are pulling back on all fronts. The U.S. Commerce Dept.
reported on Jan. 31 that consumer spending, which accounts for two-thirds of the economy, rose by just 0.2% in
December, down from a 1% gain in November. It was especially worrisome because December is generally one of
the best consumer spending months, with people buying gifts during the peak holiday season
"Consumers have adopted more cautious
spending plans,"
There are many pressures on consumers—not only is there no additional free money, since the home equity loan market has dried up, but mortgage payments are on the rise, even as home prices continue to fall across the nation.
On top of that, there's no letting up of high gas and heating oil prices. "Consumers have adopted more cautious
spending plans," says Richard Curtin, director of the Reuters/University of Michigan consumer sentiment survey,
which said on Feb. 1 that consumer confidence had dropped by one-fifth in the last 12 months.
It could be difficult to rely on consumer spending to maintain the kind of growth the U.S. has enjoyed in recent years,
especially if you add to all the pressures a fundamental change in consumer behavior. Bridal and children's
magazines have been writing about an increasingly popular trend of no-gift wedding and birthday parties, where the
hosts identify philanthropic causes or nonprofit groups to which guests can send a check instead.
A VACATION IN YOUR OWN BACKYARD
"People are saying they don't need more shoes, more clothes, or more bags; it's all about using less, consuming
less," says Patricia Pao, founder of retail consultant The Pao Principle. Indeed, people are even giving away their
stuff. A survey of How America Shops, by retail consultant WSL Strategic, of 1,600 consumers in the fourth quarter of
2007, found that 84% said they try to give old clothes to charity rather than throw them away. Thirty-eight percent say
they used to care about wearing a designer brand, but not anymore.
It's not uncommon to see discussions on travel Web sites about whether it hurts the environment to get on an
airplane and one site, responsibletravel.com, even poses the question, "to fly or not to fly?" There's evidence from
conversations on these sites that some folks are even opting to take vacations with their children close to home and
are discovering county and state parks.
SAVING FOR HARD TIMES
No wonder airlines are working harder to retain eco-minded customers—Continental (CAL), Delta (DAL), and Virgin
have all launched carbon-offset programs. And people are starting to buy carbon-offsets or energy credits from
companies that promise to identify ways to make up for carbon emissions or energy use by planting trees or investing
in wind or solar energy. One such provider, TerraPass sold about 100,000 such carbon offsets by the end of 2007, a
threefold increase since the beginning of the year.
The growing environmental awareness, and tougher economic times, could even influence the effectiveness of
economic stimulus plans now being weighed by the Bush Administration and Congress. The kind of free spending the
government hopes consumers will revert to might be difficult in this new mood. South Carolina's Goodson says her
family of five will probably get a check of $2,100. Will she spend it? "No way," she says. "Spending got us to where
we are today, and the last thing that the country needs is for people to hit the mall. I'll put my check in the bank and
save it for hard times."
In 2006 the UN General Assembly decided to assign 2008 as the International Year of Sanitation (IYS), with the overall objective of accelerating progress on sanitation to help save lives and foster
economic and social development.
The IYS is expected to build on decisions taken by the Commission on Sustainable Development and help to keep the issue of sanitation at the forefront of the global agenda. The United Nations Department of Economic and Social Affairs has been mandated as coordinator of the International Year of Sanitation, in broad partnership with stakeholders including UN agencies, NGOs, the private sector and academic sector in raising awareness and accelerating progress on sanitation. It is interesting to note that in December 2003, the UN General Assembly proclaimed the years 2005 to 2015 as the International Decade for Action 'Water for Life'.
So we now have a dedicated year, amid a dedicated decade of action on related water issues, as well as a dedicated World Water Day coming up on March 20 2008. This is a key time to raise awareness, as I doubt many people know of this calendar of action. Decades, years and days aside – the focus of this article is the issue of Sanitation. So what is sanitation, 环境卫 生, – sanitation is described as “the development and application of sanitary measures for the sake of
cleanliness, protecting health,” and or “the state of being clean and conducive to health”. So the issue of sanitation is essentially also about access to clean water.
With this in mind it is important to note that only one per cent of the total water resources on earth is available for human use. While 70 per cent of the world's surface is covered by water, 97.5 per cent of that is salt water.
Of the remaining 2.5 per cent that is freshwater, almost 68.7 per cent is frozen in ice caps and glaciers. About 70 per cent of all available freshwater is used for irrigation in agriculture.
Yet because of inefficient irrigation systems, particularly in developing countries, 60 per cent of this water is lost to evaporation or is returned to rivers and groundwater aquifers. By 2025, it is estimated that about two thirds of the world's population - about 5.5 billion
people - will live in areas facing moderate to severe water stress, and one of the most affected areas will be South Asia. Sanitation coverage levels are also lowest in South Asia.
“globally more than 2.2 million people...
die each year from diseases associated
with poor water and sanitary conditions”
Globally more than 2.2 million people, mostly in developing countries, die each year from diseases associated with poor water and sanitary conditions. Currently half of the world’s hospital beds are occupied by people with water borne diseases. In Indonesia nearly 220 million citizens lack access to proper sanitation that requires improved infrastructure.
While 76.15 percent of the total population have access to basic sanitation, such as toilets, only 2.21 percent have access to sanitation with sewage and wastewater treatment. Studies also show that sanitation is often a gender related issue.
Adoption of sustainable hygiene behaviours is strongly linked to the educational level of women. Better-educated women are more likely to adopt long-term hygiene behaviours.
“improving sanitation therefore and
tacking sanitation issues requires a
multi pronged approach”
Improving sanitation therefore and tacking sanitation issues requires a multi pronged approach. However, reading many documents from the UN, the relationship between business and sanitation seems to be missing. The Sanitation challenge, a document created by the World Health Organisation, sets out targets for: governments, civil society, households and start up entrepreneurs and international organisations. Sanitation, and basic infrastructure is clearly a state responsibility, it should not be suggested that business take on this role, nor let the lines of CSR and government responsibility blur this
far. However, there is clearly a role for the private sector – not least because sanitation is also big business and water is a global asset used by all.
A clear benefit must be reported on the links between improvements in sanitation and economic growth. Waste must become an acceptable topic for discussion and action; toilets, effluent, washing, hygiene, sewage must be acceptable patois. Access to water in global supply chains is a business issue, as we repeatedly read in the media – water is in the new oil. As access to clean water becomes more of a conflict issue the most successful businesses will be those who have addressed the issue across their supply chain in advance. Water and sanitation issues go hand in hand yet at the moment the two have not always been paired. Water as a topic, is easier to grapple with, but unless the issue of sanitation of water is dealt with at the same time then the underlying challenges will never be addressed.
Study finds greener companies outperform rivals New report uncovers "strong, positive, and growing correlation" between environmental and financial performance Source: http://climatebiz.com
Companies with sophisticated and comprehensive climate change strategies have financially outperformed their competitors over the last three years, according to a major new report from investment research firm Innovest.
The Carbon Beta and Equity Performance study of 1,500 companies found that there is a "strong, positive, and growing correlation between industrial companies' sustainability in general, and climate change in particular, and their competitiveness and financial performance".
It also concluded that the investment premium attained by those companies with the best climate change strategies was growing as regulatory regimes tighten.
"In the longer term, the out-performance potential will become even greater as the capital markets become more fully sensitised to the financial and competitive consequences of environmental and climate change considerations," the report predicted.
The findings are likely to be welcomed by green business leaders as vindication of those firms that have invested in greener business models on the assumption such initiatives will help bolster their competitiveness and attractiveness to investors.
However, the report found that despite the correlation between environmental and financial performance, there was still huge variation - both between and within different industry sectors - in businesses responses to climate change. It also argued that current corporate reporting of environmental initiatives remained largely inadequate and as a result investors were finding it difficult to identify those companies with the lowest "climate risk".
"Disclosure information is notoriously unreliable, inconsistently reported across companies and over time, and generally not validated by independent third parties," the report argued. "Emissions data alone provides less then 25 per cent of the information a sophisticated investor requires."
Matthew Kiernan, founder and chief executive of Innovest, said that with more than $40 trillion of institutional investor assets now concerned about climate change, it was time for investors to demand more sophisticated tools for assessing the environmental performance of companies.
"It is increasingly critical that performance-driven investors move beyond simply pressing for greater company disclosure," he said. "We are now seeing them begin to demand the sorts of investment tools, research and products they need to turn mere information into superior investment decisions and performance."
