According to Management Consultancy, AT Kearney, in 16 of the 18 industries they studied, companies committed to sustainability outperformed industry averages by 15% over the six months from May through November 2008.
I know I keep banging on about this, but sustainability is not some fuzzy luxury like having modern art in your foyer. It is good business sense - lower costs, marketplace differentiation, lower risks, motivated workforce, better PR etc, etc. If a read another story about an organisation cutting environmental programmes "for survival", I will scream!
It is budget day today here in the UK and it is probably the trickiest budget to pull off in living memory. The big question is whether Gordon Brown and his chancellor Alistair Darling will stick their neck out and go green in a big way. The world and his Portuguese water dog has been proclaiming that the recession/world economic crisis/credit crunch is the ideal opportunity to build a low carbon economy in place of the collapsed oil-fuelled one we've had for the last 100 years or so. The (now) environmental economist Nick Stern (he of the Stern report) has recommended 20% of financial stimulus packages for green measures as a minimum. So how well is this going in practice?
According to the Financial Times the UK has committed a measley 7% , the US 12% and South Korea a whopping 81%. China, long blamed by Western politicians and NGOs for its environmental record, has the biggest single green investment of $221bn (38%). Gordon Brown has pledged to up the UK's game to 10%, but we'll have to wait for Darling to drone his way to the environmental part of today's speech to find if we'll meet even that.
It is interesting that, despite all the proclamations of world leadership on this issue from the White House and Nos 10 & 11 Downing St, it is the Far East which is leading the way.
+++ Update 13:15 +++ The chancellor has just announced an extra £1bn for green measures - if this is truly additional to that announced before, then this would boost the green incentivisation to 11.7%. The billion breaks down into £435m extra for energy efficiency measures, £525m for offshore wind. There will also be support for using waste heat from power generation by exempting them from the Climate Change Levy. Verdict so far: not bad.
... unless you can guarantee the electricity comes from a 100% renewable source.
It frustrates me that much of the recent press coverage describes electric vehicles as zero-carbon as they are obviously not - their carbon performance should be rated as the average emissions from the mains electricity of that particular country. "Zero-emissions" is just greenwash and it should stop now before the inevitable backlash.
My second frustration is trying to get an accurate estimation of what those emissions are. Just this weekend I have seen quotes suggesting that they are roughly the same as the petrol equivalent, that they are 40% more efficient and in one case (the Tesla sports car) just 25% of a small petrol sports car. Not all of these can be right.
We need a proper method of calculating these emissions and we need it now.
Tyneside environmental consultancy Terra Infirma Ltd has increased its turnover by 15% in the last financial year, despite the recession. The company, which specialises in helping organisations develop and implement environmental strategies, has recently signed new contracts with the National Health Service and the European Union.
Company director Gareth Kane said “We are very pleased with these results, and even more pleased with the amount of work coming through the doors. While some companies are battening down the hatches, others realise that going green is a survival strategy in itself. An effective environmental strategy will cut costs, avoid regulatory problems and provide product differentiation in the market place.”
Terra Infirma’s successes come against a background where over 100 major UK environmental consultancies are thought to be in serious financial trouble . Gareth Kane believes that a mixture of innovative marketing, a flexible ‘virtual’ structure and a strong track record of delivery is putting Terra Infirma ahead of bigger rivals. This is reflected in the international nature of the company’s operations. “We’ve sold green business guides across the globe from Canada to New Zealand and we’re currently in negotiation with clients in Saudi Arabia and Singapore” added Gareth “While the immediate future holds many challenges, we’re confident of going from success to success.”
Notes for editors:
1. Source: ENDS Report, Feb 2009
2. Terra Infirma was established by environmental expert Gareth Kane in August 2006 and incorporated as a Limited Company in Nov 2007.
I've written a couple of posts recently about the retail and automotive industries seeing green as the way out of the recession, but the rather exceptional exception to this movement is the energy industry with BP, Shell and Centrica all divesting themselves of renewables interests in recent months.
What on earth are they thinking?
Obama has made major green energy pledges, the UK Government has a huge raft of low carbon legislation coming on board and the climate change negotiations in Copenhagen this year make the Kyoto protocol conferences look like a vicar's tea party. Even though the G20 meeting in London largely steered clear of climate change, it did get some of the less enthusiastic nations to agree to take part in Copenhagen.
Low carbon pledges mean investment in, and incentives for, low carbon technology. So why on earth is Big Oil going back to, erm, oil?
It has been said that when the transistor came along it was ignored by the then dominant vacuum tube (valve) industry and, as a result, none of those companies is still in business. Big Oil should take note - they could end up as the fossilised fuel industry.
The two LCIN workshops yesterday went extremely well, with full capacity on each.
The first, Long Term Environmental Strategy, was the more tricky for me as facilitator. When I asked the participants where they were at and where would they like to be, they all gave the same answer - "we haven't a clue". I had two choices, lecture them for an hour (and bore them to tears) or get them to think through the process stage by stage. I opted for the latter and it went very well, but it took a lot of patience to elicit the answers. We covered drivers (cost was surprisingly low on the agenda given the recession), baselines, targets, solution generation (including backcasting which no-one had heard of), filtering solutions, financial commitment, leadership and a little on staff engagement. That's quite a lot to fit into an hour with no powerpoint...
The second session was on eco-renovation of buildings. This time almost everyone at the table had some experience of the topic, so I could sit back a little and facilitate the discussion properly and there was some really great sharing of experience and expertise. We covered insulation, micro-renewables, upgrading HVAC systems, waste heat recovery (internal and external), natural cooling (particularly of server rooms), layout and user behaviour.
I also sat in on another workshop on "the boardroom imperative". My learning point for the whole day (every day is school day in this game) came from a guy from KPMG where instead of trying to find a fair financial incentive scheme, they have decided to give 50% of savings on paper use to charity. This has proved extremely successful and popular and avoids all the potential pitfalls of incentives payments going straight to staff. Genius.
I commented a few weeks ago on the car industry going green to beat the recession. Well last week I saw some evidence that retail, another sector said to be on the brink, is trying the same tactic. John Lewis had given two windows over to green products, clearly believing that this sets them apart from their competitors.