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12 October 2011

The Price of Doing Nothing


So why bother? There's a recession on, times are tight, people are cautious. Why not sit it out and deal with all this green stuff when things get better? Or never?

Well, if your competitors decide to go green they will:

  • Spend less on compliance;
  • Cut the risk of prosecution with attendant legal costs, potential fines and PR fall out;
  • Cut their energy, waste, water and raw material costs;
  • Recruit better staff and retain them for longer;
  • Source more sustainable supplies of raw material;
  • Win more contracts;
  • Retain more existing customers.

They'd be mad not to wouldn't they?

And if you think I'm just being flippant, I recently came across a case where a medium-size company lost 60% of their business overnight when their biggest customer decided they weren't taking green issues seriously enough.

That's no joke.

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20 July 2011

When the going gets tough...

Regular readers will know that three days a week I go for a run along the Ouseburn river valley up into Jesmond Dene and back before sitting down and writing this blog. I do this rain or shine - and today it was just rain, no shine (for proof see pic right).

What surprised me was that I was the only idiot out there running - in fact the only people I passed were a twitcher and a school age couple enjoying a quick snog before classes (a bit of rain won't dampen young love).

Where was everyone else? I thought of the clichés my VIII would shout at each other with tongue firmly in cheek back in my rowing days - "If it's not raining, it's not training!" and "no pain, no gain!".

One of my favourite business/sporting analogies is "The Tour De France is won on the climbs, not the descents." This is particularly apt for green business in the current economic situation - there is a huge temptation to batten down the hatches and hope it all blows over, telling yourself you'll make progress on this "when things get better".

While it's tempting, it is also incredibly shortsighted. If your competitors decided to go for it on this uphill, they'll be whizzing down the other side long before you puff to the top. They'll be cutting costs through energy, waste, raw material and water savings and competing more strongly in the market place with their green credentials. In other words they'll be winning more business and making a better margin on it.

You may say "but we don't have any cash!", but that's not an insurmountable problem - most businesses can make significant cost savings at little or no cost in terms of investment. This can then be reinvested in other environmental improvements to improve competitiveness. It's more a question of attitude and inventiveness than pounds/dollars/euros.

So don't forget one last well worn training cliché: When the going gets tough, the tough get going.

And for good measure I'll add one of my own: Green Business - no place for wimps!

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22 November 2010

When the going gets tough...

You have to be living on the planet Zog not to notice we are at a time of great economic uncertainty - with whole economies teetering on the brink, banks still in part or full state ownership and the dark shadow of redundancy hovering at the back of people's minds. Green might seem like a luxury at such a time but many of the world's biggest names - Wal-Mart, IKEA, Marks & Spencer, Tesco, P&G and Unilever - are not just sticking to their sustainability strategies but boosting them.

Why?

Crudely speaking you can do two things to increase profits: cut costs and boost turnover.

While cutting jobs is attractive due to the size of wage bills, cutting energy, raw material, waste and water costs is easier and cheaper - you don't have to pay electrons redundancy. I know of one organisation which has a £2 million road fuel bill who are literally telling their drivers that every £25k they shave off that bill will save somebody's job.

Boosting turnover has a similar story. Yes, public sector spending is being cut back, but that makes tendering more competitive not less, and green tender points might just give you the edge. Other big buyers such as retailers and brands looking for contract manufacturing still want to go green - which means either their suppliers go green or they find suppliers who will.

Despite all this, some companies are retracting on green issues - I've been advising a couple of highly talented sustainability experts in the ways of the independent consultant recently as their employers are cutting back. Both will make great consultants which means everyone can benefit from their skills, but it is a great shame nonetheless.

A piece of advice that has resonated with me for years is that the Tour de France is won on the uphills not the downhills. It is tough out there, but don't be fooled into thinking you can't afford to go green in a recession. You can't afford not to.

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26 February 2010

The Opportunities Pyramid

I've developed the above model to communicate the levels of benefit that "going green" can deliver. Underpinning the whole thing is compliance - if you don't get this right then the whole thing can come tumbling down. One level above that is direct economic benefits - in particular cost cutting but also retaining value in assets and reducing the risk of non-compliance by providing a margin of error.

If you raise you sights above this level then you are in a minority, but a very wise minority. The first set of benefits in this rarified atmosphere are internal but intangible - recruiting, retaining and motivating the best staff for the business. Above that is all the new business you will win through beating the competition - as we have seen, companies who focus too much on the cost level (ie expecting a good direct ROI) could miss out on this level of benefits. The business people who understand this will be at a considerable advantage over their less enlightened competitors.

And lastly, at the very top, for a minority of businesses there are some rather large new and emerging markets to exploit.

BTW, in Tuesday's webinar, Deborah was explaining the cost and staff levels and I covered the branding/differentiation and new markets.

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25 January 2010

Indirect benefits outweigh cost savings for BT by a long, long way

I was doing some background research on BT's sustainability activity for the Green Executive and the Service Network talk I'm giving in two week's time. Their sustainability report says they've saved £400m between 2005 and 2009 and supported bids worth a potential £1.9bn in 2009. Which means:

• direct cost savings: £100m per annum
• indirect business benefit: £1,900m per annum
= indirect benefits are worth 19 times as much as direct cost benefits

So, please, don't be taken in by by the old "go green and save money" line - BT could have lost out on direct economic costs and still made a handsome profit on their sustainability programme. The prize is much, much bigger than just a few bob's worth of energy savings. The best of the best have their sights set much, much higher. Have you?

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7 September 2009

There's more to it than money...

Last Friday I was editing the nine interviews I have carried out with CSR/environment executives for book#2, The Green Executive. Reading through all nine in quick succession, it struck me how few of them were driven primarily by cost savings. While cost is a factor, the majority say that an overriding factor is company image. Building a trustworthy, progressive and friendly image will enhance sales, win contracts and attract and retain good staff. All of this will improve the bottom line. But there's more than this - the interviewees talk about bringing their values to the workplace and greater personal satisfaction that they are doing something for the greater good.

So we have to remember two points:

1. The financial benefits to going green are much wider and greater than cutting utility and raw material costs. This has to be understood and factored into investment decisions (the next edition of The Low Carbon Agenda will address this in more detail).

2. We should not forget the deeper, philosophical questions about who we are and why we do what we do as soon as we enter our workplaces. We should not feel, or be made to feel, guilty for doing the right thing.

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