Partner Article

A green business is a good business

I recently ran a series of waste awareness workshops for frontline and middle management employees of a major UK manufacturer. As I do in my workshops, I challenged the participants to generate a map of waste arisings in their workplace and develop ways of tackling that waste at source. And the results were far-reaching, identifying quality control problems in parts of the manufacturing process and sub-optimal components from suppliers as key issues. Fixing these problems would deliver massive business process improvements as well as a significant reduction in waste.

This came as no surprise to me as I have long believed that waste and pollution are usually symptoms of poor design, poor management and/or poor operative habits. If you tackle the root cause of these environmental problems then you end up with a well designed and managed system being well run by diligent operatives. Which is a pretty good description of a good business.

This experience of mine is borne out by research. Harvard Business School recently compared the economic performance of 90 ‘high sustainability’ companies with 90 ‘low sustainability’ companies. If you invested $1 in the former in 1993, it would be worth $22.6 by the end of 2010. If you had invested in the less enlightened companies instead, you would have $15.4. So the companies that take environmental performance seriously outperformed those that didn’t by a whopping 50%.

Unfortunately, those of us helping companies go green still all too often come up against a blinkered mindset of “environment or profit”, particularly in the boardroom and senior management. That is, as we have seen, a demonstrably false trade off. One of our key challenges is to tear off those blinkers so those business leaders can see the true picture is “environment and profit” and, indeed, “environment or bust.” Whichever way you look at it, green business is good business.

This was posted in Bdaily's Members' News section by Gareth Kane .