Going green makes good business sense

By Carolyn Jackson, Editor
Monday, 26 November, 2007

The expression 'going green' might sound like a gimmick, but businesses across the globe are increasingly finding that it makes good commercial sense to adopt the use of green products and practices in the workplace.

With climate change still a dominant theme for business in 2007, many companies are also finding that implementing an environmental code is good for public relations and improves their corporate image.

Retailers such as Tesco and Marks & Spencer in the UK are just two companies which now aspire to carbon neutrality and have pledged to inform customers of the environmental impact of the goods they sell.

Another example comes from US food and beverage manufacturing giant PepsiCo, which has improved the fuel efficiency of its truck fleet by 12% through better technology and driver training.

PepsiCo recently measured its carbon footprint and came up with some surprising results. 60% of the carbon in a packet of its cheese and onion crisps is in the potatoes and the seasoning, a further 16% in the packaging. The company is now researching how to reduce this.

PepsiCo is already planning to burn the oak husk by-product of its Quaker Oats food brand and will then sell the resulting electricity created back to the National Grid. It is also researching wind turbines at some of its UK plants and how the waste oil from frying crisps can be re-used as fuel for its fleet of delivery trucks.

As far as green branding is concerned, a recent ImagePower Green Brands Survey (which questioned 1525 adults in the UK) found that companies that promote themselves as green or present themselves as ethically concerned can reap substantial rewards. Green brands are perceived as having higher quality and consumers say they are prepared to pay a 'green premium' for them. Six out of 10, for instance, will spend more on energy-saving household appliances.

According to the survey, climate change is seen as the most important environmental issue we face by two thirds of those questioned and, in a clear warning to businesses that choose to ignore the environment, 80% of those questioned believe that it is important that companies are environmentally friendly.

Another recent report entitled 'A Change in the Climate', commissioned by UK Trade & Investment, reviews corporate response to climate change.

Findings are not all positive. Of the 634 company executives globally who responded, nearly one third of companies surveyed (32%) do not monitor direct carbon emissions or indirect effects such as supply chain activities and have no plans to start doing so.

About one in five companies (18%) simply measure energy efficiency, whilst a further 25% monitor some or all emissions across parts of the business. Just one in 10 companies comprehensively monitors its entire carbon impact across the whole business.

Chief executive of UK Trade & Investment, Andrew Cahn, said: "This report further emphasises the need for government to continue working with business to ensure we have the right incentives and framework to maintain our competitive position and at the same time tackle climate change."

As the election is looming in Australia, climate change has become a key issue for political parties, with each party trying to establish their credibility on environmental issues. The latest declaration from Prime Minister Howard came at the APEC summit with the 'Sydney Declaration', which will form the basis for a new climate change agreement to replace the UN-backed Kyoto Protocol, which is due to expire in 2012.

Meanwhile, back in the UK, David Miliband, former Secretary of State for Environment, Food and Rural Affairs and newly appointed Foreign Secretary says, "Political parties won't be electable, and companies will not be profitable - or at least they will be less profitable - without credibility on environmental issues.

"Over the next year, government must look at how we can maximise the economic benefits from moving to a low-carbon economy."

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