The Rise in Green Profits

Each year I develop a new class to teach. It keeps me from being bored and boring. The process always leads me on quite an adventure, as one source leads to another resource to another idea and on and on. My current adventure has to do with socially responsible, sustainable businesses. Although I am still “mid-adventure,” I want to share some of what I’ve learned so far.

First, what in the heck is a sustainable, socially responsible business? It originated from a general concept of “Sustainable Development.” This was formally defined in the 1987 report of the United Nations’ sponsored World Commission on Environment and Development as “meeting present needs without compromising the ability of future generations to meet their own needs.” British business consultant John Elkington further defined the concept by coining the phrase “triple bottom line,” which puts the focus of business not only on financial performance, but on environmental and social performance as well.

For example, CERES, the Coalition for Environmentally Responsible Companies, includes companies such as Bank America, Coca-Cola, 3M and General Mills. Its code of conduct includes:

  • Protection of the biosphere
  • Sustainable use of natural resources
  • Reduction and disposal of waste
  • Energy conservation
  • Safe products and services
  • Environmental restoration

For more examples, take a look at the November 2006 Inc. magazine’s cover story “The Green 50,” which describes businesses ranging from wineries and breweries, to Internet providers and burger joints, to builders and engineers; all of whom have taken the sustainability leap and are proving that acting green and making money is not an oxymoron.

My favorite company example from the Inc. article is Interface, a textile manufacturer that makes those carpet squares you see in commercial buildings. They determined that they had used over a BILLION pounds of raw materials to do $800 million in sales. This staggering amount of raw materials sent CEO Ray Anderson on his 22-year quest to recycle, to reuse and to reduce waste that coincidentally resulted in greater profits. For more on this story, check out Anderson’s book, Mid-Course Correction.

While a high moral ground might have been an initial driver for this style of business plan, it is now driven as well by the huge financial considerations brought on by high oil prices, global warming, ubiquitous toxic chemicals, and the understanding that the Earth’s resources are indeed finite. Thus, this business trend is no longer just made up of the fringe, alternative-type business.

Businesses in the building and remodeling industries are moving in this direction primarily by “going green.” In a presentation at the NAHB’s National Green Building Conference, Peter Pfeiffer, of Barley & Pfeifffer Architects of Austin, Texas, described the five pillars of green building:

  • Increasing energy efficiency
  • Using materials appropriately
  • Conserving and reusing water
  • Providing a healthful living and working environment
  • Building attractive structures that will last

The first West Coast Green Residential Building Conference and Expo, held in San Francisco last September, had over 8,000 attendees.

Indeed, the National Association of Home Builders called 2006 the “tipping point” year, with green building going mainstream in 2007. In fact, there is now a Certified Green Building Professional certification program in California sponsored by Build It Green, a nonprofit organization dedicated to green building (www.builditgreen.org).

But going green is just one part of a socially responsible, sustainable business model. The opportunity exists to take this movement a step or two or three further, to move beyond the use of green materials and methods, to the next steps of social responsibility. These areas include how we treat our employees, increasing the support we give to the communities where we live, and to connect the dots between what we do each day and the impact it has on the health of our planet.

Victor Hugo said, “Nothing is more powerful than an idea whose time has come.” I truly believe the time has come to look at the choices we make for our businesses and lives through different, broader based lenses.

While I will continue to share my research on this vital topic throughout the year, I would love to hear what you are doing and seeing in your communities in this area. Please pass on your ideas to me at lfrancis@pacific.net.

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