Green Business

The following essay appeared in the Summer 2011 edition of Phi Kappa Phi Forum, the member magazine of the National Honor Society of Phi Kappa Phi, under the headline "The Greening of Business."

By John T. Harding

   Going green can be profitable if society controls the expense involved in the process. Although some might wonder whether the benefits outweigh the costs, the larger issue is this: Can we afford not to go green?

   Numerous sources confirm the importance of green business. In just one recent example, the United Nations Environment Programme’s Green Economy Report from February declares:

Moving towards a green economy has the potential to achieve sustainable development and eradicate poverty on an unprecedented scale, with speed and effectiveness. This potential derives from two concurrent changes. First, there is a changed playing field in which our world and the risks we face have materially changed. These changes require a fundamental rethinking of our approach to the economy. Second, there is a growing recognition that the natural environment forms the basis of our physical assets and must be managed as a source of growth, prosperity, and well-being.

   Historically, society ignored environmental issues. Industries believed, for instance, that pollution was something people simply had to live with and wasn’t important enough to deal with. Industries dumped byproducts of production into rivers and streams (or buried them in landfills or clogged the air with them) and didn’t know or care about what happened downstream, literally or figuratively. Native peoples often relocated when this became a problem. Today, this is not an option; society cannot walk away from the damage.

   As environmental activists raised awareness of the dangers brought on by pollution and global warming, and as lawsuits and government regulations began to cost corporations money, prevention and control became the less expensive alternatives. If a business or utility can reduce such costs, it can increase profits.

Eco-friendly corporate initiatives  

   Multinational health care manufacturer Johnson & Johnson serves as a prime example. It cut greenhouse gas emissions by 7 percent and grew its overall business by 300 percent in eight years, said Matthew Banks of the World Wildlife Fund’s Climate Savers program in a report by Margo Kelly of CBC/Radio-Canada, the country’s national public broadcaster, on March 10, 2008. “They’re saving on average about $40 million a year,” Banks said. “So, the rhetoric that this is going to hurt economies, that it’s going to bankrupt companies, is simply not the case.”

   Also, the Philadelphia Eagles of the National Football League are adding wind turbines and solar panels to the top of their stadium, the team announced last November, for an estimated savings of $60 million in energy costs over 20 years. “Team officials say the combination of energy sources will make the stadium self-sufficient and even allow the Eagles to sell some of its power back to the electric grid,” reported The Associated Press. The project is expected to be finished in September. Plus, a village in Italy built four wind turbines on a nearby hillside, and by 2010 was generating 30 percent more electricity than it used. Sale of the excess capacity earned the village more than $200,000, which was spent on school renovation, earthquake protection and additional street cleaning, Elisabeth Rosenthal of The New York Times wrote on Sept. 28, 2010.

   What’s more, T-Mobile, a wireless telecommunications provider, is building cellular towers in Bucks County, Pa., with solar panels as a power source; the new towers will consume 8 kilowatts of power, less than half the 20 kilowatts for a conventional tower. Further, Siemens, a German engineering conglomerate, reported a 48 percent sales increase and an 85 percent boost in new orders for renewable energy equipment during the 2010 third quarter.

   The basic economic formula of capitalism is Profit equals Revenue minus Cost. Profitability rises by increasing revenue and/or decreasing costs. Industrial ecology — a concern for the environment — can increase profit not only by raising revenue, but also by cutting costs. Preventing pollution eliminates the later cost of cleaning it up, so it is more profitable not to pollute. The result can also generate more revenue from more efficient operation. And industrial ecology fosters the creation and growth of renewable and alternative energies.

   It’s still a new field, however. Yale University has a Center for Industrial Ecology but it focuses more on ecology as an industry rather than on the interplay of industry and the environment.