Why Going Green Is Good for Business
Social and environmental responsibility is much more than a passing fad. Many consumers are turning their backs on businesses that utilize exploitative manufacturing processes, and some are becoming actively involved in evangelizing for environmentally conscious brands. With demand for responsible enterprises and products at an all-time high and word-of-mouth marketing more important than ever to many brands, aspiring executives and business professionals need to understand the importance of social and environmental responsibility within a corporate context to prepare themselves for a career in management at such organizations.
Long gone are the days when the concepts of profit and social good were mutually exclusive. Environmental responsibility has become a driving force in the organizational objectives of many businesses, and for good reason.
According to Forbes, almost half of global consumers support at least one brand that invests in good causes, an increase of approximately 47 percent since 2010. In its 2012 goodpurpose study, Edelman discovered that 72 percent of consumers would recommend a brand that supports good causes over one that does not, an increase of 39 percent since 2008. With such widespread grassroots support for organizations and products that value social and environmental sustainability, it is little wonder why this has factored so heavily into the corporate strategies of so many leading companies.
However, although consumer support for sustainable enterprises is growing, so too is the need for firms to be transparent about their operations. Forbes reported that many consumers remain unaware of the extent or legitimacy of companies' sustainability efforts.
"Right now, the ambiguity is preventing progress because everybody can talk about 'going green,' but no one really knows what anyone is doing specifically," Mitch Hedlund, founder of Recycle Across America, Eco-Profiles.org and the Environmental Advancement Foundation, told Forbes.
"All of a sudden, when companies are more transparent, and that information becomes easily available and in one consistent format, consumers can make smarter decisions about which brands and products to support."
One organization that has committed to being more environmentally responsible is Wild Harvest Organic Foods, a subsidiary of the nationwide retailer SuperValu. What sets the company's transparency initiatives apart from similar organizations is its willingness to provide information about its operations on the packaging of some of its products, which enables consumers to see at a glance how the firm is honoring its commitment to environmental responsibility.
Several major technology companies have also been eager to promote their environmental responsibility initiatives to demonstrate their commitment to going green. In its annual list of the most environmentally conscious companies, Newsweek listed many of the country's largest technology firms, including IBM, Hewlett-Packard, Dell, Intel and Microsoft as among the greenest companies in the United States in 2012.
Many of the world's most urgent problems can be solved with smarter approaches to business, and they can also yield substantial economic opportunities. The energy sector is a prime example of how transitioning from environmentally harmful fossil fuels to sustainable, renewable forms of power can not only benefit the environment but also create jobs and drive profits.
In addition, modern technology is helping to maximize impact and minimize waste in crucial sectors such as agriculture. Companies such as IBM have invested in utilizing the power of big data to identify areas in which crop yields can be improved and environmental damage reduced.
Financial motivations can be a powerful tool in effecting real environmental change. The Guardian highlighted the recent partnership between Johnson Controls and global real estate firm Jones Lang LaSalle to retrofit New York City's Empire State Building to be more energy efficient in 2012. Not only did this benefit the environment, it was also a profitable venture for Johnson Controls. In total, the project is expected to reduce the building's energy costs by 38 percent, saving $4.4 million annually and reducing carbon emissions by 105,000 metric tons over 15 years.
Although some organizations have been reactive in their approach to going green, others have taken a proactive stance. This is why the University of North Carolina at Chapel Hill Kenan-Flagler Business School prepares the executives of tomorrow by equipping them with the skills and knowledge they need to lead profitable, yet environmentally and socially conscious, companies.
MBA@UNC teaches students hand-on leadership skills while delving deeper into how to make environmental sustainability a core business concept at an organization. The Sustainable Enterprise concentration focuses on topics such as the global context of business, innovation and social entrepreneurship in developing economies, and the principles of sustainable enterprise to help students understand the concept of the "triple bottom line" of profits, society and the environment.
Corporate sustainability is essential to the future of the economy and the planet. Working together, we can create a better world for all, add value to companies and their products, and appeal to consumers with a genuine desire to support environmentally and socially sustainable businesses.