Makower: Environmentally Responsible Companies Are Better Managed
Green market today is an undeniable reality that has evolved from the status of “environmental movement” into a large-scale business that can no longer be ignored. Large companies with turnovers of billions of dollars increasingly incorporate the green concept in their activities, thus sustaining this growing market – whether for environmental purposes or merely for greenwashing.
Today, more than ever before, knowledge of green economy rules is the cornerstone for action. Strategies for the Green Economy is one of those hands-on collections of knowledge that can easily fuel a greener development after Rio+20. During our very interesting conversation with the author, Joel Makeower, we tried to define green business, single out greenwashing, and assess green opportunities for emerging markets.
How do we define a green business?
One of the issues that emerges is the lack of an accurate definition for this concept, despite the fact that the environmental movement caught wings over the worldwide business. In order to be successful, every market needs clear rules and standards.
Recycling cartons from your building, putting double-glazed windows or using seclusive “add-ons” doesn’t mean you run a green business. There is a mix of interrelated elements that refer to energy, construction, transportation, and information technology, all of them converging.
Makower, who is sometimes called “green business guru”, tries to give us a more thorough definition of the term “green business”, helping us to understand the difference between greenwashing and the truly green operations developed by companies:
“Generally speaking, I see green business as one that integrates ecological thinking into its operations and makes it in a manner that delineates an essential business strategy, not just disparate elements. Each operation within a company must be part of the green business. I have studied these things for over 20 years now, and initially, every company had an environmental leader, usually an engineer, sometimes a lawyer, who was in charge with different operations in terms of aligning the company to certain environmental standards. The idea was: we put someone in an office and he will deal with the environment. Nowadays they’re everywhere: in acquisitions, product design, operations, sales and marketing, human resources, finance, accounting and others. It’s everyone’s responsibility. Each employee or manager takes care of the environmental impact of their operations as part of their mission or responsibility in the company.”
Leap-frogging development for emerging economies
The green market has an uneven growth throughout the world. Economically developed countries have a stronger grasp on the green concept. Big corporations across the US, for example, already see it as part of their usual business. Procter&Gamble has the problem of water use as part of the design protocols for each product. Each product requires water and the company’s management department is concerned with how to operate these products in a world in which water insufficiency tends to become a dire reality.
A publishing house in Wisconsin became aware of its over-consumption of ink and the high costs involved in acquisition and revaluation of the ink as waste, so the management came up with a business and production plan to minimise that consumption.
“I was their counselor for a while and found that the system works. I then asked the manager of that relatively large company (it has over 9,000 employees) how many environmental employees they have within the company. His answer was ‘Over 9,000.′ That’s the idea!” explains Makeower.
Such examples are common across the US, where technology and developed economy helped strengthen greener mentalities, whereas less developed countries such as India, China and those in Eastern Europe are still struggling to catch up – but they are doing it at a much faster pace.
“What I observed concerning emerging economies is the development in leaps [leap-frogging],” Makower says. “Even if they don’t build green buildings and major industries are difficultly upgraded, businesses adapt to new technologies that have evolved with a relatively small step in the West. The classic example is the mobile phone. Few families had fixed telephone lines, but almost everyone has cell phones. High technology meets the economic need to communicate because it is obviously cheaper and because its application does not require investments in infrastructure.”
Greenwashing vs. green business. Can greenwashing be positive in any way?
A large number of companies that have serious problems with, say, polluting rivers, build urban parks and organise events on the bike, thinking they can justify the damage brought to the environment by some good yet small things. Some claim that the mere display of an environmentalist speech from the company is positive for community progress. There are many people who sincerely believe greenwashing is a positive thing.
“Many companies want to become green. This gives birth to a dialogue that has not existed before. True, that’s a good thing, but even more important is what happens once that dialogue begins. Does it stop there and the management says ‘Hey, we’re green!’ or does it start a real conversation between business and activities?” Makower says.
“If you beat up your wife, don’t expect to be forgiven just because you bring home some gifts for your children. The real issue here is not that they pollute – don’t get me wrong, pollution is a problem! – but the fact that they claim to be green. Companies are beginning to have problems when their own perceptions are considered true. It’s the say/do gap. They need to improve their technology, to reduce the environmental impact and to do nice things for the community.
“I think that one thing often gets lost in this conversation: environmentally responsible companies tend to be better managed companies, are more efficient, have the ability to attract and retain talents and operate more efficiently.”
Joel Makower, Strategies for the Green Economy: Opportunities and Challenges in the New World of Business. The book distills the author’s more than 20 years-long observations of the green business scene. It offers insights and inspiration for understanding and untangling the complexities and controversies of profiting in the growing green economy. Makower is the leader of Greener World Media and founder of GreenBiz.
Featured image credit: Loozrboy / Flickr / CC BY-SA 2.0