Environmentally-friendly business is profitable business
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Environmentally-friendly business is profitable business

Many associate sustainability with expense, but companies that have embraced it are financially outperforming.

This excerpt is taken from www.theGuardian.com

The failure of policymakers to make binding commitments at the Rio+20 Summit resulted, at best, in a lowest common denominator agreement that delivers few real benefits. In 2010, the UK Sustainable Development Commission (SDC) was axed as part of the government’s spending cuts. In the US, Republican efforts to defund the entire Environmental Protection Agency risk even deeper structural shifts.

International governments’ inaction and lack of leadership is clearly worrying but, at the same time, the proactive approaches of a few leading-edge companies are encouraging. Toyota, Sainsbury’s, WalMart, DuPont, Tesco, UnileverMarks & Spencer and General Electric have made tackling environmental wastes a key economic driver. As Jonathon Porritt, director of Forum for the Future, observed, a “governance shift” is occurring in the field of sustainability, with governments stepping back and businesses stepping forward to lead the change.

DuPont, one of the early adopters, committed itself to a 65% reduction in greenhouse gas emissions in the 10 years prior to 2010. By 2007, DuPont was saving $2.2bn a year through energy efficiency, the same as its total declared profits that year. General Electric aims to reduce the energy intensity of its operations by 50% by 2015.

Unilever plans to double its revenue over the next 10 years while halving the environmental impact of its products. In 2010, WalMart announced that it will cut total carbon emissions by 20m metric tons by 2015. Closer to home, Sainsbury’s has announced its industry-leading “20×20 Sustainability Plan” which is the cornerstone of the company’s business strategy. It seems to be on track. In April this year, Sainsbury’s said it had achieved its target of a 50% relative reduction in water consumption.

Tesco has announced that it will reduce emissions from stores and distribution centres by half by 2020 and that it will become a zero-carbon enterprise altogether by 2050. Toyota, already in its fifth five-year Environmental Action Plan, announced that it will improve the average fuel efficiency of its vehicles by 25% in all regions by 2015 compared to that of 2005. In manufacturing, Toyota has already reduced emissions per vehicle by 47% between 2001 and 2012.

Companies such as Tesco and WalMart, are not committing to environmental goals out of the goodness of their hearts, and neither should they. The reason for their actions is a simple yet powerful realisation that the environmental and economic footprints are most often aligned. When M&S launched its “Plan A” sustainability programme in 2007, it was believed that it would cost more than £200m in the first five years. However, the initiative had generated £105m by 2011/12 according the company’s report.

When we prevent physical waste, increase energy efficiency or improve resource productivity, we save money, improve profitability and enhance competitiveness. In fact, there are often huge “quick win” opportunities, thanks to years of neglect.

Environmental waste is the best proxy for identifying and eliminating economic waste. That’s the secret of these companies.

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