With the recession biting hard and operating conditions becoming more challenging, will sustainability slide off the radar of businesses as they struggle to maintain their position, deliver greater value for money, and cut back on all but the business essentials?
Given the challenging nature of the current economic climate, there is a likelihood that some will see sustainable practices as a non-essential activity, something to be cut back on to curb un-necessary expenditure. However, there are actually ‘many aspects of making a company sustainable that fit well with saving money and improving the efficiency of an organisation.’[1] With UK industry wasting almost £7 million a day on poor energy efficiency (source: The Carbon Trust), this is a major area for possible cost cutting during the downturn. The Carbon Trust estimates that UK businesses ‘could collectively save nearly £2.5 billion during the next 12 months, simply by implementing cost effective energy efficiency measures.’[2] And actually the signs are that for many, a sustainable way of operating is here to stay. Testing economic times means that cost savings and customer perception of a brand are even more important. And commitment to a green agenda seems to be gathering momentum in the IT sector.
Indeed, ‘there is no longer any need to prove the point that technology has a major role to play in reducing carbon emissions, not least since the publication of figures indicating that IT is responsible for two percent of global CO2, the same level as the headline-grabbing airline industry.’[3] According to a survey conducted by the organisers of Storage Expo 2008, ‘of the 513 organisations surveyed in the UK, 70 per cent said green IT and efficiency were still priorities, but with the provision that it must be saving them money.’[4] And that is the crux of the issue. In many instances, going green can actually save money, and in times such as these that is a valuable thing. Energy prices for businesses have already risen around 38% this year. In addition, those businesses that have spent the recent past ‘painstakingly establishing their credentials for corporate responsibility are not going to throw that away lightly.’[5]
For many businesses, the plethora of possible interpretations of the ‘Green Agenda’ is confusing, and just complying with increasingly complex and stringent legislation is enough of a task in itself. Patently, for a significant portion of businesses, the pursuit of an environmentally friendly policy doesn’t spring from an ethical belief. Of those surveyed by Storage Expo’s organisers, only 4% saw it as a priority if it didn’t bring cost savings. 10% said they were not pursuing a green IT agenda because of budget cuts, and 4% said it was never a priority. Outside of IT, increased regulations led by Government commitment to a more sustainable Britain, coupled with spiraling energy prices, mean that organisations are being forced to consider how they can cut energy costs and reduce their emission levels.
Energy costs form a large proportion of company expenditure, and minimising these costs through a sustainable approach will obviously help ease the pressure of the recession somewhat. For a large scale organisation, even implementing a policy of turning off monitors and lights when not in use would save a significant amount. Although in many cases there may initially be a significant investment required for a business to start down a more environmentally friendly path, the future savings of a well thought out sustainable strategy may more than pay for the decision, especially as restrictions are likely to become more stringent and energy costs higher. The Environment Agency’s new office in Bristol is a case in point (as you would expect). The building has been constructed to meet the Building Research Establishment’s Environmental Appraisal Method (BREEAM) ‘Excellent’ criteria. The design allows for rainwater harvesting, natural ventilation and solar power, which will cut the building’s costs by up to £180, 000 a year.
The second major reason for pursuing a green agenda for many organisations is the advantages of an ethical thread to their brand. As the crunch squeezes ever tighter, an ethical corporate stance is a fine way of differentiating yourself from the competition and attracting customers and talented employees. ‘Global sales of ‘environmental industries’ are estimated at $550bn (£280bn)’[6]; products and services with an environmental flavour have become big business, and so there is much to gain from aligning yourself with this trend.
There has become a fashion amongst some for green credentials- ‘according to some observers, too many of today’s occupiers [of new offices] are investing heavily in what has become “Eco-bling”- flashy but useless technology.’[7] It is those who are merely paying lip service to a green operation that are likely to drop the mask, whilst those organisations that have really taken sustainable processes to heart and have made that investment will reap the savings in the years to come.
The increasing cost of resources and the need to cut costs in a recession is likely to move businesses towards devising new products, services and process, and ways of thinking themselves out of problems. A by-product of this may be a drive to a greener operation. ‘A key shift we might see is from spending green to saving green’[8], affecting the mix of products and services which work best and yield the best return. A mounting raft of environmental legislation will force companies to tackle these issues to a certain degree. High energy prices and climate change are issues that are not going to go away. In fact, these problems are only going to become more acute. That the recession will force innovative cost cutting measures for many may unexpectedly move us towards a greener corporate future. ‘Wasteful behaviour by employees in office environments increases energy consumption by 20%, costing UK firms over £157m every year, according to the Carbon Trust Charity.’[9]
A spokesman from ExCel in London drew the following interesting comparison: ‘Let’s not forget that one of the key reasons that the recession is on us is thanks to unsustainable business practices, being too concerned with profiteering and not focused enough on balancing profit with social and environmental targets.’[10] Likewise, a spokesman from Friends of the Earth has this view: ‘Tackling the world’s environmental problems and surviving the credit crunch are not mutually exclusive. In fact, much of what needs to be done to prevent climate change and preserve the world’s finite resources will also help the economy and create jobs.’[11]
Gi Lewis
Firstperson Executive Search & Selection
References
1- Amanda Barnes (Chief Executive of Faversham House Group), quoted in Roythorne, Peter, CSR Vs Recession: Is Sustainability Sustainable, http://meetingsreview.com/news/2008/12/09/Is_sustainability_
sustainable%3F_#, accessed 17/12.
2- Unknown author, Credit Crunch Fails to Derail Green Agenda- UK Business Puts Energy Efficiency At Top Of Cost Cutting Priorities, www.carbontrust.co.uk/news/presscentre/220708_UK-energy-efficiency-waste.htm, accessed 19,12/08.
3- Unknown author, ‘Public Sector IT Can Lead Green Agenda’, in Computing, 21/2/08, www.computing.co.uk/computing/analysis/2210119/public-sector-lead-green-agenda-3837642, accessed 18/12.
4- Barker, Colin, Green IT Still A Priority Despite Credit Crunch, http://news.zdnet.co.uk/itmanagement
/0,1000000308,39515808,00.htm, accessed 17/12/08.
5- Grayson, David, ‘Will Corporate Consciences Crack Under the Credit Crunch?’, The Guardian, www.guardian.co.uk/environment/2008/oct/28/corporate-social-responsibility-green-business, accessed 17/12/08.
6- Jowitt, Juliette, ‘Green Business Boom is Set to Face Trial by Economic Downturn’, The Guardian, www.guardian.co.uk/business/2008/may/25/greenbusiness.
creditcrunch, accessed 19/12.
7- Thame, David, ‘Image Conscious’, in South West Business Insider, Vol. 2, Dec 08/Jan 09 (newsco-insider, 12/08), p.55.
8- Grant, John, What Might a Recession Mean for Green Business?, www.freshbusinessthinking.com/business_advice.php?CID=&AI
=703&PGID=&Title=What+Might+A+Recession+Mean+For+Green
+Business%3F, accessed 19/12.
9- Savvas, Anthony, Peer Pressure Fuels Green Agenda, Says Capgemini, ComputerWeekly.com, 24/10/2008, www.computerweekly.com/articles/2008/10/24/232815/peer-pressure-fuels-green-agenda-says-capgemini.htm, accessed 17/12/08.
10- “Mark”, quoted in Roythorne, CSR Vs Recession.
11- Michael Warhurst (Senior Resource Use Campaigner, Friends of the Earth), quoted in ‘Will The Green Agenda Survive The Credit Crunch?’, Packagingnews.co.uk, www.packagingnews.co.uk/news/865906/will-green-agenda-survive-crunch/, accessed 17/12/08
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