Friday, February 20, 2009

Guest Article: Green in a Recession

By Andrew S. Winston,
Author of Green to Gold: How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage

"Do you think this green thing will take a back seat now that money is tight?"

I now hear this question more than any other. Times are uncertain, so who really knows what corporate priorities will be over the next year or two? But at the risk of being dead wrong very soon, I'll venture some opinions. First, if there's a deep, prolonged recession, the green movement slows down because everything slows down. Of course some parts of the economy will lose momentum slower than others (the growth of renewable energy, for example, will likely continue but perhaps at a slower pace of growth, much like China's recent 9 percent GDP rise was oddly seen as recessionary).

Aside from the macro issues, the critical point is that delaying action on sustainability plans may be the absolute wrong thing to do for your business. Being far more efficient and effective with resources remains one of the main pillars of going green. As Dave Steiner, CEO of Fortune 200 company Waste Management, said recently, "When things are this tight, people see that it's about saving jobs and money. There's no better time to take action." This instinct to dive in head first runs counter to the visceral need to batten down the hatches and ride out the storm. But as in most recessions, the companies that have the means to invest in smart ways during down times rebound the fastest when the economy turns around.

A second pillar of green business - using the environmental lens to create new ways to design, manufacture, and provide goods and services that use drastically less resources - still generates lasting value. A sustainability focus helps companies provide customers with better products and to some extent a better life. Is there a better time for product and service innovation than when consumers and business customers are stretched thin? What business wouldn't want to create a more profitable and innovative enterprise, all while building stronger relationships with customers, employees, communities and even shareholders?

These "carrots" of profitability and innovation are important, but the fundamental forces driving the Green Wave make up a powerful "stick" as well. All five of the pressures I outline are still building, as well as the underlying natural forces such as climate change. (The planet doesn't much care whether we're in economic freefall.)

The economic recession won't stem the tide of the Green Wave. Take the issue of business-to-business pressure (or "greening the supply chain"). Wal-Mart recently assembled all its Chinese suppliers in Beijing to lay out the company's expectations and standards on environmental and social issues (see my post on this meeting here). The world's biggest company - and China's seventh-largest trading partner (ranking among countries) - made clear that noncompliant suppliers will be, in the words of CEO Lee Scott, "banned from making products for Wal-Mart." Those are tough words and don't indicate any slowdown in the company's focus on sustainability.

So the Green Wave is here to stay. The recession brings one positive development: The drop in energy prices gives companies and our economy a bit of breathing room to find efficiencies and get off of oil as fast as possible. So take advantage of the reprieve, push your people to do more with less, and innovate to set your company up for rapid growth and success when times get better. They always do.

Copyright © 2009 Andrew S. Winston co-author with Daniel C. Esty of Green to Gold: How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage

Author Bio
Andrew S. Winston, co-author with Daniel C. Esty of Green to Gold: How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage, advises some of the world's leading companies on how to profit from environmental thinking. He is also a highly respected and dynamic speaker, exploring the business benefits of going green with audiences around the world. Andrew's earlier career included corporate strategy at Boston Consulting Group and management positions in marketing and business development at Time Warner and MTV.

Article printed courtesy of the publicist.

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