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Published in Spring 2006
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Green business: the next environmental victory
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By William V. Kennedy
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The past 20 years have witnessed many significant environmental accomplishments in North America. Industrial air pollution is down, access to clean water is up, and our
governments have shown that, when the will is present, they can make real progress in setting and meeting environmental treaty targets (for example, in just ten years, the Montreal Protocol
to reduce production and use of ozone depleting substances is a major success).
Of course, we no sooner marshal forces to tackle one problem than new challenges emerge—whether it’s the long-term and unknown consequences of climate change, or lifetime exposure to bioaccumulative and toxic chemicals.
And just as the battle shifts ground, so do the combatants. The old paradigms—if pollution is the problem, polluters are the enemy—seem simplistic and increasingly inaccurate. More than ever, industry and business are being cast as powerful allies, and not opponents in the struggle to protect our environment.
No doubt some corporate environmentalism is more superficial than sustainable. We’ve all heard the term “green-washing” to describe the heavily promoted
adoption of environmental values by some commercial enterprises. But to use another cliché, the smart money is increasingly aware that commitment to the environment and sustainability goals brings value to industry in the form of eco-efficiency that goes way beyond mere public relations.
Business will not, and cannot, sustain any activity that does not result in a positive return to owners and shareholders. The facts are that competitiveness drives success and economic competitiveness is increasingly being driven by environmental sustainability. This is being recognized more and more by forward-looking business operators. Investors and citizen-consumers are reinforcing this shift in the marketplace when they choose environmentally preferable goods and services.
Like all change, the adoption of environmental objectives by business can be messy, even chaotic. But the rapid adoption of sustainability goals by businesses and investors also presents a real opportunity to yield immediate environmental benefits on par with the hard fought regulatory successes of the past 20 years.
This edition of Trio profiles the CEC’s efforts to boost the environmental performance of small and medium-size enterprises in Mexico. In this instance we are working with some major corporations who, in turn, are supporting their numerous local suppliers—of everything from packaging to printing to raw materials—to change the way they operate in order to maximize both environmental and efficiency outcomes.
This project to green the supply chains of small and medium-size enterprises holds particular promise for Mexico, where such enterprises account for more than
90 percent of all companies. Obviously, improving
the environmental performance of this sector promises significant and widespread benefits.
Those benefits are both economic and environmental—resulting in savings in energy, water and material use, reduction of waste, streamlined performance, and an enhanced competitive edge. Under the right circumstances, effective environmental management systems can significantly help a company improve its environmental performance and its bottom line.
Unlike multinationals, with a recognized brand and market share, small businesses—especially the suppliers to those larger companies—are unlikely to change production methods simply to enhance their public reputation. These business owners must believe that more environmentally-friendly operations will create tangible value. In this instance, an important driver is a preference or requirement on the part of buyers.
This is where the CEC’s pilot project is targeted. When larger companies require, or encourage, their suppliers to adopt greener production methods, we hope to see real and widespread environmental impact. Working with four multinational companies in the pharmaceutical, cosmetic and consumer electronic sectors, and their suppliers—from small laboratories to printing plants—we are already seeing results.
At a recent meeting with the suppliers engaged in our project in Mexico, I heard directly expressed how, with changes in production, upgrading to new equipment and improved methods, these small companies are already seeing a positive return on their investment in terms of enhanced efficiency and lower costs, reduced resource use, lower production of wastes and emissions, improved regulatory compliance, and better relations with customers.
This is a pilot project, but based on the early results, I am excited at the potential environmental benefits we might accomplish on a greater scale.
The most stringent government regulations, the highest standards, the toughest enforcement, and the most lucrative incentives can only take us so far. If we succeed in making the business case for the most environmentally friendly means of production, and investors and consumers continue to support environmental goods and services, I believe we stand on the brink of widespread and sustainable environmental improvements in North America.
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