Does "green" really matter?

By Sarah Sorensen
June 23, 2009

The subject of "being green" can create emotions akin to those that bubble up when talking politics or religion. It can quickly devolve into talks on the melting ice caps and diminishing polar bear habitats, which may or may not be productive. The difference is "green" has a definite role in business, while politics and religion are probably best left outside the board room. Why does "green" matter? Setting aside issues around climate change - which is often where religious debates occur - from a practical standpoint, there are real business implications.

For starters, energy is a non-trivial operating expense, so reducing energy consumption can help reduce costs and free up resources that can go straight to the bottom line or applied to revenue-driving initiatives. In that same vein, when an organization pays attention to its energy consumption it is often able to identify and then rectify cascading operational inefficiencies.

Organizations may find that the legacy equipment or hodge-podge of devices that have proliferated over time present opportunities not only to reduce energy consumption, but also better leverage resources and maximize investments overall. By retiring equipment, integrating devices and collapsing layers in the infrastructure, organizations can achieve economies of space, power and cooling, as well as the simplification of their operations that reduces ongoing maintenance and management costs. And considering it is estimated that most IT departments spend 70 percent of their time on "lights on" activities, it's easy to see the impact that any resource savings can have in tipping the scales toward greater innovation.

Pending legislation is most likely going to force businesses to pay attention to "green" issues, whether they want to or not. In Japan, which has committed to achieving carbon dioxide emissions 6 percent below 1990 levels by 2010, businesses have already been adjusting to operating under carbon caps, which often relates to their overall energy consumption. And there are plenty of indications that the new U.S. administration will create legislation to force emissions reductions, whether it is a cap and trade system, a carbon tax or some other mechanism is still to be determined. (See Environmental Leader for a good summary on some of the proposed legislation)

Finally, there is the non-trivial people aspect of being "green." The fact is to attract and retain top talent, companies need to be mindful of their impacts on the environment and do what they can to reduce them. No one wants to work for "that monster" of a company that's known for dumping waste into the river. For those companies that don't do their own manufacturing, it may seem as though there is little at stake, but employees and customers are increasingly mindful of how an organization monitors and manages all of their impacts. These include those under their direct control, within their own four walls, and those that are part of their extended influence, such as partners and those organizations that make up their supply, manufacturing and distribution chains.

Don't believe it really matters? Just ask someone from "generation Y" and you will most likely get a diatribe on how important it is to work for a company you can respect and that respects the world we all share. Just look at the study of MBA grads - the very bastion of business and enterprise - which found that a vast majority (97 percent) said, all things equal, they would forgo some financial compensation to work at a company they believed to be more socially conscious and responsible.

So, like it or not, to be competitive, businesses are going to need to be mindful of "green" and have some of the hard discussions around how they are going to approach their impacts, tackle potential problems and work to leave the world they operate in just as they found it, or better yet - improve it. And for the record, I like it!

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