GN Focus | Green Initiatives

Green, 
the new corporate colour

Energy-saving measures are now integral to an 
organisation’s reputation, often improving profits

  • By Iona Stanley | Special to GN Focus
  • Published: 00:00 January 15, 2013
  • GN Focus

  • Image Credit: Supplied

The most confusing aspect of corporate social responsibility (CSR) is that it has long meant different things to different people. Milton Friedman’s highly influential article in The New York Times in 1970 proposed that an action counts only if it is unprofitable, and therefore altruistic. But in recent years, even advocates of altruism concede that most actions can be included in the list, as long as they are strategic. A pragmatic perspective therefore is to consider CSR actions as all those that are not required by law. Where implementation now differs is in its reach across employees, customers, consumers, communities and the environment at large.

In the past decade, the focus of corporate social responsibility has shifted from local interests towards more universal actions. This is being led by a combination of factors — real and perceived threats to climate and environment, new generations of correct and conscious customers, and savvier business leaders who are keen to avert conflicts rather than merely respond to them.

Organisations today are embracing a more sustainable approach to business that accounts for the societal and environmental impact of their activities. By virtue of this accountability, they are embracing new ways to source, produce and distribute goods in a sustainable manner, often while lowering costs, increasing profits, and promoting a more transparent and proactive engagement with stakeholders.

Green history

The concept of green corporate responsibility is not new. Some of the earliest suggestions were made in the late 1960s by authors Philip Kotler and Sidney J. Levy in Broadening the Concept of Marketing, and by William Lazer in Marketing’s Changing Social Relationships. Their ideas presented the realisation that since natural resources are not renewable, the relationship between marketing and its impacts should be treated as an ongoing process fuelled by communication and interaction.

In a contemporary approach, green responsibility takes on four dimensions, according to the IBM Institute for Business Value: environmental strategies, green branding, compliance management and cost-efficient sustainability. “Environmental sustainability is not merely an operational imperative for 21st century businesses, but is also an avenue for growth,” proposes their study Attaining Sustainable Growth through Corporate Social Responsibility. “Companies that develop environmentally sound strategies, initiatives and programmes will find new opportunities and value propositions — resulting in brand enrichment, improved regulatory compliance, enhanced visibility to investors and more.”

Around the globe, companies are interpreting this in varied and various ways. In a random example, Toshiba Corporation has implemented green policies into all aspects of its operations — notably through its Environmental Vision 2050, and Factor T environmental impact indicator. Its 360-degree approach involves pursuing policies, programmes and practices that are not only effective today, but help the planet in the future, and covers product design, life cycle planning, manufacturing, packaging, logistics and local facilities management.

In another unusual example, Nascar has one of the largest and most successful recycling and environmental sustainability programmes in the US. “Green has become a part of the fabric of our sport. We have 67 million fans who are deeply passionate and really care, so we have got a tremendous stage here,” Michael Lynch, Nascar’s managing director of Green Innovation, said at the fourth anniversary of the programme’s launch last November.

Corn for cars

Since 2008, Nascar Green has developed effective partnerships with Coca-Cola, Goodyear, Sprint, Coors, Creative Recycling and Green Earth Technologies, and their efforts have developed a concrete connection between the tracks and what fans can practise in their own homes. For instance, the renewable, low-carbon fuel Sunoco Green E15 was blended with 15 per cent ethanol from US-grown corn and introduced to Nascar racing in 2011. Within a year, the touring series completed over three million miles in some of the toughest conditions possible.

The official fuel of Nascar emits 20 per cent less greenhouse gas than unleaded gasoline without sacrificing horsepower, and this message clearly filters down to the large fan base.

As more companies adopt international standards and invest in their own, it is right to assume that CSR has begun taking on shades of green.

Organisations in the UAE, however, have to focus on their roles in reducing the country’s footprint and tackling climate change by saving energy and water. According to data from the 2008 Ecological Footprint Initiative, the private sector and industry contribute 30 per cent to the UAE’s high ecological footprint, and the majority is associated with carbon emissions due to energy and water consumption.

In May, the Emirates Wildlife Society organised a workshop in Abu Dhabi, in association with WWF’s (EWS-WWF) Heroes of the UAE Private Sector Programme, for companies based in the capital. The focus was on sharing practices and proposing solutions for energy and water reduction.

Leading by example

The Dubai Chamber is doing much to challenge companies to improve their environmental performance as part of their CSR. As a lead participant at the 9th CSR Summit 2012 held in June, the organisation was at the fore of numerous discussions on locking CSR into 
core business.

The Chamber also leads by practice: Between 1998 and 2008, it implemented numerous initiatives to reduce water and energy consumption by 77 per cent and 47 per cent respectively, leading to savings of around $1.93 million (about Dh7.08 million). Originally focused on water and energy efficiency, waste management and recycling was added in 2007, and green transport and purchasing in 2008. In 2009, the Dubai Chamber head office became the first Leadership in Energy and Environmental Design (Leed)-certified existing building in the region, demonstrating that greening can be accomplished without major investments. Since then it has doubled productivity per square metre and helped increase staff satisfaction from 72 to 93 
per cent.

At a national level, the Global Green Growth Institute (GGGI) has signed an agreement with the UAE’s Ministry of Foreign Affairs to develop a green growth plan (GGP) tailored to the country’s specific economic and environmental conditions. GGGI’s primary objective is to partner with multiple levels of government and with external institutions to help develop a robust GGP and implement this at national and local levels.

More specifically, the GGP will foster policies and governance of green growth strategies, including a regulatory framework. All these objectives will be pursued in conjunction with the overall planning for green growth in the UAE. The ultimate aim is to facilitate a complete transition of the nation towards a green society. Until then, every company has a role and a responsibility, and it is 
distinctly green.

Increasing scope

Tim Mohin, author of 2012’s hugely successful Changing Business from the Inside Out: The Treehugger’s Guide to Working in Corporations, says the relentless march towards globalisation will continue to stretch the scope of corporate responsibility. “For instance, the new conflict minerals requirement in the Dodd-Frank Financial Reform Act breaks new ground for the scope of corporate responsibility, by requiring many types of businesses to track four minerals back to their sources to ensure they don’t fuel conflict in the minefields of Central Africa. As this and similar requirements arise, the trend is clear: CSR leaders will be increasingly accountable for responsible behaviour all along their supply chains.”

Mohin uses his extensive experience at the US Environmental Protection Agency (EPA), Intel, Apple, and AMD to provide advice to not only those seeking to enter the sector but also to seasoned CSR professionals. His book covers crucial areas that need to be considered when implementing successful environmental and governance initiatives.

— I.S.

GN Focus