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Some forces that encourage genuine sustainable development by corporations are consumer demand, government regulation, and higher profit margins (due to lowered production costs). Consumers are increasingly aware of environmental issues, and are often more likely to buy a product from a company pursuing more environmentally friendly practices than another. For this reason it is sometimes in a company's best interest to adopt some of the practices in order to remain competitive in the industry. Government regulations force corporations to adopt more sustainable strategies, and are often accompanied by deals and benefits for companies that show greater willingness or ability to comply with or exceed expectations. Lastly, corporations will seek to find the cheapest way to get the highest price for their product. In some cases, the sustainable or environmentally friendly strategy is also the cheaper one. This is the ideal situation for a company: they can lower overhead (and increase profits), while advertising "green policy" to the public, and hopefully get some tax breaks from the government at the same time! These actions are not always easy to recognize, as it is often difficult to distinguish between truly sustainable policy and "greenwashing" by the company. But, some good clues to look for is if the company is advertising a practice that makes logical sense (such as eliminating paper) as both a cost reduction strategy and a more environmentally friendly one. Another way to recognize this is to look at independent evaluations of corporate policy, though you should be careful to be aware of possible media and political bias. In the end, this is not always that is something that is very easy to see, and may take some looking to get a straight and honest answer.
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Interesting post. This is a very important topic. While we as individuals have an effect on the environment, there is only so much that we can do. Corporations have such a large effect on sustainable development and the environment.
ReplyDeleteThe problem with corporations going green is that they need an incentive to do so. While some sustainable measures may be both 'green' and 'cost effective', companies have to also look out for their bottom line. The sad truth is that shareholders are more concerned with the performance of the stock then the 'greenness' of the company. If the company is spending lots of money to encourage sustainable practices, it will impact that companies bottom line, and anger the shareholders as profits won't be as high. If going green is going to hurt profits, companies are not going to go green because they have to answer to their shareholders.
There are two possible ways to encourage companies to go green. The first would be to have shareholders change their focus from profits to environmentally friendly practices. This is not likely to happen. This is more of a human nature problem, and I'm not going to address it, but humans are inherently selfish. They are out for whats best for them. If you have the choice between money (lots of it) or helping the environment, which would you take?
The second way to encourage sustainable processes is the have government regulation. This presents a couple of problems. First, there is not current government organization that regulates green practices. The EPA regulates emissions and products from companies (and their waste) they don't regulate policies inside of companies (paper, lighting, building design). Creating a body and giving them the power to regulate this things would draw a strong backlash, as this would look to many like the government overstepping its bounds and regulating the private sector. This is the second problem. This would represent the government regulating the private sector, something that really hasn't happened before. There would be a strong backlash against this, and it is doubtful that congress would pass any law in the face of strong public criticism. (Congressmen care about getting themselves reelected.) I personally don't know if I would even support the government regulating the green practice of companies, I think that it falls outside the government's sphere of regulation. However, I believe that something needs to be done to encourage green development and sustainable development.
I'd be really interested to hear your solutions to this dilenma. Great post bringing this issue up.
Everything you said is completely true. I agree completely that private companies are not going to change their ways unless there is some sort of incentive. This can come in many forms, of course, and as I discussed in the original post, these don't necessarily have to be what is typically thought of as a 'green' practice. There are many ways for a company to reduce their environmental impact without hurting their profit margins. In some cases they may even save money!
ReplyDeleteHowever, shareholders and customers are beginning to take an interest in the environmental impact of companies. Your point about people being selfish and wanting the highest profit is largely true, but depending on the industry and company, shareholders are willing to tolerate a certain amount of profit reductions if, and this is the important part, IF it helps the image and standing of the company with the public, or with the beliefs of the stockholders about the environment.
I'm with you in agreeing that the government could and perhaps should step in, but I am also not a big fan of government reaching into the private sector. The United States is all too familiar right now with what happens when the government gets too involved in private industry and tries to tell companies how to run themselves and how to spend their money. So a limited amount of regulation is required, but that is a very hard line to draw, and the debate then becomes,where to draw it? I don't necessarily have an answer for that right now, but trust me, it's something I think about a lot, and hopefully I'll have a better answer soon.
Something everyone will agree on is that something must be done. Whose responsibility is it to do that? I'm not sure. It falls somewhere between the individual, the corporation, and the government. Each should share part of the burden, but none should control the process entirely.
Hopefully I'll have more concrete solutions at some future date...