Green Initiatives: Short and Long-Term Profitability Issues

By Kathryn Kobe
Vice Chair, NABE Manufacturing/Industry Roundtable
Director, Price, Wage and Productivity Analysis
Economic Consulting Services

The panel discussed various pressures on businesses related to the “greener” philosophy of many of their customers and the “green” policy initiatives being considered at all levels of government here and abroad.

Andrew Aulisi, director of World Resources Institute’s Markets and Enterprise Program, gave a general overview of a number of green issues likely to become evident in coming years.  Growth in global output and exports have produced more complicated supply chains and businesses sometimes are not even aware of where all their inputs  are produced or the potential “green” issues that might be encountered.  He used the Millennium Ecosystem Assessment from 2005 to detail the areas of the environment that are considered to be under pressure or whose quality is declining as a way of illustrating issues that businesses might encounter.

While a reduction of carbon is at the forefront of recent policy discussions in the United States, nitrogen pollution, water scarcity, and air pollution are also likely to be issues worldwide in the coming years.  As politicians around the world begin to make policy related to these issues, businesses will have a wealth of decisions to make.  One example of the new type of decision making that may be necessary is that the owners of forests will have to decide what kind of an asset those are when the policies that could be enacted will treat them as a carbon offset or renewable fuel source rather than just a raw material for paper and furniture.

Climate Change, Energy Issues Drive Policies

Lisa Jacobson, executive director for the Business Council for Sustainable Energy (BCSE), reiterated that there was a major change in the interest in climate and energy issues during the past few years at the local, state, and federal level. The move toward federal regulation on carbon emissions is accelerating with recent legislative proposals being more aggressive than the ones in the past.

BCSE promotes a broad-based approach and considers getting international cooperation to be a key to achieving the goals in the end.  Even with a strong and consistent price signal, it will be necessary to have complementary government policies to promote the transition to a less carbon-intensive system. She discussed the details of several of the current bills that are being discussed in the Senate. However, the House has not really begun crafting its own bill, and it will probably be at least the next Congress before any of these could become law. Therefore, she urged businesses to become involved in helping craft the bills by discussing their concerns with their representatives in Congress.

Miranda Anderson, Wal-Mart’s director of Corporate Affairs for Sustainability, discussed the company’s sustainable value networks. These are focused on three major areas: purchasing 100 percent sustainable energy, creating zero waste, and selling products that sustain the environment and resources. These cover four major areas: 4,000 stores, 61,000 suppliers, their customers, and their employees.

She provided examples such as turning trash into income rather than paying for trash removal.  Plans for new stores include sustainable energy that is appropriate for the region, such as solar panels in desert areas. She provided a couple of examples of how Wal-Mart was reducing the packaging and thus the waste produced by the products it sells. She said that more information is available on www.walmartfacts.com.