Category: Business Impact of Green

The fundamental challenge to address the climate crisis in a market-driven economy is that the cost of climate change is not included in the economic transactions that contribute to it.  In the wake of super storm Sandy, there is increasing awareness and acknowledgement that global warming has a significant, measurable cost.  (See previous post.)  However, the challenge is that our buying decisions are distant from those costs.

Collaboration is one way to bridge the gap between purchase decisions and their impact on the environment.  As a recent article in the Guardian points out, “Collaboration is widely acknowledged as vital if we are to address global challenges at the scale and speed we need…”

While governments and companies are often countervailing forces in many respects, collaboration between them will likely be helpful and perhaps necessary to align the profit motive with actual costs borne by the public due to environmental impacts.  An example, in my mind, is refundable deposits on disposable drink containers.  While some may see this as government intervention rather than collaboration, once the intial jolt is past, this has beneficial impacts without too many downsides.  This doesn’t impact the actual price of the product, since the consumer may (although doesn’t always) redeem the container for the initial deposits.  Most supermarkets provide machines which can process the returns.  “Studies show that beverage container legislation has reduced total roadside litter by between 30% and 64% in the states with bottle bills.^[2]…and that the recycling rate for beverage containers is vastly increased with a bottle bill. The United States’ overall beverage container recycling rate is approximately 33%, while states with container deposit laws have a 70% average rate of beverage container recycling. Michigan’s recycling rate of 97% from 1990–2008 is the highest in the nation, as is the state’s $0.10 deposit.^[3]”

Charities and companies often collaborate and the article speaks to those that have worked well by targeting a single issue such as Coca-Cola and World Wildlife Fund on water stewardship.

Certifications can often best be done with the use of a non-profit such as the Forest Stewardship Council for wood and paper products or the Marine Stewardship Council for seafood.  Office and building supply manufacturers and retailers can then opt to offer products which meet third-party standards without investing undue resources in research and self-certification.

The article also points out Starbucks cup recycling is an excellent example of collaboration for sustainability.  “the company’s starting point was to convene all the players in the system.  Government officials, suppliers, manufacturers, retail and beverage businesses, recyclers, competitors, conservation groups and academics were brought together to develop an approach that worked for Starbucks as well as the food service sector as a whole.”

The conclusion is that competition in the marketplace will give consumers the opportunity to reward those brands that implement practices with which they agree.  But “The idea that traditional adversaries can realise greater benefit by upholding common environmental and social standards, rather than by competing on them, seems to have come of age. If our 800 sustainability professionals are to be believed, company-led collaborations may really start to move the dial if they focus on a single systemic problem, actively engage the public sector, and seek to learn from and build on what has worked before.”