The energy-efficient, low-emissions 2008 Toyota Prius has helped make Toyota one of the greenest consumer brands. Photo credit: Toyota

A new business reality has gained much attention these past few years: Being “green” has been demonstrated to help drive operating performance, increase revenue and enhance brand value.

Numerous examples of success exist, both in budding entrepreneurial firms as well as in established multinational corporations.

This inaugural column will take a broad view of new green business practices and why they make excellent business sense for many companies. Future columns will explore best green practices, provide readers with case studies – what works and what doesn’t – and provide insights into rapidly changing opportunities in green business practices that can enhance their triple bottom line (i.e., financial, economic and social performance).

Defining ‘Sustainability’
Companies are finding that by greening their businesses, they are creating desirable opportunities that can be measured, and are simultaneously mitigating certain business risks. By examining their businesses through the lens of sustainability, companies, such as Wal-Mart and General Electric (GE) are enhancing their competitive advantage in a world where natural resources are increasingly expensive and scarce.

So, what is “sustainability?” The most business-friendly definition comes from the Dow Jones Sustainability Indexes (DJSI), which states that corporate sustainability is “a business approach that creates long-term shareholder value by embracing opportunities and managing risks deriving from economic, environmental and social developments.” What does sustainability or being green mean for a business? Being green involves proactively managing the environmental and social opportunities and risks of your business to enhance shareholder value. In essence, “greening” your company is a factor that advances financial performance.

Leaders of the Pack
Let’s take a look at greening initiatives taken by several multinational companies that have been leading the charge:

• GE: GE’s Ecomagination brand was created to bring together the company’s green products from its diversified business. A variety of products, including aircraft engines, wind turbines, desalination plants, low-energy light bulbs and new materials (including greener plastics) have been incorporated in the Ecomagination campaign. Recently, GE announced an increase in revenue from its Ecomagination environmental products and services from $6.2 billion in 2004 to $10.1 billion in 2005, supporting CEO Jeff Immelt’s 2005 assertion that “green is green.  

“With oil prices and other energy costs surging and water scarcity concerns spreading, Ecomagination makes even more sense for our investors today than it did a year ago,” Immelt told Financial Times.

Furthermore, GE found a smart way to respond to citizens’ increased awareness about climate change: The company announced it would launch the first credit card in the nation aimed at encouraging consumers to curb polluting activities. A dollar of carbon offsets will be purchased for every hundred dollars spent.

• Wal-Mart:  Wal-Mart’s “Sustainability 360” campaign is one of the largest drivers in today’s greening of businesses. The campaign focuses on extending sustainability beyond Wal-Mart’s direct environmental footprint to engage associates, suppliers, communities and customers. Wal-Mart recently launched its “Sustainable Value Networks,” which are prompting tens of thousands of companies in its supply chain to achieve measurable sustainability objectives in renewable energy, waste reduction and the retailing of greener products.

• Toyota: The success of Toyota’s energy-efficient, low-emissions Prius model is nothing short of astonishing. Tremendous demand for these cars is a factor that contributed to Toyota becoming the largest automobile manufacturer in the world in 2007. Prius has earned many accolades, including its selection by Consumer Reports as the “Top Green Car Pick” in 2007, an honor held by the model six of the past seven years. By building a car that achieves 55 miles per gallon and earning an Advanced Technology-Partial Zero Emission Vehicle rating, Toyota has increased sales and simultaneously strengthened its brand value. In fact, a study by Landor Associates revealed that consumers consider Toyota to be one of the greenest consumer brands.

• U.S. Climate Action Partnership (USCAP): Businesses are banding together to address climate change. One of the drivers is to establish some certainty and consistency with respect to emerging climate regulations. Another driver is that if positioned thoughtfully, businesses can reap financial benefits as they reduce energy use and carbon emissions.    

USCAP was recently formed by several highly esteemed U.S.-based companies, such as Alcoa, BP America, Caterpillar, Duke Energy, DuPont, FPL Group, General Electric, PG&E and PNM Resources, and four leading environmental organizations: Environmental Defense, Pew Center on Global Climate Change, Natural Resources Defense Council and World Resources Institute. USCAP calls on the U.S. government to quickly enact strong national legislation to achieve significant reductions of greenhouse gas emissions. Several of these companies, such as BP and GE, will benefit by promoting alternative energy technologies that reduce greenhouse gas emissions. By encouraging the government to adopt climate regulations, USCAP can secure significant business benefits for companies that create new products and services to respond to climate change.

Why Go Green Now?
What has profoundly changed in the world in recent years and what are the important green business drivers today? Here are a few thoughts that can help you address the questions, “Why go green?” and “Is this a fad or a bubble?”

Constraints on water and materials resources, soaring energy prices, consumer preference for green products, stakeholder activism, and the rise of socially responsible investing (e.g., Calvert Funds, Domini Funds) are all coming together at the same point in time and increasing the demand on businesses to reduce their environmental footprints and develop green products. There is also strong demand by stakeholders to be constructively engaged in the process.

These business drivers will not disappear; in fact, they will become ever more potent as businesses discover that green drivers can increase profits. Hence, the old paradigm that environmental initiatives are a net cost to businesses is being replaced with the new realization that being green creates value and business opportunities.

The business case to be green is clear. In the coming months and years, we will learn much from strategies of business leaders who are creating the new business paradigm, such as GE, Toyota and Wal-Mart, and who are leading the way today. In the next issue, I will discuss how your company can capitalize on being green.  

William Sarni is a founder and CEO of DOMANI Sustainability Consulting LLC, with 30 years of environmental consulting experience. He can be reached at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .