The Strengths of Green Business

Markets are plunging as investors become more afraid that a global recession will affect company earnings.

Does sustainability have anything to do with successfully weathering an economic downturn? HaraBara suggests companies think about these facts:

• The companies that are better-managed and serve their customers needs will emerge from the downturn stronger than their competitors who do not. Anybody can be at least somewhat successful in a booming economy, but a recession winnows out the less-well-managed players. This is a chance for some companies to emerge as leaders in their segments, leaving others behind.
• Green pressures will not go away. Some government spending on promoting green solutions may be reduced, but regulation will continue to tighten and consumers will continue to be influenced by green concerns. ("BRUSSELS, Oct 7 (Reuters) - EU lawmakers voted on Tuesday for such strict carbon curbs on power plants that, if enacted, they would rule out coal power from 2015, unless fitted with untested carbon-trapping technologies.") Crisis or no crisis climate change remains an issue.
• Although oil prices have been falling in anticipation of reduced demand growth, policy decisions will continue to keep underlying energy prices high. And when economic growth resumes companies which are more energy-efficient will be at a significant advantage.
• Most of the actions that businesses take early in their process of going green are improvements in energy efficiency. Most companies can reduce energy costs by 15-30% by relatively easy green adaptations. In a downturn price competition will become more intense, so these savings are competitively very important.
• Many aspects of green demand are already embodied in statutes and regulation (examples: RoHS, WEEE, REACH). These will not be relaxed even if the economy is less boyant. Similar requirements will continue to be imposed in many countries.
• With a new administration we expect the United States to try to catch up with other industrialized countries in green policies and regulation, such as cap-and-trade programs, energy efficiency requirements and the like. This will significantly boost demand for products needed to comply with these new standards.
• Companies which have started going green will continue on that path. In recent sales reports from U.S. retailers Wal-Mart eked out a 2.4% increase in same-store sales, one of the few big retailers to show an increase. Wal- Mart is one of the most aggressively greening companies in the world. Most of its green initiatives have been focused on reducing costs, and such initiatives will continue. It will continue to lean on its suppliers.
• Efforts to reduce waste will continue, including recycling, waste heat recovery, design efficiency and biomass energy. The economic value of such projects is substantial, and some may earnCDM credits.
• If tighter government budgets slow investment in infrastructure, especially in renewing and extending the electricity grid, off-grid power sources such as solar, biomass, energy storage and wind will continue to be developed for electricity-starved markets.
• Water use efficiency will continue to be a relatively strong market.
• Water treatment technology will continue to be very important as a public health and water conservation measure. An economic downturn will have little or no effect on India's water problems, for example.
• The lodging industry, especially hotels catering to foreign visitors, will be under continuing pressure to offer green amenities.
• Companies forced to reduce travel budgets to cut costs will make increasing use of greener alternatives such as telecommuting, web conferencing, e-commerce, etc.
• More cost-effective (and low-carbon) promotional activities (e.g. web portal listing instead of trade shows) will continue to gain ground.

Green products, services and technologies may perform better in the current economic environment than many other segments. For more information, contact This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

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