How does ‘going green’ affect businesses?
By Sofia Arts Romero and Manon Goirand
To briefly introduce the concept of going green, it is defined as making more environmentally friendly decisions such as the basic 3 Rs, namely Reduce, Reuse, and Recycle. More specifically, by going green you agree to pursue knowledge and practices that may lead to more ecologically responsible decisions and lifestyles, which can help protect the environment and sustain its natural resources for current and future generations. But why is this so important now, and why are we seeing it now more than ever? As you may know already, we are in the midst of climate change and environmental degradation, which has been mainly caused by human activity. As you may recall from the journal ‘Destroying our planet is destroying our economy’, we acknowledge that businesses take on a huge responsibility when it comes to reversing climate change, and we have gone over some of the agreements that businesses have to comply with as part of government regulations.
As mentioned above in our last journal about the environment, we briefly talked about climate change agreements, such as the G7 and Paris Agreement, and how they impact the economy. They could lead to various positive consequences for businesses such as a wave of innovation in low carbon emissions technologies, creation of jobs, reduction of energy, cost savings, etc… However, what specific actions are companies taking to reduce their impact on climate change and environmental degradation?
The most important step to going green for businesses is controlling and reducing their greenhouse gas (GHG) emissions. This can be done by private companies that measure the carbon footprint. Once measured, the company can start tracking and finding solutions to reduce their emissions. Having the GHG emissions verified could benefit the company by positively affecting the stakeholders and showing possible customers where the company stands when it comes to the environment. Some of the simplest actions firms can take include going paperless (or substantially reduce paper use); reduce energy consumption, which implies actions such as turning off the lights when it is not necessary, reducing the air conditioning and heating systems in areas that are not very affected by it, or even unplugging unused devices; optimizing employee transportation in the hopes of increasing public transportation. These actions will not only reduce carbon emissions but it will also save some costs for the company (as less paper or energy will be used). However, other more important actions are not as simple as the previously mentioned ones. Reducing greenhouse gas emissions on itself already requires substantial amounts of effort, and switching to renewable energy rather than fossil fuels, reducing single-use plastic, and many other actions are more costly and effortful than we think. As more and more businesses are urged and acknowledge that these actions have to be taken immediately, they must also assume the consequences that these extra costs may have on their businesses. The real question, however, is whether or not these extra costs exceed the extra benefits from these activities. It has been shown that, in the short run, these actions incur many costs and efforts, which will of course affect the profit of these companies. However, in the long run, not only do they benefit from a higher reputation as a sustainable company contributing to corporate social responsibility, but also from less marginal costs in the future. For example, the car industry is moving towards electrification due to the arising awareness of the harms of Internal Combustion Engines (ICE). With electrification, extra costs for this implementation are necessary, such as arranging for Superchargers (charging machines for electric cars) in as many convenient locations as possible. Nevertheless, in the long run, these extra costs slowly start to positively contribute not only to the company or industry but also to the environment and society in many ways, such as reducing energy waste due to the implementation of renewable energy sources.
It is a long and costly process for businesses to go green, but hands down it shows benefits in the long run. The continuous progress made by companies towards environmentally friendly decisions are and will continue to show in the following years. It started with the various global agreements put in place (in 2015 and 2019), but this is only the beginning where consistency is the only key to making it work. From now on, only harsher and stricter regulations may be put in place to reverse the effects of climate change. This of course goes mainly to businesses, but It is also crucial to bear in mind that consumers play a role in supporting businesses to go green and directly impacting climate change. Consumers also have to be aware of the brands that they are supporting, and how these businesses are making a positive impact on the environment. Inform yourself of the businesses you support!
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