I received a few interesting responses to my last blog posting so I thought it may be fun to keep the dialogue going. The comments I received are pretty consistent with what I hear from many friends and colleagues here in the Bay Area – namely that companies need to be regulated in order to really take progressive, proactive action on social, environmental and labor issues. In particular, I believe most folks feel that companies need regulation to take meaningful action on global warming via hard-hitting new regulation on energy usage and GHG emissions reduction. While I think there is some truth to the fact that companies do need to be “motivated” by regulation (a.k.a. the “cattle prod approach”), I also see companies taking proactive steps independent of regulations, and I think that this should be acknowledged. I also think that such proactive steps if/when taken for the right reasons represent our best shot at truly meaningful, lasting, long-term change.
At my company, Aravo, we speak with Fortune 500 firms on a daily basis about their sustainability initiatives, priorities and plans. While I will acknowledge that carbon management is typically number three or four on the priority list at this time, it does appear on the list. We see our clients and prospects – including leading firms such as Ford, GE, Google, Citigroup, Best Buy, and Caterpillar – actively seeking our advice and guidance as they plan and implement a range of sustainability programs. Key areas we see firms focusing in on include toxic substances management, green sourcing and procurement, supplier and factory audits, waste management, and, yes, carbon footprinting and GHG management. In only one case presently can I identify the client or prospect acting out of a need to meet the needs of regulators, and all the rest are voluntary. (Of interesting note is the fact that the one regulatory client is responding to EU regs around toxic substances rather than US).
I am particularly impressed by the senior sponsorship sustainability initiatives typically receive within these enterprises. In many cases we are dealing with C-level executives, and in nearly all cases we are told that the client or prospect’s management team and Board are closely tracking sustainability program development and deployment. As I think about this I credit IBM, GE and Wal Mart with a lot of this momentum inside companies. Each of these firms has taken the position that sustainability is good for business and the bottom line rather than a burden to be dealt with. For example, Wal Mart stands to save billions of dollars by reducing packaging; GE sees immense opportunity for a variety of green products ranging from locomotives to home appliances to HVAC systems; and IBM, through its Big Green initiative, sees huge new markets for technologies that help companies and municipalities gather, analyze and act on a variety of sustainability-related data. These leading firms take a very different, and far more capitalist, approach to sustainability versus standard regulatory “command and control” systems.
All of the above said, I very much agree with some of the comments I have received that many companies will require firm, clear regulations in order to take meaningful action on carbon reduction and energy conservation. I simply argue that the best companies, the companies who really “get it” are currently showing signs that they are out well ahead of regulations and intend to capitalize on the sustainability “sea change” to their benefit rather than view sustainability as a burden to be managed.