The question on everyone’s mind today is: How will the global economic downturn impact green and sustainability initiatives? The easy assumption to make is that the only green that matters in a recession is the kind that you can put in your wallet.
In my opinion, the recession may signal a real beginning for sustainability. Leaner times are moving industry past the marketing of sustainability -the faddish, feel-good “green washing” that merely scratches the surface- toward initiatives that deliver real and immediate operational benefits. Companies get excited about ROI and profitability. There are ample opportunities within organizations for sustainability initiatives to deliver just that.
Infor recently commissioned a survey of manufacturing companies in the UK. Over half of the survey respondents said they had no plans to postpone their green investments due to the economic climate. In fact, 56% said they plan to increase their investments over the next 12 months. Even for companies that don’t see a direct operational benefit, many are moving forward because of the business risk associated with doing nothing.
Stephen Stokes of AMR Research pointed this out on a recent Infor-hosted webinar, “Carbon Management: The Business Imperative.” Stephen is Vice President of Sustainability and Green Technologies at AMR, so he knows quite a bit about the subject to say the least. (I encourage anyone who needs a primer on the green transformation to download the webinar recording because Stephen offers many valuable insights.)
Stephen’s research (illustrated in the slides below) indicates that companies today are most concerned with real time costs, primarily energy. By 2010 though, risks from government regulations, carbon footprinting, and carbon trading grow significantly in the eyes of executives. Many of these same executives are moving now to stay ahead of legislation, which is already happening in places like the UK, Europe, and Australia.
What does all this mean for green technologies? In my opinion, it validates Infor’s approach from the beginning. Our view was that companies would invest in green technologies that provided tangible economic benefit and reduced business risk. These are primarily at the line of business level- energy efficiency in facilities, reducing fleet fuel consumption, reducing the carbon impact of your distribution network, and eliminating waste in manufacturing processes- through solutions like network design for the supply chain, enterprise asset management, and product lifecycle management.
Dashboards and corporate-wide reporting efforts are important, especially longer term, but these kinds of broad technology initiatives are the ones that will struggle during the recession, in my opinion, because they don’t directly address immediate business imperatives. It’s much easier to sell management on sustainability projects with a clear ROI, ones that impact the bottom line or eliminate business risk, and then build on those successes.
For these reasons, I think sustainability is poised for a new beginning. And the real champions of green through the recession will be the plant managers, facilities directors, and supply chain professionals rather the corporate vice president of sustainability.
Posted by Andrew Kinder, Director of Product Marketing, Supply Chain Management