Balancing green goals and short-term gains
In an article in this week’s Newsweek International entitled, Green Is as Green Does, Jeffrey Garten, a professor at the Yale School of Management, finds corporate actions to reduce emissions at odds with Wall Street’s show-me-the-money-now ethos.
According to Garten, green initiatives like A Call to Action pushed by a coalition of companies including DuPont, Duke Energy and Alcoa are “less leadership than self-defense.”
“These coalitions will not last,” he contends, “because industries such as oil, autos and agriculture companies will soon be at one another’s throats vying for tax breaks and subsidies.”
Shareholders will also inhibit progress, he says, noting that, “last year, the tyranny of quarterly earnings reports was cited by 76 percent of a Business Roundtable sample of CEOs as a great inhibition to research and other activities necessary to create value for the long term.”
But the notion that companies banding together to press for comprehensive green policy from the federal government will soon be at one another’s throats or that the tyranny of quarterly earnings will crush their efforts is speculation on Garten’s part. Garten himself points out that General Electric plans to expand research on green technology from $700 million in 2005 to $1.5 billion by 2010, and that a group of pension funds with at least $200 billion in assets has just put Exxon, Wells Fargo and several others on a blacklist for substandard environmental efforts.
But he’s right when he says, “companies will have to demonstrate how their environmental policies create shareholder value in the short term as well as the long.” And that may be where nanotechnology and biotechnology can make a difference. The responsible use of nanotechnology and biotechnology can help bridge the gap between long-term good and short-term gain.
Let’s not forget that President Bush has called for reducing gasoline usage in the US by 20 percent in the next 10 years, requiring 35 billion gallons of renewable and alternative fuels in 2017. Other lawmakers have been even more aggressive, as in the case of HR 969, the bill introduced to the US Senate last month that would require utilities to generate 20 percent of their electricity from renewable resources such as solar, wind, geothermal and crops by 2020.
Regulations like these will put intense economic pressure on corporations to meet stringent green goals, and force them to implement technologies that satisfy those goals along with short-term economic gains.
Numerous sources, including the United Nations Global Environmental Outlook Yearbook 2007, agree that nanotechnology has the potential to deliver great environmental benefits both in production processes and in products.
“The use of nanomaterials to increase energy efficiency represents a major global opportunity,” adds Cientifica research director Hailing Yu in an article in last week’s IndustryWeek entitled Nanotechnology For Sustainability. Biotechnology offers similar promise through biofuels, as former congressman Jim Greenwood, President of the Biotechnology Industry Organization, said in an interview this week with Green Technology Forum.
Garten says that U.S. firms worry that European companies, under stricter regulatory pressure from the EU, will gain a competitive advantage when the world eventually adopts tougher approaches to climate change. He also believes few U.S. firms will figure out how to make being green a tangible competitive advantage. That’s where a research and advising firm like Green Technology Forum can help. We’re here to help corporate leaders take advantage of the benefits of responsible nano- and biotechnology, and to help them understand their risks. We can help you achieve your long-term green goals as conscientious corporate citizens while meeting shareholders’ and customers’ increasing calls for green processes and products and regulators’ increasingly stringent environmental requirements.