Tuesday, October 28, 2008
Environmental Responsibility vs ROI…Is There a Balance?
Green is truly the new black on the American business balance sheet. We read almost daily announcements citing Fortune 500 companies and small, but well funded, start-ups engaging in new green initiatives, all speaking of exciting technologies and strategies rapidly becoming a part of daily life. Fueled by the ever-increasing consumer demand for sustainable products, companies are seeking to couple environmental and social responsibility with an enhanced bottom line. Recent surveys by Intellitrends, LOHAS, Bentley College, and even Sun Microsystems share the consensus that going green is not a fad, but a new trend in business. While it may seem everyone is going green, the truth is only a fraction of small and medium size companies, including financial institutions, are actually participating. The question is, with all the survey evidence and news coverage, why wouldn’t a financial institution just jump in and go green?
The answer is two-fold: Cost and Education. While we all read about industry giants including GE, CitiBank, and Navy Federal Credit Union investing heavily in major projects and initiatives, the same numbers are simply far out of the reach of even the most well established small to medium size institutions. Such extreme proposed investments are also made more difficult during a slow economy. Watching the industry giants build new LEED certified buildings, construct wind farm installations, or invest in Bio-Fuel research and technologies, while impressive, creates an uninspiring mood for smaller institutions, and helps to widen the gap between “the big boys and the little boys”. As a result, a huge market segment of financial institutions is becoming rapidly excluded from the going green efforts. This group, comprising more than 90% of active community banks and credit unions is mistakenly being led to believe that Green requires green.
What most institutions do not realize is that they can initiate small-scale and far less expensive changes to their own business practices, while still realizing financial savings and increased profits through becoming community leaders in environmental sustainability. We have all read how a homeowner can make a simple change from incandescent to CFL bulbs that will save thousands of watt/hours per household, and provide a long term savings return on the initial investment. Such an example of a transitional change also has indirect benefits: the CO2 reductions due to lower power requirements as well as a waste stream reduction (CFL’s last 5-10 times longer than incandescent bulbs). Now imagine this homeowner passing on that knowledge to their friends and family. Small investment = large returns.
In coming issues we will provide ideas that any size financial institution may embrace to affordably journey towards becoming models of environmental leadership. Readers can expect to learn about various strategies covering methods of capitalizing on the emerging green marketplace. We will also examine the “dark side” of the new green industry, now called “greenwashing”, and some tips on how to recognize the specter of false promises and keep your institution’s image truly green.
Joseph Winn is the President/CEO of GreenProfit Solutions, Inc. which assists businesses in becoming environmentally responsible. You may view their website at http://www.greenprofitsolutions.com or e-mail Joseph at jwinn@greenprofitsolutions.com.
Photo credit: HaMeD!caL on Flickr