As the economy remains shaky, many business leaders are continuing to focus most of their attention on profits, placing all expenditures under the microscope. Some leaders are questioning the investment value of environmental responsibility, or "being green," but consider this: green can be profitable. According to recent data, it may be exactly what it takes to get and keep businesses in the black.
A recent book, "Force of Nature: The Unlikely Story of Wal-Mart's Green Revolution," explains how Wal-Mart's profitability is supported by its green initiative.
Moreover, a number of recent studies demonstrate the positive financial outcomes of company environmental efforts. For instance, companies around the world have been able to reduce costs by changing their practices -- limiting travel to reduce emissions, cutting down on packaging materials and minimizing waste to name a few.
But beyond the benefits to an organization's profitability, there are other immediate positive outcomes from environmental responsibility. For one, it's the best way for businesses to serve society. There's an opportunity to "do good while doing well," creating jobs and improving the environment.
Wal-Mart is a prime example of an organization focused on the financial impact of its sustainability programs. The company is often in the news with stories about its ability to cut down on packaging, improve the fuel efficiency of its trucks and reduce its carbon footprint. But Wal-Mart isn't the only corporation that sees the connection between profitability and green programs. UPS and PepsiCo have also shown that sustainability programs can pay off, launching green labeling for eco-friendly packaging and PepsiCo's "Dream Machine."
Some other companies, like Patagonia and Whole Foods, have moved sustainability beyond programs to create organizations that are focused on sustainable effectiveness and the triple bottom line -- profits, people and planet -- in the way they measure their performance, budget, operate and make investment decisions. As I stress in my recent book, "Management Reset: Organizing for Sustainable Effectiveness," sustainability programs and one-off initiatives are not enough. Organizations need to be designed to be "sustainably effective."
As more businesses show the tangible benefits of "going green," it's my hope that other executives will commit to sustainable effectiveness -- structuring their organizations in a way that supports the triple-bottom line. After all, it is these same businesses that will win out in the long run as they serve society best.
Cross-posted from Forbes.