Now that Earth Day's done, let's talk about how we can profit from the planet.
Perhaps this sentiment isn't politically correct at a time when, well, we've profited from the planet to the brink of self-extinction. But if we ever want to make corporate actions a powerful, self-reinforcing agent for driving sustainable change, we may just need to reframe the discussion.
In other words, we need to start talking about R.O.G, or return on green. And explore how we can make good stewardship of the environment a clearly profitable venture.
As a consequence, there are still legions of CEO's who regard sustainability as an interesting byline. They think corporate social responsibility is important from a marketing perspective, but needs to be kept away from the serious business of making money.
In short, they don't see the R.O.G.
So how to reframe the discussion? Perhaps the following three points would provide good building blocks.
Green = efficiency. Efficiency = immediate savings.
Use less energy to make widget, you save money. Waste less materials to make widget, you save money.
This self-evident truth has been coined eco-efficiency, and it's the new byword of the corporate sustainability movement. In fact, IBM just hosted the Global Eco-Efficiency Jam, a two-day online event where corporate leaders participated in discussions focused solely on driving efficiency.
Case studies for eco-efficiency abound: Interface saved over $200 million from 1996 to 2002 through sustainability efforts; Dupont saved over $400 million in 2000 due to resource and productivity improvement; in five years SC Johnson increased production 50%, cut waste 50%, and saved more than $125 million.
They're numbers that build a strong case for ROG. Especially in today's economic climate.
Triple the input cost, triple the green innovation.
Innovation is closely linked to efficiency. As such, it plays a key role in attaining R.O.G.
But how do you find the low-hanging fruit ripe for eco-efficient innovation? By finding the areas most vulnerable to price fluctuation. Areas like energy and raw materials.
Pose this challenge to your organization: assume every energy source, every raw material, every input, suddenly triples in price. We know consumers won't pay more. So how do we stay in business?
The answer is aggressive innovation. Innovation that not only boosts efficiency and creates real, measurable payback, but helps differentiate your company. It may even get you press - helping reduce your marketing expense.
If it is not about winning, why do we keep score?
'What gets measured gets managed' goes the old saw.
You're embarking on a voyage of eco-efficiency. You're tripling the cost of your inputs. Now you have to measure your current, and steadily improving resource usage.
But what happens when you not only measure that usage, but share the information with suppliers, line managers, business units? Even better, what happens when you hand out prizes to teams that make the numbers move the farthest in the right direction?
What happens is competition, plain and simple. And nothing builds business like healthy competition.
R.O.G. Bringing it all together
R.O.G. is, in the end, about thinking inclusively.
For too long, the concepts of economic return and ecological responsibility have been divorced. As a result, we thought you could have one or the other, but never both.
In order to engage as large a segment of the corporate community in green innovation, we need to clarify that this is an 'and' issue, not an 'or'.
Not only is it possible to profit from green innovation, it's essential.
Marc Stoiber is VP Green Innovation at Maddock Douglas, a leading innovation agency based in Chicago. Stoiber works from Vancouver. Special thanks to Roy Johanson of Maddock Douglas for contributing to the article.
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