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Companies Go Green and Reap Rewards

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Companies Go Green

Companies Go Green and Reap Rewards

July 30 2015, 09.19am GMT


The Green Revolution has found fertile ground amongst corporates and is growing rapidly in the face of the realization of the importance of protecting the environment.

The constantly increasing global population means that more and more resources are needed. The world's natural resources have continual and growing demands placed on them while the management of these resources is neither uniform nor directed to efficient extraction, use or maintenance. The fact that these resources are finite seems finally to be taken to heart by industries with an increasing use of renewable resources.

Examples of the new corporate trend are the fact that United Airlines’ planes will be using fuel manufactured from household trash while Hewlett Packard Co. is committed to using wind generated energy. Using a different, but no less important approach, multinational food manufacturer, General Mills, has announced a program to protect bees from pesticides. This is being done in the realization of the importance of bees in the fertilization process to ensure optimum production of food crops.

While the cynics might say that these efforts are motivated by short-term sales hikes, any focus on environmentally friendly practices must have a long term effect, however small.

George Favaloro, managing director of PWC'S Sustainable Business Solutions practice, says sustainability “is proving to be an area where companies can create business value. It doesn't have to be a cost; it doesn't have to hold back a company.”

According to a Harvard Business School study, originally published in 2011 of 180 U.S. companies, businesses classified as “high sustainability” - those that had voluntarily implemented sustainability practices - were found to outperform those classified as low sustainability.

A 2013 Nielsen survey conducted among 30,000 consumers from 60 countries revealed that 42% of those surveyed in North America said they would pay extra for foods from sustainable companies. This is a 7% increase from a similar survey conducted in 2011.

Generation Y, which comprises the largest living generation in the U.S. make up about 51% of those willing to pay more for sustainable products. They also make up 51% of those who check wrappers for environmental impact labels and 49% of those who would prefer to work for a sustainable company.

Meanwhile, Hewlett Packard last week announced a 12 year partnership with wind energy provider SunEdison (SUNE, -0.97%) to provide enough energy to power the company's Texas based data center for operations.

Troy Ault, director of research at CleanTech, a corporate sustainability network, said, “Data centers have a massive energy footprint. It doesn't take very long for operators of big data centers to say energy is a major expense.”

Also, food companies have been prominent drivers of sustainability with General Mills leading the way. Kellogg Co. (K, +0.58%) and Kraft Heinz Co. (KHNZ, +0.00%) have both published transparency reports detailing their corporate responsibility in achieving sustainability goals.

The other approach of establishing financially viable sustainable energy sources is happening in Israel with the growth of Kibbutz based solar energy farms. The large expanse of roofs covering dairies and other installations are an ideal base for the photovoltaic solar power generation. The power generated is then sold into the national electricity grid, turning the solar farm into a profit center.

Solar energy plants reduce the use of fossil fuels such as coal and oil which will eventually run out while at the same time reducing the enormous volumes of carbon dioxide that are released into the atmosphere from the use of the fossil fuels.

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