Do environment and business need to play tug of war?

Following is a guest column by Tom Wagland, Manager of the Environmental Management Group for Ricoh Europe

The past decade has witnessed many companies toning up their environmental sustainability initiatives, and refocusing their efforts around the Triple Bottom Line: People, Profit and Planet. Increasingly however, we are hearing of a retrograde step in environmental sustainability achievements as businesses put a freeze on environmental actions to focus on the business bottom line and sustaining profits.

In January 2009, the Cleantech Group released findings that companies globally invested $8.4 billion in cleantech in 2008, a seventh year-on-year of growth. In the fourth quarter, however, the figure showed a considerable drop of 4 per cent from the same period in 2007. Although investment volume is only one metric to measure companies’ commitment to green, it does suggest that this commitment is at risk in such tough economic conditions. Are companies starting to relax green business policies because of pressures on the business bottom line and does it need to be a tug of war?

At Ricoh, we have successfully been balancing our environmental commitments and the business bottom line for decades. We firmly believe this doesn’t need to be a tug of war and, in tough conditions, companies can benefit from environmental programmes that work to save both the planet and the business. Examples of striking an ecological-economic balance are widely known, but clear action needs to be taken. Benefits can be gained by using cost-efficient renewable energy sources, reducing waste to landfill, switching off equipment when not in use, recycling and reusing materials, etc.

By switching from conventional energy to 100-per cent renewable energy provided by wind, Ricoh UK Products Ltd will cut its carbon footprint by 6,000 tonnes per year over the next two years and will achieve a cost-savings of £202,000.

However, the key to striking a truly effective balance is developing environmental commitments that link to potential cost-savings at the initial planning process.

Ricoh set up its Environmental Accounting Programme ten years ago. One use of this programme is to identify the business processes with high environmental impacts. We assess the cost-effectiveness of possible actions to reduce those impacts. We then choose the actions that optimise both environmental and economic results. For example, based on this analysis, we concluded that shifting from road to railway transportation would reduce cost and environmental impact when the distance of transportation exceeds a certain figure. And accordingly, Ricoh Europe changed its core product delivery mode from its Central European distribution warehouse in the Netherlands to Italy, and has achieved so far a reduction of over 400 tonnes of CO2 (a cut of over 69 per cent) and a saving of €269,000.

Ricoh;s experience tells us that environmental sustainability and economic sustainability are not opposite ends of the spectrum. Companies might sensibly reduce their cleantech investments as cash flow runs low, but sustaining environmental commitments is an essential way to drive efficiencies and optimise profits in tough business conditions.

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