Giving people better reasons to buy green

Sustainability focused businesses have a problem. And the new £550 million green financing program being offered by Siemens and The Carbon Trust in the UK underscores exactly why: these businesses have started to realise that customers aren’t going to invest in efficiency, no matter how great the payback, if they don’t have adequate cash up front.

All the reports and studies in the world showing time and again how energy-efficiency improvements more than pay for themselves haven’t done the trick so far. In an uncertain economic environment where banks aren’t lending and governments are now dishing out austerity instead of stimulus, frugal individuals and small businesses are more likely to hide what money they have under the mattress than cough it up for something that appears to be a nice-to-have rather than a must-have.

In an ideal world, customers would be falling over one another to get to the front of the energy-efficient products queue. But that won’t happen until government leaders enact policies that prevent companies from externalising their environmental costs. Carbon emissions, water pollution, resource depletion and waste all come with a price, but it’s not one typically being paid by those responsible. Instead, either the public has been footing the bill … or no one has.

In other words, without a strong price-tag on carbon and other externalities, efficiency investments don’t carry the urgency they should.

It is encouraging that businesses are stepping in where public agencies have failed to do so. Siemens’ green financing offering should be more than welcome to customers who can reap long-term energy savings benefits for the cost of a short-term loan. As Britain’s Lord Teverson, co-chair of a recent parliamentary inquiry into energy efficiency in business, noted, “This is brilliant news for UK businesses willing to seize the financial opportunity that is energy efficiency … not only do these savings benefit business, they benefit the whole nation in achieving a low-carbon future for Britain.”

Another recent business initiative, Silver Spring Networks’ new smart-grid education program, can help provide some of the much-needed public dialogue that utility companies should be taking the lead on. From a big-picture perspective, though, those efforts aren’t enough. Governments must take the reins and start getting serious about requiring real sustainability.

If they don’t, the global economy will continue to be more brown than green, as a recent report from the United Nations’ Environment Programme put it: “(T)he biggest risk of all may be remaining with the status quo, and the biggest cost will be the opportunity lost of not engaging in a transition towards a green economy.”