How Green are Green Businesses? - Part One

Calling Time-Out on Greenwashing
Every organization is under increasing pressure from clients, employees, shareholders and the government to be more environmentally aware and become better stewards of our natural resources. But the green bandwagon has proved too tempting for some organizations looking to boost their image with certain audiences via headline-grabbing policies that often amount to little more than a statement. Unfortunately, these and many other businesses have a long way to go before they achieve tangible change.

We’ve all heard these generic statements about green strategies - from procurement to recycling, carbon footprint to flexible working - but they won’t suffice in the long term: Organizations will have to prove their commitment through information transparency and auditable policies.

At the heart of such transparency will be consistent, detailed information about the life of every asset - from its country of origin through maintenance schedules to final disposal. An ethical asset register is becoming a critical tool in proving strategic commitment to environmental strategies, argues Marcus Scholes, Vice President of U.S. Operations for Real Asset Management International (RAMI).

Greenwashing?
Ethical statements and a corporate commitment to a green agenda are becoming a standard component of many U.S. businesses. Organizations are increasingly responding to demands from clients for ethically sourced and produced goods and from employees for environmentally aware policies, with clearly defined Corporate Social Responsibility (CSR) strategies that have a firm focus on sustainability and reducing the carbon footprint.

There is also a growing recognition of the bottom line impact of the corporate green movement. Investments in ‘Ethical Funds’ have grown rapidly across the U.S. and abroad and, as a result, an organization’s FTSE4Good rating has become an important consideration. FTSE4Good is a series of indices created by FTSE, a jointly owned subsidiary of the London Stock Exchange and the Financial Times, and a world-wide expert in the creation and management of equity indexes. The FTSE4Good series provides independent measures of social and environmental performance for the growing number of individuals, analysts and fund managers who are becoming increasingly aware of the potential links between such factors and financial performance. 

But what is the basis for these new policies and statements of sustainability and environmental concern? Are these statements based on intangible, provable policies or, as an increasingly cynical consumer base suspects, simply “greenwash?” While CSR strategies may grab a few headlines today, the potential negative impact both financially and for the organization’s reputation could be significant should these statements be proven to be overly optimistic or incorrect.

And while such strategies are currently a corporate choice, there are growing indications that in the not so distant future organizations will have to prove the true implications of environmental policies to government regulatory entities or watchdog groups.

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