Home Top Stories

Going Green: Pioneering Private Sector Already Embracing Sustainable Future

Green Investments

Rio de Janeiro – Businesses making the transition towards the Green Economy are already reaping rewards worth hundreds of millions of dollars in savings and high return on investment, while benefiting consumers, communities and the environment, says a new report entitled “The Business Case for the Green Economy: Sustainable Return on Investment”.

The report, produced by the UN Environment Programme (UNEP) in partnership with SustainAbility and GlobeScan, uses compelling economic and scientific data and a wide-ranging collection of real-life case studies to demonstrate the advantages of the green economy in action.

  • Unilever‘s Sustainable Living Plan, which aims to integrate sustainability into business models, has led to savings of over US $ 10 million dollars annually. At the same time, their “”one rinse”” washing formulas, which save an average of 30 litres per wash, are now used across 12.5 million households worldwide – a 60 per cent increase over 2010.
  • Siemens produces half of the installed capacity of offshore wind turbines worldwide (2,000MW), saving about 4 million tonnes of CO2 annually. It has recently announced investment of € 150 million to offshore wind R&D and the expansion of its wind business.
  • Grupo Bimbo in Mexico saved approximately US $ 700,000 and 338,400 m3 of water in 3 years through its water reduction programme.
  • AVIVA, who launched its insurance product for Low-Carbon and Environmental Goods and Services in 2011, expects the sector to grow by an estimated UK £ 45 billion by 2015, supported by government decisions and financial incentives.
  • PUMA conducted the first Environmental Profit and Loss Account in 2010, in collaboration with PricewaterhouseCooper and Trucost. The value of environmental impact was calculated at € 145 million (seen as negative financial impact). Using the tool allows PUMA to reduce future financial loss while strengthening its operating margin by taking into account emerging risks. The company committed itself to having 50 per cent of its products made from sustainable materials by 2015.
  • In Egypt, SEKEM Group‘s compost project helped save more than 300,000 tonnes of CO2 equivalent s between 2007 and 2011 and increased sales from EGP 788,400 to over EGP 10.5 million in 2010.
  • General Motors saved more than US $ 30 million in 6 years through their resource productivity programme, they also reduced waste volume by 40 per cent.
  • In China, the Zhangzidao Fishery Group saw revenues grow by 40 per cent annually between 2005 and 2010 (compared to the industry’s 13 per cent average) through offering an alternative to monoculture methods. The integrated Multi-Tropic Aquaculture approach employed by the company provided for a more balanced ecosystem, taking into account local conditions and environmental quality.
  • The Colombian Coffee Growers Federation ensures a sustainable income for more than 27,000 coffee growers with its Rainforest Alliance certified coffee, as part of the Nespresso AAA Sustainable QualityTM program
  • Markets for biodiversity offsets are predicted to grow to US $ 10 billion by 2020.
  • In the offshore wind sector alone, employment in Europe is projected to grow to 150,000 by 2020 and to over 200,000 by 2030, while global revenues for companies involved in the renewable energy markets are projected to rise to more than US $ 300 billion annually by 2020.

According to experts, companies investing in sustainable innovation to increase resource efficiency and responsible operations ahead of formal regulatory frameworks are achieving competitive advantage by positioning themselves to capture the mainstream markets of the next decade.

UN Under-Secretary General and UNEP Executive Director, Achim Steiner, said, “”Many businesses are already seizing the opportunities represented by a transition to an inclusive Green Economy where resource efficiency and a low carbon pathway are the norm not the exception. Indeed pioneering companies are already reaping the rewards and positioning themselves for sustained success that benefits their customers and communities.”

“The challenge and the opportunity of Rio+20 are the putting in place of the practical and political landscapes that will accelerate and scale-up positive private sector engagement in a defining and decisive outcome that sets in train actions that deliver social, environmental and economic outcomes,”” he added.

Analysis shows that from utility companies in emerging markets to consumer goods companies in developed markets, sustainable goods and services are moving from niche to the mainstream.

Paul Polman, Unilever’s Chief Executive Officer, said, “”At Unilever, we see no conflict between sustainability and economic growth. We have to have both, and increasingly we see that one is not possible without the other. This new report from UNEP confirms this, with cases drawn not just from our own business but many others in a variety of sectors, exploring the ways in which sustainability reduces risk, generates cost savings, and creates opportunities for growth, providing the foundation for a new business model for the 21st century.”

Leveraging Benefits

Research shows that the provision of sustainable products and services bolsters sales growth, market share, brand value and reputation, while increasing customer loyalty.

Jeff Erikson, Senior Vice President at SustainAbility and a contributor to the report, said, “”In the 25 years, we have worked on corporate sustainability, we have witnessed time and again the multiple ways that sustainability delivers business value to companies that adopt it as a strategic principle.”” He added, “”The companies currently leading the transition to the Green Economy realize it’s not about bravery – it’s about the bottom line.”

There is strong evidence that in recent years demand for sustainable products has been resilient, with many customers willing to pay a premium for sustainability credentials.

A National Geographic/Globe Scan Survey in 2010 found that consumers in Brazil, India and China scored the highest in terms of environmentally sustainable consumer behavior. Other survey results show that in future business-to-business and business-to-consumer transactions, customers will expect all products to be environmentally and socially responsible.

The new lifestyle markets, markets for sustainable cities, the service markets, the organics and certified markets are all examples of opportunities to be cultivated and seized.