Heart of green
With more and more businesses like IKEA and Walmart moving toward sustainable initiatives and investments - one can only think that some corporations have suddenly had a change of heart, that their stock price no longer matters and that the earth is worth saving.
Or maybe these businesses are moving towards green opportunities for other reasons more in line with mainstream capitalism - that based on public image their stock price will rise if they go green, or maybe they will attract more consumers if they go green, or perhaps sustainable opportunities are profitable to begin with so it's a win-win.
Let's take a look at a couple examples and see if we can get a handle on why these businesses are going green.
So what's IKEA up to these days?
- They're buying up renewable energy like it's going out of style; with over 700,000 solar panels already installed globally and a plan to operate the business entierly on renewables by 2020.
- They're printing their catalogues on sustainably sourced paper, and increasingly making their furniture from sustainably sourced lumber.
- They have hybrid parking stalls at their stores which are close to the entrance and I get rock star parking with my prius every time I go.
Ok we're getting a handle on what IKEA is up to, what about Walmart? They seem to be going green these days too.
- They're also investing huge in renewables; Walmart leads the way and is far ahead of the pact in the United States.
- They're retrofitting their stores with LED lighting which will result in substantial greenhouse gas emmission reductions.
- They're diverting a great deal of waste from landfills which is very commendable.
So what can we conclude on these two companies?
Are they doing this for ethical reasons or economic ones?
The truth on why businesses are starting to pick up the green slack is most likely somewhere between ethics and economics, and not just one or the other. Though from our birds eye view, we can speculate whether or not the reasons for going green are more ethical than they are economical or vice versa.
I personally feel as though IKEA has been pushing green for a while, before it was profitable - because it's the right thing to do. The economics of sustainability continue to improve with the increasing cost of energy - and so IKEA is now seeing the financial return for their ethically inspired approaches.
My opinion is that Walmart is doing a lot of good, investing in green initiatives, though I believe their primary motivation isn't ethical but rather economical. Walmart's renewable energy report states government incentives, cost of electricity and favourable regulatory framework as reasons that dictate when and where they invest in renewables. And although they have a goal for 100% renewables for their company, they don't have a target date and rather are using market conditions to dictate how and when they achieve this milestone. A last comment on upgrading lighting to LED's, this is one of the best return on investment strategies commercial buildings can make and so financial returns are typically what sway businesses to address this energy savings opportunity first and foremost.
The good news is, one goes with the other these days. Sustainable investments are profitable and ethical - and whether companies are starting to gain steam on the green front for one reason or the other - it's a two for one deal.