Profitably green

Conventional thinking is that, if a company seeks to adopt an eco-friendly strategy, it has to do that at a cost. Thus eco-friendly products are perceived to be more expensive than eco-unfriendly ones. Hence eco-friendly products, initiatives and measures were seen more as a part of a company's social responsibility, than as a contributor to the bottom line.

The introduction of an eco-tax did not help either, as it strengthened the view that a government can only protect the environment if people were keen to accept a lower standard of living, as represented by a lower purchasing power.

This so-called conventional thinking is now being increasingly challenged abroad, and consequently should start being challenged in Malta. The argument that this is Malta and so things have to be done differently, be it because we are a small economy, be it because we have an island economy, be it because we have a Mediterranean culture, is certainly not acceptable in this case.

The argument should be that this is Malta and, because it is Malta, we have to make it work. Making it work means having a sense of entrepreneurship and an innovative approach to ensure that profitability and eco-friendliness can go hand in hand.

It is interesting to note how companies abroad are making the connection between growth, innovation and the environment. It is being claimed that in the future the only way to do business is by being innovative in how to achieve sustainability growth and the route that they take is very often the route of more environment friendly products and services.

Sustainable growth used to be linked to the lofty ideal of meeting customers' needs without harming future generations. However, sustainability was always taken to mean higher costs and hence was seen to be a non-starter in an increasingly competitive business environment. Today the tables seem to be turning as sustainable growth is making its way to the top of companies' agenda, and not for PR purposes.

The US publication Business Week recently gave a number of examples of how companies are improving their bottom line by taking a more eco-friendly stance. It mentioned, among others, Toyota, which leads in the development of efficient gas-electric vehicles. It mentioned Marks & Spencer that buys local product to cut transport costs and fuel use. It mentioned Volkswagen as a market leader in small cars and clean diesel technologies. It mentioned Philips as a top innovator of energy saving appliances and lighting. It mentioned other initiatives by other companies, which are seeking to be innovative in creating a direct relationship between profits and green products and services.

The lessons for Malta are fairly evident. The government has to take the lead and set the example. It has appointed green leaders in the Public Service and in state-controlled entities to take the lead in eco-friendly initiatives.

It can do more by giving additional consideration to green products and services when purchasing. It can insist on the adoption of environment friendly working practices when awarding tenders for infrastructural projects. This is not simply abiding by the country's environment laws; but rather it means providing incentives for those companies that are being innovative and going the extra mile.

Consumer campaigns are also required to encourage them to buy environment friendly products, without the need to compromise on quality. On the other hand, companies need to take a more pro-active approach in the protection of the environment. This has nothing to do with planting of trees or maintaining roundabouts. It has to do with initiatives that make it easier and more convenient for consumers to purchase eco-friendly products, such as taking back old products for recycling, using different packing materials, etc.

For some businesses, the requirement to take on a more environment friendly stance may seem to be a threat and is therefore to be resisted. Experience abroad is showing that it is more of an opportunity; but it requires initiative and innovation to exploit this opportunity.