The role of the environment in the new normal

Aug 20 2009 by Ruth Spellman Print This Article

Ten years ago the environmental agenda was still regarded by many as a fringe issue. Politically, 'green' issues were marginalised as the domain of single issue parties and pressure groups.

A report produced at the time by the Chartered Management Institute (CMI) suggested that "the business case for the environment is yet to be accepted". Managers then seemed to view the notion of 'going green' as a cost, rather than an opportunity and relatively few executives cited environmental concerns as a factor in their day-to-day decisions.

Yet today we are all well versed in the concept of global warming. We are all too well aware of the rising cost of energy and the drain on natural resources. Against this background the CMI recently undertook another study to determine whether today's managers are more environmentally friendly than their predecessors.

Unfortunately, it seems that there has been little change. OurLean and Green report suggests that business leaders still seem to think that environmental activity is nothing more than 'green wash'. It reveals that although the importance of the green agenda is well recognised, and that some executives do understand the implications of a failure to act, there are still too few organisations taking the urgent action needed to transform economies for a low-carbon future.

It's as if employers believe environmental action can wait. Almost two-thirds say that carbon management will become increasingly important in the next three years. But action needs to be taken now. The new normal environment is already with us.

According to the Committee for Climate Change, British industry is responsible for 25% of the UK's total carbon emissions, while public and commercial buildings account for a further 15%. If organisations are looking for ethical reasons to act, these are surely two.

Evidence from the report suggests that the majority of organisations focus on energy usage in buildings. But what about fuel? With prices set to continue rising in the long-term, what's good for the environment is also good for the bottom line.

It's a message that has been taken on board by organisations such as Royal Mail in the UK. With 33,000 vehicles in its fleet, carbon management has been on the agenda for some time and after a transport review, the company recently announced a reduction in its carbon footprint by 120,000 tonnes per year. Not only does this help the environment but, by training staff to drive in a more efficient way, consumption of fuel Ė and with it, the cost of petrol Ė has dropped.

And while reducing the cost of fuel consumption is a strong argument in the case for going green, there are a number of other drivers that managers should be focusing on for the good of their business.

Forty six per cent of respondents to the survey for the report stated, for example, that regulatory compliance cannot be ignored. Of course this affects managers in different sectors in different way.

The European WEEE Directive crosses boundaries when it comes to the disposal of electrical goods. Yet national governments are also taking action. In July the UK's Department for the Environment, Food and Rural Affairs launched a consultation on proposals for new regulator-imposed civil sanctions in environmental cases. The message could not be clearer Ė environmental inaction may well result in costly court action.

At the same time managers cannot afford to ignore the will of their customers. A key management skill involves adapting activities to meet consumer requirements and unless this skill is mastered, businesses will suffer.

The CMI research shows that 58% of respondents argue that customer engagement is a critical factor behind their green decisions. Winning over potential customers is the key driver for 62%. In other words, there is some recognition that by 'going green', managers stand to build more profitable, successful, organisations.

It's a view shared by Arora International, the hotel chain. Faced with the prospect of lower footfall, the organisation decided to attract custom by openly challenging its own operations.

By publicising a green audit, investing in energy efficient pumps and subsequently introducing a utility consumption monitoring programme, they have been able to demonstrate a 15% reduction in energy consumption over a three-year period.

Their actions were based on simple, practical, solutions for their industry. By making adjustments to business operations they have reversed the downward footfall trend, demonstrating that responding to consumer demand for better carbon management will attract customers.

With 48% of respondents to the CMI survey focusing on the 'competitive advantage' of adopting green business processes, it also shows that ignoring the environmental concerns of your customers may push them to the competition.

Additionally, against a backdrop where almost three-quarters say they would refuse to work for an organisation with a poor environmental record, business leaders risk squandering the enthusiasm of junior and young managers at the very time they need to be holding on to their top talent.

Wider research shows that, despite the current economic climate, four out of five organisations are struggling to hold on to their staff. A key factor for this retention failure has been identified as the working environment.

Put simply, Generation Y views the green agenda as a critical issue and if it is ignored, they move on. Ironically, the problem this poses for business is sustainability. With a fluid workforce comes a lack of continuity and increased costs in terms of recruitment and training. It's hardly conducive to a business surviving the recession, let alone thriving in it.

Thirty years ago many managers viewed health and safety as 'someone else's problem'. Today, thankfully, that approach has been replaced by the understanding that it is an issue that concerns everyone. If managers are to drive forward successful businesses, they need to adopt the green agenda as part of their everyday role and accountabilities.

Making green management 'business as usual' is a key challenge facing every manager today. But managers need the support of those at the top of organisations because unless the support is top-down, the introduction of green initiatives is unlikely to succeed.

Environmentally, we are at a turning point in human history. Some people might argue that in a recession, environmental concerns should be secondary to economic considerations. But this is a short-sighted view.

It is clear that green management delivers cost-effective business solutions. That is one reason, amongst many, why environmental considerations are no longer a one-party issue. The signs of progress in attitudes and actions are encouraging, but much more change needs to happen in the next decade than happened in the last. Unless we see a sea-change in approach it will be more than the environment that becomes unsustainable.

About The Author

Ruth Spellman
Ruth Spellman

Ruth Spellman is the chief executive of the Chartered Management Institute, a professional institution for managers, based in the United Kingdom with a mission to promote the art and science of management.