The State of Green Business in 2008

Hardly a day goes by without a company proclaiming their intent to slash energy consumption, reduce waste or take some other bold action to green their operations or products. The wave of announcements is dizzying. Is this is just lip-service, or is the adoption of green business practices really growing?

GreenBiz embarked on a journey to solve this mystery using data on a slew of indicators comprising the GreenBiz Index, part of the inaugural “State of Green Business 2008” report just released. The conclusion: Environmental performance overall in the U.S. is gradually advancing, but often not at the pace needed to offset economic growth or avoid the worst effects of climate change.

“The state of green business is improving, slowly but surely, as companies both large and small learn the value of integrating environmental thinking into their operations in ways that align with core business strategy and bottom-line goals,” said Joel Makower, executive editor of GreenBiz.com. “Green business has shifted from a movement to a market. But there is much, much more to do.”

Makower and his fellow editors at GreenBiz.com compiled a set of indicators measuring various aspects of green business, ranging from paper use and toxic emissions to building energy use and employee commuting. The group then assigned each indicator a symbol to represent progress: a “sinking,” symbol means a measure is losing ground; a “swimming” icon indicates progress is being made; and a “treading” symbol shows an indicator holding its own.

In half of the measures — 10 of the 20 indicators — the verdict was “treading,” as progress was lacking or be slow, or at least too slow to address the magnitude of environmental challenges. They include pesticide use on U.S. farms, which hasn’t changed much since 1999. The number of teleworkers is slowly gaining but there hasn’t been much progress in getting employees to abandon their solo commutes to work. While publicly traded companies are more likely to publish corporate responsibility reports, the number of companies reporting totaled only 253 in 2007 — that’s less than a 50 percent increase over five years.

There are bright spots, including eight indicators deemed “swimming.” Clean technology investments in the U.S., for instance, soared to more than $48 billion in 2006, largely driven by a 132 percent increase in venture capital dollars going toward renewable energy, waste reduction, resource management and other activities that fall within the loosely defined area of clean tech. Related patents shined, too, with U.S. clean-tech patents accounting for nearly half of those issued worldwide.

The explosion of commercial green building projects also is heartening, with a 500 percent increase in the amount of LEED-certified office space between 2005 and 2007. The total amount of paper used in the U.S. has hit a plateau, while at the same time, the economy continues humming. Energy use, measured per dollar of gross national product, is declining, although the rate of improvement has slowed.

Packaging use of aluminum, paper, plastics and steel is making small but steady improvement in efficiency. And renewble energy generation, though increasing, may not grow fast enough to overcome the need to build more fossil fuel-fired power plants.

Two of the indicators were deemed “sinking.” One was carbon intensity, measured as carbon dioxide emissions per unit of gross domestic product. Between 2005 and 2006, carbon intensity fell 4.2 percent, which, at first blush, appears encouraging. But it doesn’t change the fact that the U.S. leads in both overall greenhouse gas emissions and per-capita emissions, or the need to significantly reduce absolute emissions.

And even though the amount of e-waste being recycled keeps growing, the absolute tonnage of electronics waste entering landfills or being sent overseas is staggering. But with no reporting mandates, federal e-waste laws or single clearinghouse for e-waste recovery data, it is difficult to determine exactly how much unwanted electronics is being recycled in a responsible way.

The lack of data transcended the e-waste recycling indicator. After determining the indicator list, the editors looked for reliable data that was both meaningful and repeatable, since they intend to track progress annually.

Some data were relatively easy to find while others proved more elusive. Was it really true that the most recent data showing the amount of water used in the U.S. is nearly eight years old? The short answer is yes, which is troubling considering drought concerns in various parts of the country, particularly in the Southeast.

“If you believe in the adage, ‘what gets measured gets managed,’ then it’s clear why many of the major impacts of business aren’t being well managed, at least on the macro scale,” Makower said.

Download the State of Green Business 2008 report at StateOfGreenBusiness.com.

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