Friday, April 9, 2010

The Overwhelming Logic of Sustainable Business

Steady consumer demand and the rapid growth of green industries, makes sustainable business very appealing. Sustainable strategies and best practice are an increasingly important part of basic business planning.

Those businesses that showed leadership in the early years are reaping the benefits. The companies that broke into the green market first are now leading the Dow Jones Sustainability Index.

Today green is not just about adding cache, it is increasingly a matter of survival. Using less energy per unit of output, reducing waste, and using less water are all part of efficiency efforts that decrease costs and contribute to the bottom line. Many of the world's most successful business owners recognized the value of efficiency long before it was fashionable.

Numerous consumer and industry reports are corroborating the ongoing growth of the green market. According to Mintel, US consumers are still willing to pay more for green products despite the recession. In the recently published paper “Going Green to Be Seen: Status, Reputation, and Conspicuous Conservation,” Griskevicius and co-authors find that people will forgo luxury and comfort for a green item.

Despite a decline in venture capital due to the recession, clean energy continues to grow and in 2009 it accounted for 12.5 percentage of total US venture capital investments.

According to a report entitled Clean Energy Trends 2010, the three major clean energy sectors, solar, wind power, and biofuels, grew world-wide to almost $140 billion in 2009, an 11.4% increase over 2008 revenue numbers.

The report also indicates that wind power is projected to expand from $63.5 billion in 2009 to $114.5 billion in 2019. Last year's global wind power installations reached a record 37,500 MW. China, the first-time global leader in new installations, accounted for more than a third of new installations, with 13,000 MW.

The same report indicates that solar photo voltaic (PV) sector is expected to grow from a $30.7 billion industry in 2009 to a $98.9 billion industry by 2019. New installations reached almost 6 GW worldwide in 2009, a nearly six fold increase from five years earlier.

The global solar PV and wind power industries together currently account for a total of more than 830,000 jobs worldwide. By 2019, global industry growth will push the total to more than 3.3 million jobs.

There are many economic inducements to go green, while ignoring climate change is expected to result in unacceptable costs to life and property. One study claims that global warming already is causing 300,000 deaths and $125 billion in economic losses annually.

Sustainable businesses are more efficient and more competitive, they provide jobs, and generate economic activity while reducing the impact on the environment. The logic is overwhelming and unavoidable, becoming more sustainable just makes sense.
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