5 Trends at the Nexus of Business and the Environment

July 30, 2012

Some conversations at the nexus of business and the environment can be confusing and conflicting, but one thing is certain – if the conversation remains the same, we can expect to get the same results. Such discussions rarely accomplish much (just look at the outcomes of the last dozen large international convenings) and push parties to be more stubbornly resistant to outside ideas.

However, during a working meeting this month between business, government, and NGO experts, this nexus came into focus through a new lens. The event, convened by BCLC, emphasized open-minded dialogue and a problem-solving attitude.

Dave Bartlett of IBM and Nancy Gillis of the U.S. General Services Administration were among the meeting participants.

Here are five of the most important and exciting trends from the meeting:

1)      Technology is maximizing environmental innovation. Technology is allowing us to understand energy efficiency and resource management in new ways to create better products and to help companies minimize their waste. As the proliferation of technology accelerates into the future, these benefits will multiply exponentially. Smart monitoring technologies are improving the efficiency of our buildings – where over 40% of energy and 50% of water is wasted. As technology evolves, consumer behavior will change as well.

2)      Environmental innovation includes many non-economic benefits. Another frequent topic during the day was the need to integrate non-economic factors into the calculus around the environment and business decisions. Companies that do so often see tremendous benefits, such as attracting the best talent, burnishing brand reputation, and ensuring a firm’s right to operate.

3)      The U.S. energy landscape is transforming. As the U.S. energy system evolves toward more natural gas production and consumption, other parts of the world remain reliant on coal. The financial cost of alternative energy production is falling, but still does not compete with the cost structure of energy generated by fossil fuels globally.

4)      Green supply chains are evolving, but there’s work to be done – The public and private sector are adopting methods to evaluate their suppliers’ products and services for carbon emissions, efficient resource usage, chemical usage, and other energy and environmental metrics. This new way of doing business is generating a wave of emerging innovate businesses helping to meet this need.

5)      Ecosystem services valuation is a new frontier – Assigning an appropriate market price to the benefits we receive from nature – from a forest’s role as a carbon sink to a marsh’s ability to prevent soil erosion – is an intriguing way of incentivizing companies towards better environmental outcomes. If companies knew the precise value of the environment they would be likely to be more responsible stewards. Even more exciting, ecosystem services valuation could lead towards companies working actively to restoring environmental losses.

We will be discussing these trends, and other next steps, during  a conference call on August 8th. If you are interested in joining please let me know.