Are Most Businesses Going Green Just to Save Some Green?

by Paul Michael on 2 September 2009 8 comments
Photo: Zack Attack

I heard an interesting story the other day. A radio DJ was annoyed because when he went to pick up his boarding passes from the check in counter, he was handed them without any kind of ticket wallet to keep them together. The reason: “It’s our effort to save the environment sir.” But was it really just an effort to save money?

 

When you think about it, airlines are hardly the greenest of companies. When you get to you gate, you are presented with your jet plane complete with thousands of gallons of fuel. The haze of fumes rising from the fuel is enough to make you think you’re witnessing an oasis in the desert.

But still, every little helps. And yet when the DJ was informed of the disappearing wallets for boarding passes and ticket stubs, he was more than a little cynical. “I don’t buy it. Are they being green, or just saving some green?” he asked his audience.

It’s a legitimate question. Is it fair for businesses to hide cost-cutting exercises under the guise of environmentally friendly intentions? It seems more than a little sneaky to me. After all, if they’re making these cuts for the planet, and not for profit, then shouldn’t we see some of that money coming back to us in the form of lower prices? Most likely, any cuts that are made benefit the corporations and their shareholders, not the general public.

When I started looking for other examples of “green initiatives” I did start to wonder if the planet really was the cause for the change, or was it simply done as a way to increase the health of the corporation’s bottom line.

From cheaper, recycled toilet papers, to decreased services in hotels and restaurants, I noticed the influence of the environment everywhere. On a flight recently, I was asked to re-use the same plastic cup. In a hotel, the towels were only washed if I specifcally requested it. At a New York pizzeria, napkins were limited to THREE per customer. (I only needed one by the way, but if you've ever eaten out with young children, those three napkins would have been stretched thin.) Ironically, in that same pizza place I saw that the prices had actually gone up, with makeshift stickers being placed over cheaper prices. The economy is certainly taking its toll, and yet the environment is supposedly the cause of the cutbacks.

Now I, for one, like that we’re saving the planet in any way that we can. And I love that our corporations are embracing it. But it does make me wonder what the real reason for change is.

Have you noticed these changes around you? Have you been charged MORE for green products and services that actually cost less to produce and maintain than the non-green versions? Have you ever felt a nagging doubt that profit was the real reason for change, not the environment?

At the end of the day, I suppose it shouldn’t matter too much. After all, if the business saves money and helps the environment in the process, regardless of their intention, then that’s a good thing, right? But when you see no added benefit in the form of a price reduction, or you even see a price hike for going green, well that leaves a bitter taste in the mouth.

 

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Jules McVernon

Why can't it be both. These decisions aren't always black and white. There's no way you will ever know what the main impetus is for a decision like this. it could be 90% environmental 10% to save money, or vice versa. Most likely they are spinning it as an environmental issue because that's far better from a PR perspective, but it's great that they do this. The goal of a business is to make money. ALL of their decisions should be to increase their bottom line. It's why car companies come out with more environmentally friendly vehicles, because consumers want to help the environment. When Whole Foods donates money to Rwandan refugees, they are doing it as positive PR. That's the beaty of our (sometimes) free market economy, that these can be harmonious actions that benefit both the company and the environment.

A company might save money by pumping chemicals into a lake, but it could be (and probably is) a bad business decision because of the immense negative press that is likely to follow. Enron was destroyed by the free market long before any criminal charges were brought up. Businesses have major financial incentives to act in the best interests of the environment. This is a wonderful thing.

Guest's picture
Guest

Sure, you see this phenomenon every place. I buy (and use) those reusable grocery totes at the supermarket and hardware store mostly because I like them better than the flimsy plastic bags--they're bigger, sturdier, more manageable. I certainly don't mind that they are also (maybe) better for the environment, but I don't kid myself that the stores are losing money by SELLING (not giving) them away for the common good. It's one more profit center and one less expense for them.

Guest's picture
Guest

Of course it's both. But there's nothing wrong with that. 10 years ago you would not have been able to convince a company to make these "green" waste-reducing steps even though it would presumably have the same effect on the bottom line....The reason is that now a broader base of consumers are willing to do their part for the environment. I imagine in the past the company would have worried that they would alienate their customers.

Guest's picture
Ellen

Most companies are not going to make major changes to go green unless they will see the result in their pockets as well. (not all, just most) But, let's face it, most of the time going green does save you money. By driving less, we use less gas, and therefore have to fill up less, saving more money. Also, by getting our bills online we bypass the need for a postage stamp, saving more money. In addition, when we recycle our bottles we are given back a deposit that we would not otherwise receive, again putting more money in our own pockets. Sure there is a major profit involved in companies reducing the 'free' items they supply, but isn't there usually a profit involved in going green? And don't we also buy into this as consumers?

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Jim

There are a lot of consumers that want or expect companies to be green. I think the biggest reason companies are going green is because it makes them look good in the eyes of customers. Being green is now basically a must have item for companies appearances and marketing purposes. If you sell a good or service and your competition is saying they are green and you don't then that ends up a competitive disadvantage. So companies make themselves green so they can brag about it.

Guest's picture

I think you're on to something real with this post. It helps to explain why the going-green concept has spread so far and wide so quickly. In a stronger economy this might not have been the case.

The other thing that may be happening as well is that it's a marketing gimic. I mean think about it, all of the sudden it's cool to be green? Even non-environmentalists are embracing it with the zealotry of a convert. But I'm guessing it's just the du jour thing, and everybody's jumping on the bandwagon.

If they truly were going green, you'd see air conditioners being turned off, cars being parked or scrapped and bottled water being ditched in favor of water coolers. Until substantial things like that start happening, I think this trend is mostly superficial and driven by unstated intentions.

Guest's picture

I know several business owners, and they really don't care about going green. They use it as a gimmick to try and save money, but to really lure people in. It's a great structural trend that should continue for a while.

Financial Samurai

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Guest

I realized recently that for many things in life, its not that we cant do it, we're just too cheap. I could eat all organic, drive a prius (only in the winter) and have all solar energy. But feel ripped off paying 200% for organic groceries, and 300% on a car that is as good as my corolla and 200% on my energy bill.

We all keep waiting for the price to come down and say "we cant fix the environment". I could probably strip most of my polluting ways a year from now, if I were willing to pay the cost.

Similar attitudes are what keep businesses acting as described above. We could have green products for cheap, but companies have invested in coal plants and want to continue to reap profits from sunk costs. Not abandon investments and splurge on Solar panel arrays.