Featured Industry: Environmental
The Business of "Green"

Seven years ago if you asked me the first thing that pops into my head when I hear “Al Gore,” I would have mentioned his attempt at becoming president or possibly his difficulty spelling “tomato”. Today, I would instead reference his new documentary and book about global warming. His media blitz is helping bring environmental concerns to the front and center of public attention.  Whether you are a company producing alternate fuel and energy sources, or a business instituting environmentally friendly policies, the “going green” is a growing rage among business and investment communities, as well as consumers. Plus, with oil prices still in the range of 20-year highs, now would seem as good a time as any to be concerned with alternative energy sources and all things that promote smart consumption.

Key Trends and Markets
The issue of the world's potential supplies of coal, oil, and natural gas seems to remain one of concern. Energy demand in the developing countries of Asia, which includes China and India, is expected to increase by more than 100% by 2025.  And, CO2 emissions are said to be warming the earth at a rapid rate.  All of the above issues, coupled with a significant increase in media and public attention to this topic in recent years, have paved the way for a multibillion dollar environmental, or “green,” industry.

"Buying green" describes a type of consumerism motivated by a desire to improve the environment, communities, and lives.  “Green business” is the process of implementing processes and using products that lessen your organization’s environmental impact (also known as footprint), or providing the materials and services that help companies continue along an eco-friendly path. 

How about solving some of world's biggest problems while earning a profit?  It may seem like a stretch, but there are multiple opportunities for new products and services in the booming (albeit still emerging) green industry.

• According to CNN.com, organic food makes up the largest segment of the green market. The U.S. organic food industry accounted for $13.8 billion in consumer sales in 2005. Eight years ago, that number was $3.59 billion.
  
  
• High prices at the gas pump, concerns about global warming, and an increase in production sent hybrid car sales soaring from around 9,000 in 2002 to above 200,000 in 2005, according to Hybridcars.com. Hybrid cars are projected to make up 5 percent of the U.S. market by 2013, according to J.D. Power and Associates, a market research firm, up from 1.2 percent in 2005.
  
  
• The green concept also has entered the construction industry – studies show that building green can lower utility costs and increase productivity while reducing the impact on the environment, according to the U.S. Green Building Council. Companies like Bank of America, IBM, and Toyota are constructing or have moved into green buildings, according to the Harvard Business Review. Sales of green building products and services have doubled from $5.8 billion in 2003 to $10 billion in 2005, the Council found.
  


• From Maine to the UK, wind energy is “blowing” its way into homes and businesses – increasing the demand for wind turbines. The market for European wind power capacity broke new records in 2006, according to the annual statistics issued by the European Wind Energy Association (EWEA). Specifically, 7,588 MW of wind power capacity, worth some €9 billion, was installed in the EU in 2006, an increase of 23 percent compared to 2005.

Businesses Going Green: The Rewards
Companies progressing toward a role of green leadership are reaping the rewards that this new perspective is bringing to their organizations. Early movers are reporting long-term advantages, both in cost savings as well as new revenue opportunities. But the rewards extend well beyond the walls of the company to the response from the communities they serve, including the financial community.

According to a 2007 report by AMR Research, financial analysts and investors are embracing strategies that correlate environmental performance with a firm's financial performance, in part that environmental performance is a proxy for financial performance. AMR also predicts that the next few years are critical for manufacturers, retailers, financial services firms, and others as they establish their roadmap toward green leadership. While early adopters are already reaping rewards, there are still significant opportunities for new companies to benefit from “going green.”

To find out more about the environmental industry, visit this issue’s useful links and the detailed section outlining upcoming industry events.

SOURCES:
BusinessFacilities.com
Energy Business Reports: http://www.EnergyBusinessReports.com
The World Resources Institute: http://www.wri.org
GreenBiz.com