Five Ways To Be Green

CORPORATIONS ARE IMPLEMENTING ECOFRIENDLY SOLUTIONS UNDER THE BANNER OF A MORE POSITIVE ECONOMY, WHICH ENDS SHORTTERMISM AND CARES ABOUT FUTURE GENERATIONS. THESE ARE THE FIVE COMMANDMENTS: ECOEFFICIENCY, POLLUTION PREVENTION, CARBON FOOTPRINT , DESIGN FOR ENVIRONMENT AND CRADLE TO CRADLE PRODUCT LIFECYCLE

by Francesco Perrini, Dept. of Management and Technology, Bocconi
Translated by Alex Foti

The most common question in innovation and environment milieus over the last few months has been: can Tesla’s domestic battery change our lives? It’s a battery designed for home use that stores solar energy, making th electricity available power all appliances, electric car included. It’s called Powerwall and Elon Musk, the South African founder of Tesla Motors, but also Space X, PayPal and SolarCity presented it to the media by explaining that «it will make the traditional power grid useless». Will it really happen?

Tesla, established in California in 2003, is an electric car manufacturer. In 2014, it managed to sell over 30,000 electric cars and reached a $30 billion capitalization level (by comparison FCA, the company merging Fiat and Chrysler, has a capitalization of $20 billion, with 4,5 million automobiles sold all over the world). As we wait to discover the end of the story about home batteries and carbon-neutral electric cars, the systemic crisis currently hitting us has exposed the limits and contradictions of the current development model, which increases inequality and raises questions about its sustainability. The World Business Council for Sustainable Development, in its “Vision 2050” project, has calculated that by 2050, even by maintaining current levels of production and consumption (business-as-usual path), we’ll need 2.3 Earths to sustain a world population of almost 10 billion people.

To be green means to insist on the need for a positive economy which commits itself to consider the interest of future generations and adopt a long-term perspective, and ends the dictatorship of short-termism, imposed by financial firms on other companies. Can corporations can really be green and play a positive role, by conserving nature and defending the environment from the increasing social costs and economic risks posed by the degradation of natural capital?

90% of managers polled by UN Global compact (2014) think that the environmental challenge can be seen off effectively. In fact, more than 60% of multinational corporations have already increased their investment in eco-friendly solutions. Concepts like eco-efficiency, pollution prevention, carbon footprint, design for the environment, cradle-to-cradle product lifecycle have progressively spread among companies and become part of managerial jargon. And the areas where the environmental impact of business can be lessened are manifold.

Among major corporations, the case of Unilever stands out. With its 2010 launch of the Sustainable Living Plan, it aimed to double revenues by 2020, while halving its environmental impact (for instance, by 100% of raw materials from farmers engaged in sustainable agriculture): today they are already beyond 50% of the target! Or consider Microsoft, which in 2012 introduced an internal tariff on carbon, and reduced its emissions by 7.5 tons of CO2, and saved about $10 million each year in the process. There is also the example of Biochemtex and Beta Renewables, a company that is leader in biofuel production, and controls more than 1,000 patents for the manufacturing of ethanol out of agricultural vegetable wastes and plants unfit for human consumption. Coming to Italy, in the year of EXPO Milano 2015 – feeding the planet, energy for life, there is the example of Barilla, with its “Good for You, Good for the Planet” project, which rotates crops in order to reduce the company’s CO2 emissions by more than 50%.

But also investors can give their contribution to a green economy: through shareholders’ advocacy, for instance pulling out from investments into high-carbon industries, or by actively promoting impact by investing in initiatives geared toward environmental conservation and ecological remediation.