Portfolio 21. "It's a place where ecology and economy come together,

where doing what's right for the planet also becomes a financial advantage." A fresh focus on product design, energy efficiency, materials consumption and waste management is making it clear that environmental considerations are more than just green business, they're good business. Perhaps this is the biggest revolution in business today -- the one that's sweeping established corporations in all industry sectors”. (Bogo, E Magazine, July , 2000).

“我們正處在一個有趣的地方，說：”卡斯滕Henningsen的董事長組合21 。 “這是一個地方生態和經濟走到了一起，在那里做什么是正確的，對地球也變成了經濟優勢。 “新鮮專注于產品設計，能源效率，材料消耗和廢物管理環境考慮不僅僅是綠色企業，他們是好生意。也許，這就是今天最大的商業革命 - 一個是席卷成立公司在所有行業“ 。

Initially in this essay I am going to explain exactly what ‘green business’ is and where the notion has come from. Subsequently the all-round benefits and drawbacks will be explored to the environment, the customer and lastly the ‘bottom line’ for businesses engaging in it. Finally Bio D, a UK pioneering green company will be looked at to see if this new green ‘ethos’, really is practical for business.

最初在這篇文章中，我將解釋正是“綠色企業”的概念來自哪里。隨后的全面的優點和缺點，將探討的環境，客戶和企業從事最后的“底線” 。最后，生物研發，定定地看著在英國開拓綠色公司看，如果這個新綠'精神' ，真的是對企業的實際。

“The environmental revolution has been almost three decades in the making and it has changed forever how companies do business “(Starkey et al, 2001) During the 60’s and 70’s companies were in a state of denial regarding the environment, it took a series of highly visible ecological problems to rally the support for governments to create strict regulation. Today many more companies are accepting their responsibility to the environment. Products and production processes are becoming cleaner, and where this is happening the environment is gradually on the mend.

“In the industrialized nations, more and more companies are ‘going green’ as they realizes that they can reduce pollution and increase profits simultaneously.” (Starkey et al, 2001)

What is "GREEN"?

Green business is the voluntary pursuit of any activity that encompasses concern for energy efficiency, environment, water, conservation and the use of recycled/recycled products & renewable energy. (A Prakesh, 2000, Cambridge University Press, Greening the Firm)

The green purchasing trend in all sectors has risen dramatically in America. “Sales of organic foods are increasing 20% a year; the federal government's General Services Administration is requiring all new buildings it authorizes to be energy-efficient; the sale of hybrid cars has cruised from zero to 36,000 in just a few years; and the share of venture capital going to green-energy technologies has tripled since 1999”(Cait Murphy, FSB magazine)

Many businesses today are undertaking what might be called a "green" strategy, or a strategy that takes into account environmental issues, involving ways in which they conduct business, handle waste, and deal with employees.  For others, it is a key part of their business. 

The most wholehearted of these companies follow a philosophy called The Natural Step, developed by Swedish cancer doctor Karl-Henrik Robert in 1989. The Natural Step, which has since become an international movement, offers a framework for incorporating sustainable practices into existing cycles, revolutionizing business from the floor of the board room to the floor of the shop. It acknowledges that there are important economic benefits to be gained by learning to operate in harmony with nature, and significant consequences to hitting her limits.

The underlying reason why such businesses have developed is that the general public has become green itself, “demanding safer and cleaner production facilities and waste recycling programmes” (Shrivastava, 1996) meaning that environmentalism is itself a vital social value prized by the public.  There are a number of reasons why this has occurred, one of which is public frustration at such visible problems as air pollution and other natural disasters.  “In the United States, Lake Eire was dead. In Europe, the Rhine was on fire. In Japan, people were dying of Mercury poison” (Starkey et al, 2001)

In addition, “the public has become more aware of a variety of non-visible pollutants and the adverse health effects they may have, and the public has as a result demanded that business respond by reducing pollution as part of the price of doing business.”(Lloyd, Bio D 2005)

Consumers are therefore deliberately looking for products that can be considered "green" and so environmentally sensitive, and this increases the profits for "green" companies while reducing the profits for companies perceived as less responsible.

Communities across Europe and America have been demonstrating a dedication to the protection of the environment and impatience with companies that do not demonstrate environmental sensitivity.  Some companies fail to comply for strictly financial reasons--they see making a change as too costly and believe someone else should pay for the problem they created, usually some government entity.  As noted, some companies comply for the same reason--they see doing so as adding to their reputation and their profits.  Thus, at this nexus, social responsibility and increased profits are results of the same actions.  The company can be socially responsible and responsible to shareholders at one and the same time.

This is down to companies realizing that people will pay more for a product they can believe in. According to the 1999 Roper Starch Green Gauge report, people will spend nearly eight percent above and beyond the cost of the item for energy-efficient major appliances, and six percent more for electricity-saving home computers. They will shell out close to another six percent for biodegradable plastic packaging, recycled-paper products and cars that are a third less polluting. (Bogo, E Magazine, July , 2000)

And while it would be foolish not to cash in on the growing consumer consciousness and higher price premiums that frequently go hand-in-hand, environmental improvements often save corporate headquarters money, too. Reducing use of raw materials saved Xerox $45 million in 1998, as more than 72,000 tons of old machines were recycled or refurbished by the company. A recently introduced 97 percent recyclable photocopier not only exceeds all standards for energy efficiency, but is expected to save $1 billion through long-term remanufacturing of reusable parts. (Bogo, E Magazine, July , 2000)

“It pays to be green,” says management professor Michael Russo. “Greener companies tend to promote innovation, conserve valuable resources in their production systems and enhance their reputation for both prospective employees and potential customers. They go beyond the minimum required by law, and their shareholders reap the rewards.”

Additionally “a 'Green' corporate image can leverage access to local and international markets” (site)

The research examined the economic and environmental performance of 243 companies over a two-year period. It found that companies with superior environmental performance had higher returns on investment compared to their competitors. (Natural Life magazine no 65)

“Some mistaken financial ‘experts’ assume that environmentally responsible practices represent costs without benefits,” says Alisa Gravitz, Social Investment Forum vice president. “Executives and stockholders take note – when you actually crunch the numbers, it turns out that good environmental citizenship is great for the bottom line”

The case of Bio D Bio D was formed in 1998, the owners, just like the literature suggests saw an expanding niche in the market for environmentally and ethically responsible businesses. The pair previously worked for a detergent company, but although the company adhered to environmental regulations was in no way a ‘green’ business.

Bio D benefited from Government grants to pay fore some of the initial costs of setting up, they were rewarded these grants because of the ‘green’ ethos the company had, so “green business has to be good if you get money to do it” (Lloyd, Bio D 2005). In the same light the University of Hull volunteered to help develop new products, which also  saved the company money.

Bio D is now the UK’s foremost manufacturer of environmentally responsible, ethically sound, hypoallergenic household cleaners ( Bio D website)

The principal functions of the company are to manufacture and market household cleaners, detergents and soaps which have the absolute minimum impact on the environment both in use  and the manufacturing process.  In the manufacturing process Bio D produces no waste as it is all reused. As far as any other waste that is produces by the factory the company works on the 3R’s formula Reduce, Reuse, Recycle. The company is a member of the ‘business to business’ waste recycling scheme, where business that are in need of boxes etc can get them of other businesses eliminating the need for new purchases, and bottle waste gets donated to scrap stores and gets passed on to schools for arts and crafts.

Where possible, all raw materials are obtained from renewable sources.

The Bio-D Company was formed in 1988. From that time a fixed cut-off date of 1988 was adopted as a baseline for raw materials which may have previously been tested on animals.

This rule is a lot more responsible than other companies such as the body shop which works on a five year ‘rolling rule’. This means that the body shop can only use materials that haven’t been tested on animals in the last 5 years. This is not as good as it seems explains Lloyd from Bio D “as this means what you can’t use today you can use tomorrow”

Bio D operate a strict policy that none of the raw materials or finished products are tested on animals. All raw materials are free from animal by-products and Bio D is subject to scrutiny and approval by the World Wide Fund for Nature (WWF) and the Naturewatch Trust. Many of the ingredients contained in conventional household cleaners, detergents and soaps are known to have detrimental and damaging effects on the environment and humankind. (See appendices)

A passage from the research booklet, 'Water Quality in Catchment Ecosystems' by A.M.Gower, reads... "Of the pharmaceutical products, detergents, cosmetics and other similar domestic products and their metabolites (ingredients), greater quantities are discharged to sewers from domestic premises than from the premises manufacturing them". What this statement means is that domestic pollution causes more damage to the environment than industrial pollution!!

Based on well documented findings in Canada, U.S.A., Belgium, Scandinavia, and other parts of Western Europe.

Bio D is currently in stages of becoming the UK’s first zero carbon factory, which in turn will make it a completely sustainable business, as it already possesses in its portfolio sustainable products and packaging, solar power will complete the mix. All areas have been taken into account; trees will planted around the factory to balance out the carbon emissions from its employees.  

As mentioned earlier, consumers are increasingly becoming aware of non-visable pollutants in products that are correlated with adverse health impacts, such as optical brighteners causing severe skin irritations to the user, Petroleum-based Additives which cause allergic reactions and are endangering to plant and animal life. This increase in consumer awareness is opening up a new and lucrative market to Bio D as none of there products have any additives in at all.

“Being truly green is not just about having environmentally responsible products, you also have to look close to home, your staff have to be well treated, and have to buy into the green ethos to make the business a success” (Lloyd bio D 2005) Bio D are currently in the staged of becoming part of the ‘investors in people’ scheme. Lloyd himself is regularly visiting academic institution in the area from primary schools where he talks to the children about the environment and makes natural soap with them, to collages where he lectures on sustainable business, he ahs been in the local paper and has been portrayed as a local green businessman.

Bio D’s Distribution and Market segmentation

Bio D’s products can be bought in independent health stores, mail orders or the internet. They have divided their consumers into 3 main groups:

‘Crusty save the world’

These are customers who are true environmentalists; they do not necessarily bring in a big income, but will still spend a high percentage of their income on ethical products they believe in.

‘Shaolin shoppers’

Mostly middle class with a high disposable income “Ok to drive a big car if they buy environmentally responsible products”(Lloyd bio D) These people try to do a bit for the environment but will not completely change their lifestyle

Health conscious

This is the market mentioned earlier. Customers that are concerned with adverse affect products can have such as allergies from detergents; this is a fast expanding market

Conclusion

In May 2003, DTI and Forum for the Future hosted a workshop for business, non government organisations, academics and Government to debate the links between competitiveness, productivity and the increasingly important role of intangible assets, as well as sustainability and CSR. The broad conclusion – with some qualification – was that sustainability makes a positive contribution to business success (Forum for the future)

In conclusion it seems there has been a big ‘wake up call’ to businesses today, with the environment worsening and increasing customer pressures for greener products, some consumers want greener products for the environments sake, and others want products without any additives so they can use them safer, without having to worry about adverse health effects. This essay has highlighted many benefits for conducting green business, from high demand for the products, lower costs, gain access to international markets and the bottom line ‘increase profits’

The only draw back that was discussed briefly was the initial costs that existing business might incur if they change there business practices, but this is not a serious disadvantage considering all the gains that are to be made Research has shown that consumers are willing to pay a premium for environmentally sensitive products, and that companies such as Xerox  have saved millions by recycling.

By using Bio D as an example, it seems that a lot of help and assistance is offered from outside parties to businesses engaging in green business practices, from the University of Hull helping with product design to the government giving a grant for Bio D’s new factory.