The business case for going green is
rapidly growing. Not only is the green
movement good news for the environment, but it’s even better news for the bottom line as customers, suppliers and job
seekers are showing a clear preference for
companies that demonstrate green work-place practices. But the pressure to go
green is beginning to migrate beyond the
voluntary, as legislators gear up to tackle
green building, sustainability and renewable energy issues. These efforts will lead
to new policies and new laws. The choice
for CEOs might come down to this: Go
green and save now or pay later.
“No one knows for sure how far the legislation will go, but I’ve never seen as much
momentum behind environmental issues as
there is around the issues of going green,
climate change and global warming,” says
John Lormon, partner and leader of the
Environmental, Land Use and Governmental Affairs Practice Group at Procopio,
Cory, Hargreaves & Savitch LLP. “There are
currently six bills before Congress and
another 15 to 20 in front of the California
Legislature, many relating to sustainability
of the environment, climate change, renewable energy and carbon footprint concerns.
Going green is the way to do business.”
Smart Business spoke with Lormon
about how companies can meet the green
challenge.
What are the benefits of going green?
Going green speaks to our core values as
a society, and it is a way for businesses to
demonstrate social responsibility through
preservation of our natural capital in the
way they conduct business. There’s plenty
of evidence to show that companies can
enhance their brand in the marketplace by
employing sustainable practices. Today,
recycling and reduced energy consumption and greenhouse gas emissions (GGEs)
are part of the green movement in the
workplace, but I think we’ll see an even
broader definition in the future.
How far will future legislation go?
It’s hard to say how far the penalties and
reporting requirements will go or what might be just encouraged behavior
through incentives or mandated by law,
but already we’re seeing some impact
from recently adopted legislation. A city of
San Diego recycling ordinance that took
effect in January of this year imposes sanctions including criminal penalties for non-compliance, and new building construction and tenant build-outs are being
impacted by Leadership in Energy and
Environmental Design (LEED) standards
as well as the U.S. Green Building Council’s benchmarks for building design, construction and operation.
California’s landmark Global Warming
Solutions Act of 2006 (AB 32) is a comprehensive program of regulatory and market
mechanisms to achieve 1990 GGE levels by
2020 starting in 2012. The California
Environmental Quality Act (CEQA), which
requires public decision makers to submit
documentation of a project’s potential
environmental impact, will soon require an
assessment of GGE. Companies may face
third-party lawsuits related to their emissions, and companies will have to report to
the investors if material financial liabilities
arise out of GGEs.
How should companies prepare for the new
legislation?
Be sure to keep good records, especially
concerning voluntary and mandatory emission reductions, since you might need that
data for compliance and defense purposes
under these new laws and regulations.
Look at everything you can do to reduce
GGE, including the possibility of buying
more local products so they do not cause
excess impact to the environment when
they are transported. You want to identify
your company’s carbon footprint as soon
as possible to establish a baseline, then initiate and document your efforts to use
renewable energy and to reduce and offset
your emissions. Try to use renewable energy sources, such as solar or wind energy,
and consider acquisition of carbon cap and
trade credits. I think CEOs will benefit
greatly if they take steps not just to protect
their business but to enhance it by developing a green strategic plan.
What other steps can CEOs take?
CEOs can take on a leadership position in
the community by gaining a better understanding of the issues. When making purchasing decisions, look at the carbon life
cycle of the products that the company
purchases. Recycle, allow your employees
to telecommute, and develop and follow a
green plan that sends a signal to your customers and employees that your company
is taking steps to minimize the depletion of
our natural capital and to make for a more
sustainable planet.
Here in San Diego, working through
Scripps Institution of Oceanography, I
started a Climate Club, and we meet for
informal dinners where local business
leaders can connect with Scripps scientists
in an interactive forum to better understand the state of the science concerning
GGE and their impact on global warming.
A program such as this is an excellent
way for CEOs to develop strategic thinking about what is best for their corporate
programs.
JOHN J. LORMON is a partner and leader of the Environmental, Land Use and Governmental Affairs Practice Group at Procopio, Cory,
Hargreaves and Savitch LLP. Reach him at [email protected] or (619) 515-3217.