Environmental Protection

Report: Business Needs Compelling Reason to 'Green Up'

George Mason University Professor Nicole Darnall is hoping her new report will give clear guidelines on how the government can help businesses "go green" and how being green will even help companies financially in the long-run.

According to Darnall, companies don't green their production processes because there are unclear and mixed messages about how doing so will benefit them and their bottom line.

"Many companies want to 'do the right thing' and undertake green production in some form, however they don't know how or lack a compelling reason to do so," says Darnall, an associate professor of corporate sustainability and public policy.

In her report, "What the Federal Government Can Do to Encourage Green Production," which was commissioned by the IBM Center for the Business of Government, Darnall provides a "road map" for the new administration and the U.S. Environmental Protection Agency as they encourage more widespread green production. She outlines strategies, provides recommendations and warns of challenges to success.

"Economic prosperity need not be at odds with the environment," says Darnall. "A key issue for the new administration is to convey why undertaking green production is in business's best interest, and why consumers should purchase green products. We need stronger leadership that emphasizes both the company's and consumer's role in creating a cleaner, greener economy."

One of Darnall's recommendations is that the new administration establishes a mandatory environmental product label policy. This eco-profile would give consumers and investors information to scrutinize and compare the environmental footprints of the products they buy. Information provided would include things such as the natural resources and energy consumed and wastes produced in the manufacturing of an item.

Some companies are seeking ways to provide green labeling information on their own. "Wal-Mart is trying to create a universal rating system that scores products based on their environment and social impacts," Darnall says. She believes that only a handful of companies will provide consumers with environmental information if a product label policy is not required. "History has shown repeatedly that companies do not wish to publicly disclose their environmental information."

"Yet most U.S. consumers are concerned about our environmental future, and more than one-third indicate they are prepared to change their lifestyles to tackle environmental concerns," says Darnall. "Too little market information reliably informs their product choices."

Darnall also suggests EPA develop more tools and services to help businesses implement sustainability practices. Tools such as online environmental accounting calculators would help companies better understand the costs and benefits of undertaking a green production change.

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