Global Warming: A Business Issue, Not a Political Debate

By Steve Nober

While I intend to keep this article entirely agnostic about the climate crisis debate, we must recognize the importance of environmental consciousness as a business issue. It's an essential element of business strategy in today's economy.

You must look beyond the public debate and think about how the climate crisis will affect your business environment. The impact is very real, significant and growing every day. Consider that controls on the emissions of greenhouse gases (GHGs) will impact prices of just about everything you can think of. Local cities are beginning to tax businesses on carbon emissions. The United States has not yet ratified the Kyoto Treaty to control emission of GHGs under the United Nations Framework. But, as of December 2007, more than 740 mayors representing over 60 million Americans had signed the U.S. Mayors Climate Protection Agreement, urging the U.S. Congress to pass bipartisan GHG reduction legislation that includes clear timetables and emission limits and a flexible, market-based system of trading allowances among emitting industries.

In addition to the above, insurance companies are now treating enviro risks as threats. Banks are factoring climate variables into loan decisions. Stock analysts are now viewing environmental performance as a management quality.

The Changing Consumer
Consumers are becoming increasingly socially conscious, and cherish transparency, accountability and authenticity more than ever before. They are looking for deeper, more meaningful relationships with the companies and brands they support--and environmental consciousness is a key part of these relationships. A recent eMarketer report (see page 35) notes that approximately 60 percent of consumers seek out environmentally friendly products, with the same percentage willing to spend more for such products. They value products that are produced in an environmentally friendly way, and they also value green products that offer a specific consumer benefit, like long-term cost savings.

Having smart eco-friendly strategies is no longer just for the big brands like Wal-Mart, Dell, Staples, Longs Drugs, IKEA and Starbucks. These big brands have helped show us all that this is a real opportunity that any business should take advantage of today. There's an opportunity to create a real plan and leverage it to increase top-line sales, improve profitability, enhance new customer acquisitions and extend customers' lifetime values with these green initiatives.

Customers are dramatically changing the way they think about what they buy and from whom they buy it. Having an environmental plan that can be communicated to your customers is fast becoming the new business model. Real benefits are there to be enjoyed by those companies and business leaders that see things in this new light.

Steve Nober is the founder of Ecobrand Marketing, an agency based in Calabasas, Calif., which manages environmental planning, strategy and marketing initiatives that deliver the benefits of brand value and customer retention. He can be reached via e-mail at steve@ecobrandmarketing.com.