Governments, academics, industry, and consumer groups (never mind the
traditional green activists) are conspiring to make chemical and
pharmaceutical companies more environmentally sound. Passive voluntary
cooperation with environmentalists is shifting to serious and
enthusiastic participation to avoid losing money.
As world leaders flew into Kyoto, Japan, for the recent climate change
talks, Senator Frank Murkowski - the chair of the congressional Energy
& Natural Resources Committee - had this to say about the prospect
of reducing CO2 emissions: "If this agreement is signed
it will be the first time in our history that an American administration
has allowed foreign interests to control and limit the
growth of the U.S. economy." He promised that any such agreement
would be "dead on arrival" at the Senate.
Welcome to the 1990s, Senator! The agreement was indeed signed and
shows no immediate indication of dying on the doorstep of the American
legislature, whereas the energy committee, along with many branches of
American industry and government, is slowly discovering that the U.S.
economy is inextricably linked with other nations' interests,
both economically and environmentally. The lessons are being learned
though a combination of science, consumer lobbying, and many new voices
from inside industry, all pointing out the folly of ignoring
environmental issues that now threaten to impact the bottom line.
On a broad scale, penalties may be levied on polluting countries.
Emissions trading terms would mean - if implemented - the U.S. having to
pay $4.51 billion over the next decade if it fails to
reduce its CO2 emissions to their 1990 level. The same kind
of pressure is likely to be exerted down the industrial food chain,
forcing companies to clean up or pay the price. "Once you create a
profit motive for enterprises to invest you unleash forces that are
desperately needed to solve a problem like global warming," says
Fred Krupp at the U.S. Environmental
Defense Fund.
For many years Krupp has been dismissed as a crank. Now, following the
rise of the nerd comes the rise of the eco-crank, with hard fiscal and
legislative action in support. The United Kingdom government is
considering shifting tax-raising emphasis from payroll to pollution,
potentially boosting employment. Other European governments are of a
similar mind.
Inside industries there are different ways to punish polluters. The Saskatchewan Environment and
Resource Management system in Canada measures how environmental
impacts can damage a company's reputation and the cost of cleaning up
toxic spillage. This works along the lines of a credit-rating agency,
rewarding the clean and
hammering the mean. Last year London University's Imperial College
launched a method of measuring companies' CO2 emissions,
allowing them to assess future penalties under proposed fossil fuel
legislation.
Stronger parallels are being drawn between environmental responsibility,
fuel efficiency, and the underlying profitability of a firm. "We
believe there is a link between environmental performance and ultimate
investment values," says Derek Higgs, an investment manager at the
United Kingdom's Prudential Assurance insurance company. He is among 78
percent of members of the Confederation of British Industry who would
support a "green" tax if it dealt with environmental problems.
Also in the U.K., the Chemical Industries Association announced in
December 1997 a 20 percent cut in energy consumption of the 1990 level,
to be achieved by 2005. This unasked-for concession does not guarantee
lower emissions, since production could rise, but it signals readiness
to be ahead of legislation and in line with consumer awareness.
Other plans show the real damage done by chemical spillage, rather than
simply listing quantities. Imperial Chemical Industries monitors waste
disposal through the "environmental burden method" giving
varying costs to different wastes: toxicity is gauged through reaction
with water, sunlight, or chemicals. At the company's Tioxide plant,
both iron and manganese are produced during the manufacture of titanium
dioxide. Although 17 times as much iron is produced as manganese, the
latter chemical is 20 times more toxic, so the environmental burden is higher.
Thus, if the Tioxide plant achieved a 50 percent reduction in its iron
emissions,
but allowed a 10 percent increase in manganese emissions, the
net environmental impact would be negative.
"Very often when you make a gain in environmental impact in one
area it can have a negative effect on another," says the commercial
director John Russell. In the U.S., unlike the U.K., the Environmental Protection Agency stores
publicly accessible data on hundreds of toxic polluters, data that could
be used more severely as the legislative mood hardens.
Legislating for the world's supplies of raw materials will never be a
simple matter, but one attempt is a Swedish model called The Natural Step. Its central
principle is that "metals, minerals, and fossil fuels should not be
extracted quicker than their slow deposit in the earth's crust."
Swedish companies have begun to follow this creed, along with U.S.
manufacturer Interface, giving a scientifically measurable basis to the
kind-hearted wishfulness of earlier generations. The theory stresses
recycling and energy efficiency, two areas in which many research groups
around the world have identified massive potential gains. A report by
Amony and L. Hunter Lovins of the Rocky
Mountain Institute in Colorado, Climate: Making Sense and
Making Money, alleges that America wastes $300 billion per year in
unnecessary energy; cuts of 30 percent are easily achievable through
better management, they believe.
Similarly, implementing environmental regulations is far cheaper than
most companies assume. Getting rid of sulfur dioxide emitted by U.S.
electricity producers was thought to cost $4 billion, but when carried
out, it cost less than half that sum.
Being green and clean is no longer an eccentricity but a necessity in
some areas of life. Airlines flying to Switzerland's Zurich airport are
to be charged extra if their planes are overly polluting; super-clean
jumbos will be patted on the nose and given a discount. This has
provoked anger among some organizations that say airlines shouldn't be
penalized if their planes meet international standards, but this is
going to be the way forward: it's not enough to meet the minimum
criteria; you need to think ahead and be greener than the competition.
Airlines also have the problem of spreading airborne diseases in their
cabins by using recycled air, which is cheaper than ventilating fresh
air. Sooner or later, companies will lose a lot of customers for this
economy and the ones who pay more attention to their customers'
environmental health will be laughing.
"Environmentally friendly" labeling is just the thin end of a
large consumer-driven wedge coercing producers and industries to think
greener than before. Perceptions of which companies are genuinely
"friendly" are expanding from product identification to
encompass corporate behavior. The European boycott of Shell's petroleum
after the attempted dumping of the Brent Spar offshore oil installation
is one example. Pharmaceuticals are especially vulnerable to similar
consumer boycotts
where there is a choice of products for particular conditions. Nestle has
already
been targeted for promoting powdered baby milk in developing countries.
If companies ignore such grassroots dissatisfaction of their
environmental performance, they are likely to suffer.
Major chemical and pharmaceutical companies (and the scientists who work
for them) know that survival depends on pleasing profit-hungry
shareholders; they won't listen to the emotionally charged arguments of
environmentalists. They will, however, listen to their accountants.
The best accountants realize that green is more than just the color of a
dollar bill.
Andrzej Krauze is an illustrator, poster maker,
cartoonist, and painter who illustrates regularly for
HMS Beagle, The Guardian, The Sunday Telegraph,
Bookseller, and New Statesman.
Send us your comments and ideas for future articles.
Endlinks
Does your company/organization practice environmental responsibility as a means of increasing profitability? Vote yes or no, and explain how, in our Poll.
A Brief Overview of the Natural Step - describes the principles that comprise this plan for sustainable life on Earth, and provides contact
information for Natural Step organizations.
Cool It! - a report from Friends of the Earth detailing how the elimination of subsidies
to greenhouse-gas-producing industries can improve our ecological outlook
and provide ten billion dollars for environmental solutions.
Welcome to the 1990s, Senator! The agreement was indeed signed and
shows no immediate indication of dying on the doorstep of the American
legislature, whereas the energy committee, along with many branches of
American industry and government, is slowly discovering that the U.S.
economy is inextricably linked with other nations' interests,
both economically and environmentally. The lessons are being learned
though a combination of science, consumer lobbying, and many new voices
from inside industry, all pointing out the folly of ignoring
environmental issues that now threaten to impact the bottom line.
For many years Krupp has been dismissed as a crank. Now, following the
rise of the nerd comes the rise of the eco-crank, with hard fiscal and
legislative action in support. The United Kingdom government is
considering shifting tax-raising emphasis from payroll to pollution,
potentially boosting employment. Other European governments are of a
similar mind.
Stronger parallels are being drawn between environmental responsibility,
fuel efficiency, and the underlying profitability of a firm. "We
believe there is a link between environmental performance and ultimate
investment values," says Derek Higgs, an investment manager at the
United Kingdom's Prudential Assurance insurance company. He is among 78
percent of members of the Confederation of British Industry who would
support a "green" tax if it dealt with environmental problems.
Also in the U.K., the Chemical Industries Association announced in
December 1997 a 20 percent cut in energy consumption of the 1990 level,
to be achieved by 2005. This unasked-for concession does not guarantee
lower emissions, since production could rise, but it signals readiness
to be ahead of legislation and in line with consumer awareness.
Legislating for the world's supplies of raw materials will never be a
simple matter, but one attempt is a Swedish model called 
Being green and clean is no longer an eccentricity but a necessity in
some areas of life. Airlines flying to Switzerland's Zurich airport are
to be charged extra if their planes are overly polluting; super-clean
jumbos will be patted on the nose and given a discount. This has
provoked anger among some organizations that say airlines shouldn't be
penalized if their planes meet international standards, but this is
going to be the way forward: it's not enough to meet the minimum
criteria; you need to think ahead and be greener than the competition.
Airlines also have the problem of spreading airborne diseases in their
cabins by using recycled air, which is cheaper than ventilating fresh
air. Sooner or later, companies will lose a lot of customers for this
economy and the ones who pay more attention to their customers'
environmental health will be laughing.
