Impact of green strategies over business performance

Abstract

Going green is golden. The trends around the globe are pushing the companies to have environmentally sustainable development along with the economic growth. This has mooted many companies to initiate greening programs mainly to address the pressure it receives from the government regulations, customer, stake holders, media and society at large. Although it is advocated by many experts that the sustainable development would bring increased revenue to the organization, many companies are yet to buy for it. We could expect to see more stringent policies and regulations from the government on making more environmentally cleaner products and processes. Green policy is a commitment companies define and try to achieve their targets. The goals can be categorized into carbon foot print shrinkage, water usage, more efficient use of natural resources and packaging materials, waste reduction, energy efficiency, alternate energy and reducing environment risks. We would like to analyze the impact of these green policies and environment sustainability measures over the companies operations and evaluate whether implementation of Green energy policies in a production process would affect the performance metrics of the company, if so in which direction. Our objective is to arrive at a judgment on whether such efforts could be used by companies effectively for a specific industry to implement an environment friendly operation. We focused our study on two major industries namely automobile, being a major industry and highly affected due to environmental norms created by legislations, and IT industry, as the major growing industry and having contributed 2% of carbon emission equivalent to that of airline industry. A set of 10 companies were selected from each of these industries; their green initiatives are collected across various operation parameters, through the reports published by these companies. From the obtained data we identified the correlation between the parameters and the business performance of these companies. We could identify the strength of relation between the sustainable initiative parameters and the business performance. The result of the analysis supports the theory to a certain extent for automobile industry whereas a significant relation couldn t be established for IT industry. Apart from the parametric measurements, we also created a questionnaire similar to that of ABCD checklist of Oliver Wight. This questionnaire addresses sustainability initiatives /commitments across five major dimensions of a company, which when surveyed and evaluated would help in understanding the company s degree of commitment across these dimensions towards sustainability measures. The result of the survey along with its relation to company s performance, once identified, could help the company to focus on those areas where the improvement or relaxation in commitment might be necessary. Our analysis shows a significant contribution of two major parameters to the business performance. The company should be focusing mainly on its corporate commitment and its planning and control process for its sustainable measures if it needs an improvement in its performance.