Oct 03 2012

Are we better off going green than going with the stock market?

Published by at 10:03 PM under Uncategorized

The phrase ‘environmentally friendly’, along with ‘organic’, only brings one connotation for me – expensive. As a student, I do not own a car, however, I must admit, I rarely, if not never, purchase the organic option at groceries.So, when this topic came up in my Business Fundamentals class, it was easy to reflect on why it is so difficult for the general consumer to be more ‘green’ – too costly.

But for the business world, is it worth it to invest in sustainability rather than market shares? Writers Harris and Elm, in this article posted on the Huffington Post, seem to think so. Here are some quick stats they ran off:

  • If $2 trillion is invested in Energy Efficiency, by 2020, we will see an internal return rate of 17%.
  • A return rate of 17% is comparable to cutting the need for 64 million barrels of oil a day.
  • If every car in North America had the same efficiency as the Prius, we would no longer need to import oil at all from other countries. 
  • If every roof in the world was white, $2 trillion worth of carbon emissions would be eliminated (Black roofs retain heat).
So, in the long term, statistics suggest that investing in sustainability is even more profitable than investing in the stock market or even real estate. But the question I want to ask is – why? How does this benefit firms? The answer is simple – unlike consumers, who often go organic or go green due to values and belief that they are helping with environment, business interest in sustainability is much more focused on self-interest and maximizing profits than the greater good. Developments and investments in sustainable and energy efficient processes means more money goes directly back into the company – effectively cutting costs and maximizing profit.

 

 

 

 

No responses yet

Trackback URI | Comments RSS

Leave a Reply

Spam prevention powered by Akismet