VideoWe asked a number of notable individuals and organizations to share their thoughts on the question, "Can companies still afford to be green?"
CFO.com welcomes your thoughts, too. Send your letters to: The Editor, CFO.com, 111 W. 57th St., New York, NY 10019, or email us at DaveCook@cfo.com. Please include your full name, title, company name, address, and telephone number. Letters are subject to editing for clarity and length.
Your question suggests companies could afford being green so far — a question that's difficult to answer, whether looking forward or back.
There is a lack of consistency of accounting in the industry for such expenditures. Drawing a precise line between what is or isn't green appears to be an arbitrary task at best — due, if you will, to the many "shades of green" that are possible.
Companies must adopt responsible environmental policies and practices in the production and delivery of their products and services; our "shrinking" world requires it to ensure any reasonable degree of quality-of-life for all of its inhabitants. Ultimately, it will be all of its inhabitants who will pay and who therefore must find a way to afford environmentally responsible practices as individuals and members of institutions. It is essential to sustain what we all treasure about the environment.
E. B. Galligan
Senior Director and Chief Financial Officer
Port of Portland
Portland, Oregon
Green issues are actually rising in importance for many corporations as they begin to realize their environmental liabilities go beyond health and safety. These rising environmental liabilities for greenhouse-gas emissions are now important financial issues.
One cost-effective mechanism to reduce a company's "carbon footprint" is through emissions trading, which today is an emerging market but will shortly become a global market, especially for multinational companies. Other means to reduce environmental liabilities are through the purchase of renewable energy and its credits as well as the reduction of energy usage, which is beginning to have a financial value in the emerging "negawatt" markets.
Rather than looking at environment as a cost, sanguine companies consider the P&L as they would for any business unit. "Green trading" offers corporations the means to reduce their emissions, make money, and be responsible corporate citizens. Not only can companies afford to be green, but the impending costs make it more fiscally astute to be green sooner rather than later, when the costs will be higher.
Peter C. Fusaro
Chairman
Global Change Associates
New York
Your readers might be interested to know more about the EPA's plans for the nation's environmental protection programs. The agency's strategic plan for 2003-2008 is posted at www.epa.gov/ocfo/plan/plan.htm. It elaborates on the EPA's longer-term goals for air, water, and land; healthy communities and ecosystems; and compliance and environmental stewardship. This plan helps orient agency priorities and could prove useful to corporate executives seeking to plan their own organizations' environmental strategies.
We appreciate your efforts to address environmental issues from the point of view of the corporate and CFO community.
Judi Brown
Director of Communications
Office of the Chief Financial Officer
Environmental Protection Agency
Washington, D.C.
Sometimes it helps to have perspective.
Buzz Aldrin, the lunar-module pilot of Apollo 11, discussed his view of the Earth from the Moon this way: "The soft, glowing presence of planet Earth in the black abyss had a pristine clarity uncaptured by photographs. Images on film lack the subtle shades, the brightness, and the depth of the living sphere, which bulged out of the blackness as I sailed outward on Apollo 11... From the deep blue of the Mediterranean, all of Europe and Africa sprawled away in soft pastels, innocent of political boundaries. And from the surface of the moon, where I could cover with my thumb the site of all human history, the Earth seemed fragile as a Christmas ornament, drifting like a lost balloon on the black velvet of space. The image of a living Earth, capable of extinction, disarms illusions of individual or tribal isolation. We gained more than altitude in those 66 years from Kitty Hawk to the moon. Seeing Earth not as an extension of man, but man as an extension of Earth."
Gene Cernan, commander of Apollo 17, discussed his view this way: "It was something so awe-inspiring you had to sneak a glance at it every chance you got. It's too beautiful to have happened by accident. To me, it was like sitting on God's back porch, looking back home."
The mission statements and value statements of corporations are designed to provide perspective, not only to inspire but also to help corporations clarify their roles and responsibilities to multiple constituents, what I call the "5-Cs":
• The Corporation itself and its internal and external suppliers (i.e. board, management, employees and suppliers)
• Capital providers (investors and lenders)
• Customers
• Critics (rating agencies, media, and special interest groups)
• The Community (including the local and broader communities in which the corporation operates and the governments in those communities appointed to represent community interests)
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