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The Guardian: Going green starts to gain momentum

Deborah Hargreaves
Friday June 1, 2007

Consumers have more clout than they realise. Certainly, many companies have converted to green causes under sustained customer pressure. And while much of what the corporate sector says about climate change can be dismissed as hot air, there are the beginnings of some very real initiatives.

Most leading companies now espouse some kind of green strategy towards reducing their carbon footprint. Of course, it is easier for those businesses with low emissions such as banks to boast about their environmental credentials. It often backfires when the big polluters in the oil and power sectors try to do the same. Shell has taken a lot of flak over its adverts showing flowers sprouting from a refinery and BP’s move to brand itself “beyond petroleum” has been met with much scepticism.

It was therefore brave of Scottish and Southern Energy to suggest it will try to sell less of its core product. The electricity producer has earmarked a range of financial incentives for users to cut down on their consumption.

This is very much driven by customer interests. SSE says about 10% of its consumers are eager to cut down. It sees its plan as a bit like a loyalty card and a way to hold on to customers in a fiercely competitive market. Investors rewarded its foresight with a jump in the shares.

Another reason for firms to boost their green credentials is pre-emptive. With President Bush finally converting to the cause, many businesses are concerned that if they do not cut down on carbon, they will be forced to do so.

Ryanair is obviously getting edgy about the media coverage of the environmental consequences of cheap flights. While this is yet to have a discernible effect on customer behaviour, it can only be a matter of time.

There is already some anecdotal evidence that people are starting to feel guilty about taking too many short-haul flights. A poll in last week’s Guardian showed that almost half of air travellers questioned said they had changed their behaviour because of the environmental impact of flying.

This is potentially bad news for budget airlines whose entire business model revolves around encouraging people to fly more. Governments have so far shied away from shackling the airline sector, but it remains vulnerable to regulatory intervention.

For smart companies, there is a business opportunity in climate change. There is plenty of money to be made from cleaner energy and environmental technology. Share prices for clean technology companies have been rocketing in the US. Investors are keen to jump on the green bandwagon.

With governments still parleying about the need to cut emissions levels, the real influence lies with the consumer and the investor. Spending power is what makes the corporate sector sit up and listen.

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http://business.guardian.co.uk/story/0,,2092887,00.html

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