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Business Catches On

Preventing pollution and saving resources begin to look good for the bottom line, too

By Staff writer of The Christian Science Monitor / January 12, 1993


`WE must ensure that the polluter pays. Be they private citizens; be they businesses - large or small; be they government agencies; they must pay rather than pass on, postpone, or try to duck the environmental impact of their actions."

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This hard-nosed assertion - which sounds like it might have come from an environmental activist - was the key message of Frank Popoff, chairman and chief executive officer of the Dow Chemical Company, at the recent "economic summit" convened in Little Rock, Ark., by President-elect Clinton.

It is a message that is increasingly heard from corporate leaders who see that preventing pollution and conserving natural resources are not only good for the environment but good for business as well. Around the United States, they are setting ambitious goals for merging environmental and economic interests. And they are joining up with fellow executives and environmentalists to find innovative ways to meet these goals while breaking down the old confrontational barriers.

It's not just a matter of their building a "green" corporate image at a time when Americans increasingly identify themselves as pro-environment, or of avoiding government regulation by promoting "market mechanisms" - although both of these are part of the picture. Corporate environmentalism also is seen in business as necessary to succeed in an increasingly competitive international marketplace.

For example, John Bryson, chairman and CEO of Southern California Edison Company, points out that "competitors like Germany and Japan can produce a unit of economic output for roughly half the energy we use."

"Energy efficiency will lead not only to technological development, but to economic growth and environmental improvement," Mr. Bryson told the Arkansas gathering last month. "It will provide the basis for producing the next generation of globally competitive US products and services."

Energy efficiency alone, says Richard Clarke, head of Pacific Gas & Electric (the nation's largest public utility), could create half a million new jobs in the next five or six years and another half million by the year 2010. This conclusion builds on the theory that a dollar saved on utility bills is a dollar that can be spent on economic development, lower costs, or environmental protection.

While many suspect that environmental protection costs jobs - which it does in some local and regional instances - there is increasing evidence that this is not generally the case.

Political scientist Stephen Meyer of the Massachusetts Institute of Technology recently completed a study tracking the relationship between environmental programs and economic performance in all 50 states during the 1970s and '80s.

"The data revealed a clear and consistent positive relationship between the states' environmental effort and their economic performance," Professor Meyer found. "States with higher environmental rankings outperformed states with lower environmental rankings on four of the five economic growth indicators."

While the data do not necessarily prove that environmental protection stimulates economic growth, Meyer observed, "it is absolutely clear that the [negative] environmental impact hypothesis is repudiated by the data."

Many businesses, however, have already concluded that environmental protection can increase profits and a competitive edge.