Businesses doing better on environmental issues
(MoneyWatch) U.S. businesses are continuing to improve their environmental sustainability, according to a new report. The study by GreenBiz.com found improvements in greenhouse gas emissions, energy efficiency, air pollution and recycling.
Yet despite these trends and the decline in economic output caused by the financial crisis, companies have increased their reliance on natural resources. Notes the environmental research firm in the report:
Although companies are developing ways to deliver goods and services more efficiently, their overall reliance on natural capital grew, environmental costs rising by 8 percent to almost $352 million between 2007 and 2011. Companies have yet to decouple growth from environmental damage. This is mainly because of our global economy's continued reliance on carbon-intensive fossil fuels, which meant that 42 percent of costs came from greenhouse gas emissions.
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One factor driving companies to adopt more environmentally friendly practices -- it can save them money. Awareness of these benefits grew in the 1990s when Wal-Mart (WMT) realized huge savings by using less packaging, as well as increased fuel efficiency and recycling.
Perhaps the most impressive gain made by U.S. companies is in the area of energy efficiency. According to Greenbiz.com:
In 1980, it took an average of 9,297 BTUs to generate one dollar of gross domestic product (in 2005 U.S. dollars) worldwide -- what is referred to as "energy intensity." By 2009, worldwide energy intensity fell by 20 percent, reflecting more efficient use of energy. However, in the United States, energy intensity fell by a whopping 45 percent over the same period.
This trend, combined with increased energy efficiency in the home, means the U.S. will likely see only a 1 percent increase in energy use between now and 2040, according to the U.S. Energy Information Administration.
Businesses also have made headway in their emission of greenhouse gasses (GHG), which contribute to global warming. From 2007 to 2011, emissions by U.S. companies dropped 4 percent, while globally they increased 0.75 percent.
In addition, U.S. companies are generating less solid waste. In 2007, they sent 3.96 metric tons to landfills per million dollars of revenue. Although that increased to 6.15 metric tons in 2009, it fell to 5.5 metric tons in 2011.
Other types of air pollution studied in the GreenBiz report -- dust, acid rain and ozone precursors; volatile organic compounds; ozone-depleting substances; and metal emissions -- have also decreased. According to the study, "Expressed in terms of intensity -- emissions per unit of revenue -- the air appears clearer. Overall, air emissions intensity decreased just over 30 percent worldwide between 2007 and 2011."
Unfortunately for the planet, total emissions have increased as a result of increased production and growing consumer demand from developing nations. Although China has pledged to cut air pollution, progress has been slow. One example: Earlier this year Beijing was engulfed by smog so bad that air in the city was even worse than the poor quality recorded by standard indexes.
