Green legislation is coming. Voters want it. The economy needs it. Climate change demands it. And now with Democrats holding the presidency and Congress there is a national legislative path for implementing it.
Your business questions should be: What will this legislation entail? Will it generate profits or higher costs? And, what should be done now in anticipation of green legislation being passed in 2021?
How Green Legislation Will Cut Costs and Grow Revenues
The good news is that green disruptive technologies have reshaped the focus of the sustainability movement. The days of focusing on saving polar bears is over. It was an admirable aspiration, but it failed to create voter or consumer mass activism because the green solutions threatened profits, raised prices and reduced jobs.
What has changed is the emergence of green technologies like solar, smart buildings, and autonomous vehicles that reduce costs while also accelerating job growth across America. For example, unless you live in shale country there is not much job creation from drilling for oil and natural gas. Solar technology can generate jobs anywhere there is sun!
And now green tech is least cost. For example, renewable energy is now least cost compared to fossil fuel electricity. Today’s electric vehicles are least cost over the life of the vehicle. Projections are that electric vehicles will be at acquisition cost parity with fossil fueled vehicles within the next few years, a goal that green legislation is likely to advance. What this means for your business is that green legislation that promotes adoption of least cost green technologies is a path for reducing your business costs and winning customers.
How to Prepare Your Business for Green Legislation
Green legislation will almost certainly require reporting on how a business impacts human and environmental health. This is not as radical a change as it might appear. Major corporations have for years been inputting a “carbon tax” in their investment decision assessments to represent the environmental costs tied to fossil fuels and chemicals. ESG (Environmental, Social and Governance) measurements and reporting are growing into a corporate America business practice demanded by investors and consumers.
It is likely that green legislation will require ESG business measurements and reporting for all businesses. Counterintuitively, this is a business opportunity. The ability to look beyond the income statement is a huge competitive advantage in today’s creative chaos environment of rapid change enabled through disruptive technologies. Think no further than the COVID-19 pandemic. The restaurants that won market share were the ones with drive-through windows and a digital commerce platform. Disney+ achieved record customer acquisitions and a higher stock price even as Disney’s theme parks were closed or open under reduced operations.
Your immediate business step in anticipation of green legislation is to look beyond your financial accounting to identify green risks and opportunities. Measure your waste stream and fossil fuel consumption. Analyze this against green technology solutions and the growing consumer focus on business authenticity, transparency, and sustainable credibility to find your green potential for making money and winning customers.
Identify Your Business Green Risks
Green legislation is going to separate businesses into those that profit and those that lose based on their environmental and human health impacts. Whether your business is a winner or loser will be determined by its ability to adopt sustainable technologies and business practices.
For example, what business does not rely on plastic? It almost always costs less and/or is more effective than using paper or metals.
The only problem is that plastic waste has reached a volume tipping point where micro plastics are in all of our bodies! Plastic’s health impacts include cancer and cardiovascular diseases.
Plastic’s human and environmental impacts are now a major voter/consumer issue. For the plastic industry the coming green legislation will push them into either delivering cost effective solutions or suffer market share loss. For businesses that use plastic, green legislation will require strategic action to find technology and/or circular economy practices that satisfy legislative mandates and consumer expectations.
Plastic is just one example of how all businesses must begin to strategically evaluate their green options in anticipation of green legislation. Waiting to see the legislation is waiting too long. Passage of green legislation will only confirm what is obvious now, namely that emerging technologies, business practices, and consumer aspirations are all pointing to going green as a path for winning competitive advantage.
Green legislation is coming. Your immediate business task is to audit your business in order to identify your risks and opportunities. That might be the best investment you will make in 2021!