Green innovation rises from the ashes of the recession

As companies adapt and change their ways of operating, Nicole Clucas asks why some waited for a recession before re-engineering their business.

The current economic climate has not given us much to smile about in recent months. The doom and gloom of unemployment, insolvencies and the cuts announced by the UK Government as part of its Comprehensive Spending Review have made for rather depressing reading. However, numerous organisations are fighting their way back from the brink by using green innovation to create new products and services, or re-engineering their business to meet changing consumer demands.

Several of the companies cited in this edition have announced initiatives relating to recycling products, packaging innovation and producing energy from waste. Innovation has always been a key part of any company’s strategy to survive in the long term. These latest approaches to producing green products or more sustainable ways of working have a series of wider benefits for both the company and its customers. Moreover, the benefits also seep into the marketplace as further innovation is spurred through competition.

One particularly significant development has been the creation of sustainable products through a cradle to cradle approach. This involves avoiding old style planned obsolescence by designing products that can be up-dated and re-used at the “end” of their life, as fashions change or technology moves on. So for example, mobile phones and other electronic equipment is now manufactured in a way that allows the user to upgrade the device rather than replace it.

However, it would be wrong to assume that his type of innovation is only relevant in a downturn. Sustainability has the double advantage of providing benefits during both boom and bust. ”Recession Britain” was a report released last year by the Economic and Social Research Council on the impact of recession on people’s jobs, businesses and daily lives. It found that firms that have innovated at some point in the past are better able to succeed during a recession. You only have to look at companies like Woolworths, whose failure to move away from their traditional model saw them lose out against the fast moving Amazon’s and the Tesco’s of the world.

Our planet’s resources are limited, and the emergence of new power players such as China and India has only served to deplete resources and degrade the environment further, albeit driven by the West’s demands for the latest television or item of clothing. WWF’s 2010 Living Planet report revealed that humanity’s demands on the earth’s resources are sky-rocketing. The report shows that our consumption of natural resources has doubled since 1966 and we are currently using the equivalent of 1.5 planets to support our activities.

So with this in mind, the question is, why are some companies waiting for a recession to adapt and change their ways of operating? Surely there is merit in considering the environment at any time, given that doing so has mutual benefits for both business and society?

While green innovation is only one of the drivers towards more sustainable business models, it is clearly an important element. We are currently experiencing both a rapid development in new technologies and the increasing degradation of our planet. Those companies that are able to respond positively to these two forces will not simply ride out this recession more successfully, but will prosper in the longer term.

Nicole Clucas is a Senior Researcher at Corporate Citizenship. She is the editor of Corporate Citizenship Briefing and also provides research and consultancy services across a broad range of clients. Prior to joining Corporate Citizenship, Nicole worked in the Stakeholder Strategy team at Pfizer where she managed the employee volunteering programme and before that she was part of the Strategy team at Clownfish. Nicole has an MSc in Environmental Technology from Imperial College London.