EC: Feeling grows that going green is good for business.

EC: Feeling grows that going green is good for business. - Chemical companies head the big spend on planet earth, writes Peter Wilsher.

Last Updated: 31 Aug 2010

Chemical companies head the big spend on planet earth, writes Peter Wilsher.

The real environmental message was memorably put recently by a Swedish chief executive, Bjorn Stigson, head of the engineering firm ABB Flakt. "We treat nature like we treated workers a hundred years ago," he said. "We included then no cost for the health and social security of workers in our calculations, and today we include no cost for the health and security of nature."

But now that is starting to change. After the froth of green consumerism in the 1980s, Europe's boardrooms (or at least some of the more far sighted of them) are at last starting to get a serious grip on the managerial responsibilities - and opportunities - inherent in the notion of "cleaning up the planet".

The sky above Dunkirk, on the north coast of France, used to glow a lurid orange, as the giant blast furnaces of Usinor Sacilor, the European Community's second largest steelmaker, belched out their daily consignment of atmospheric pollution. Now that once-familiar phenomenon is becoming a fading memory as the company focuses on the development of less damaging production methods.

But there is nothing cheap or cosmetic about the policy shift. The directors say that they are now spending 15% of their total investment budget on these emission-reducing technologies, culminating in an ambitious scheme to eliminate coking coal entirely from the process in favour of directly injected pure carbon. Major beneficiaries (apart from the long-suffering people of Dunkirk) already include the computer firm Machines Bull and a small army of software programmers who have been given an FFr 100 million, two-year contract to develop the artificial intelligence package needed to monitor the new way of doing things.

Indeed, the money and brainpower now being mobilised in the cause of "global good-neighbourliness" is in many cases reaching staggering proportions. Multinationals like ICI and Ciba-Geigy have identified the environment as one of the three or four key issues determining their future, and have developed far-reaching green strategies. Some of the results, like ICI's biodegradable plastic, biopol, are already on the market (making, in that case, bottles which are stable in the bathroom but quickly rot on the compost heap).

But the real objectives are much more pervasive - the implementation of a philosophy like that of the German chemicals firm BASF: "to manufacture safely products which can be used and disposed of safely". It sounds simple if you say it quickly. But the underlying ideas are beginning to revolutionise the way in which businesses go about setting and achieving their objectives.

The big chemical groups are in the forefront, as they were probably the first to see that the rising distaste for filth and waste among their customers, and even more importantly in the communities where they wished to operate, was beginning to pose a threat to their entire commercial future. So a company like Bayer now spends 20% of its total manufacturing budget on environmental protection - roughly the same as its outlay on energy or labour.

And though such determined activity is still rarer in sectors such as oil and cars, there are significant exceptions. Chevron, for one, is planning for a 10% annual expansion in its "green" budget throughout this decade ("The only growth area of our industry," as one spokesman gloomily recognised). And along similar lines, Fiat has just signed a wide-ranging set of agreements with the Italian Government, designed to speed up the Europe-wide attack on toxic vehicle emissions, which is scheduled to cost the company an annual £1.14 billion over the next three years.

Not all of this is voluntary. For a decade now the EC countries have been making up for their initial slowness. In the 1970s the United States and Japan made most of the running. Paris, Rome, Madrid and certainly London dawdled complacently while Washington and Tokyo mounted an increasingly aggressive attack on such unfriendly activities as the spewing out of acid rain.

A decade later, when Germany realised that its beloved forests were rapidly dying, and that even the most distant of its industrial neighbours were culpable, there was an abrupt change of heart. In a flurry of legislative and diplomatic activity, Bonn forced through progressively tougher limits on the local emission of such things as sulphur dioxide and nitrous oxide, and the Long Range Transboundary Air Pollution Convention, signed by 21 countries in 1985, made sure that they would soon become the continent-wide norm. Then they were tightened even further by 1988's Brussels target-setting Directive on Large Industrial Plants, and it became clear that a whole tranche of once-acceptable corporate behaviour had been declared beyond the social (and legal) pale.

With road transport there has been a similar, but in many ways even more protracted, conversion. It was as far back as 1970 when the US passed its Clean Air Act, which set standards so demanding as to require the development and universal installation of the catalytic converter. But only in 1989, after the most bitter of ministerial battles, did the EC governments, as a group, succumb to the mounting pressure from Germany, Holland and Denmark, and agree to follow suit - only to find that the US, with its new 1990 clean-air demands, had moved the goalposts almost out of sight. But here, as in many other environmental matters, the more clear-sighted commercial managements, like Fiat, are moving swiftly and well ahead of the parliamentary draftsmen.

All of their really imaginative and effective programmes have important factors in common. They embody a commitment from the very top of their particular corporate hierarchy. Their effective implementation requires a company-wide cultural shift, so that "thinking green" becomes as habitual as "thinking cost-saving" or "thinking profit" ... And in almost every case they set targets which are well ahead, and often far in advance, of local regulatory requirements. Together these suggest there has been a permanent shift in perceptions. Plenty of people scoffed when the 3M group first promoted its aspiring PPP slogan "Preventing Pollution Pays", but now such ideas look like the purest of common sense.

Once, when I was visiting Tokyo during Japan's period of breakneck growth, there was suddenly a day of pure blue sky in place of the usual impenetrable smog. When I commented on this, my companion sucked his teeth like a man in acute pain and said: "Ah, recession weather." On that occasion the unaccustomed sunshine vanished with the first hint of economic upturn. But I feel that Dunkirk's relief may prove more permanent.

(Peter Wilsher is assistant editor of the Sunday Express.)

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