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The Four Dimensions of Greenness

As more companies embrace corporate responsibility and environmental stewardship, they are beginning to realize that becoming a greener company takes more than a simple check-the-box approach.

Rather, becoming greener requires a comprehensive organizational commitment that is focused first on the inward actions of the company. It must then make a concerted effort to help customers become more environmentally friendly, before reaching out to involve communities and society.

All of this is supported by recent research we conducted to better understand business decision maker attitudes regarding the environment and green corporate behaviors among U.S. midsize and enterprise companies. Nearly 70 percent of businesses in our survey strongly agreed that companies have social responsibilities beyond the operating of their businesses.

What does this mean? It strongly suggests that business decision makers and hence, businesses in general, are embracing a broader role in society that extends beyond providing products and services to customers, and jobs to employees. This socially responsible viewpoint also establishes a baseline for understanding decision maker attitudes and opinions about environmentally conscious corporate behavior.

To better understand these attitudes, we asked our survey participants about different types of green business practices based on scale of importance.

The results broke down into three types of corporate behaviors.

Inwardly facing behaviors The most important group is inwardly facing, internal corporate behaviors that are relatively easy to implement and directly affect employees and may increase morale. That includes recycling, flexible work and commuting options, and greening internal business operations.

Business investment behaviors The second most important group requires both internal and external financial and other resource commitments. Examples include reducing environmental impacts of product design and production, offering eco-friendly products and services, employee carpool incentives, and green R&D projects.

Although carpooling incentives may be seen as an inwardly facing behavior, survey respondents recognized it would have a financial impact on a business. Not surprisingly, decision-makers from large enterprise organizations placed more importance on these behaviors that require investment than their midsize-company counterparts, further acknowledging the level of commitment needed for increased environmental stewardship.

Corporate outreach behaviors According to these decision makers, the least important group of indicators of green corporate behavior relates to outreach activities, including public education activities, contributing to conservation groups and volunteerism.

Though they may view these activities as the least important indicators of environmentally conscious corporate behavior, it doesn't mean that these activities are unimportant. For example, decision makers from enterprise companies place significantly more weight on public education than decision makers from midsize businesses.

The Four Dimensions of Greenness

The results suggest that companies can be evaluated based on four distinct environmental considerations.

• How well a company works to limit its greenhouse gas emissions and carbon footprint.

• How actively a company supports resource conservation, recycling, and waste reduction.

• How effectively a company demonstrates an organizational commitment to environmental leadership and stewardship through donations, public service, and other forms of outreach.

• How believably a company offers green, earth-friendly, or environmentally conscious products and services.

We asked those surveyed to rate these four categories by allocating 100 points based on scale of importance. We found that decision-makers believe all four pillars are important and necessary to demonstrate an environmental commitment.

Resource conservation was considered the most important, with the remaining pillars receiving similar importance. This strongly suggests that green is not simple; it is a multi-dimensional process without a single dominant consideration. All pillars are needed to fully describe a green corporate image.

The results also indicate that businesses should start at home -- within your own organization -- before including your customers, community and beyond. This dovetails with the view that corporate social responsibility expands stakeholder groups and is also consistent with other survey results that suggest green credibility is created through direct actions that impact business and benefit customers, rather than indirect or passive activities that have no direct bearing on business operations or customers.

The net is that you can't just talk the talk; you have to walk the green walk by helping both your own employees and your customers to be greener.

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