Green Capitalism for Greener Cities

S. Kavin Mary
Research Scholar, Department of Management Studies, University of Madras, Chennai.
Prof.P.T. Srinivasan
Professor and Head, Department of Management Studies, University of Madras, Chennai.
Astract
!"ploitation of natural resources due to industrial development and the increasing
population over the last century has resulted in gloal #arming and other unanticipated
climatic conse$uences. %he degradation of the main ecosystems is finally driving man to
introspection. &orld leaders are no# concerned aout future sustainaility of human life, as
there is no specific deadline of ho# long earth can endure the destructions #rought in the
name of economic and scientific progress. !arth's aility to support its pro(ected population
of ).* illion in +,*, is $uestionale -.!CD, +,,/0. Since the ma(ority of earth's
population is concentrated in the cities, uran sustainaility has ecome the topic of
discussion across #orld forums.
Consumerism and mar1et operations are undermining environmental #elfare. %he
consumption of industrial products is higher in uran areas. %he efforts of the 2overnments
and 32.s to stop environmental destruction, is often negated y industrialists' production
activities and mar1eters' efforts to promote e"cessive consumption for the sa1e of
profitaility. Hence capitalism and environment movements are emerging as t#o opposing
forces. As a result, many are of the opinion that uran sustainaility is uncertain and
proaly unattainale. Ho#ever, it should e rememered that capitalists are important
sta1eholders of the environment. %he depletion of natural resources #ill cause depletion of
usiness resources. Hence, the aim of this paper is to highlight the importance of green
capitalism as a 1ey factor for achieving uran sustainaility.
Key words: green capitalism, sustainale production, uran sustainaility
Introduction
4ndustriali5ation and urani5ation have made sustainaility of life uncertain.
!nvironmentalists, see1ing to redress environmental in(ustice, argue that since the steps initiated
y government and industry are insufficient, the outcomes produced are less than satisfactory.
%here is no# a genuine need for #or1ing in accord to protect mutual interest y setting aside
pre(udice and differences. 4naility to achieve ade$uate results has triggered cynicism on the
transparency of motives #hile e"ecuting green initiatives. !fforts to raise a#areness for reducing
the negative impact on environmental resources have not met #ith the necessary $uantum of
success. Many opine that uran sustainaility is doutful considering the increasing population
and consumption patterns. Conse$uently, the concept of uran sustainaility has come under the
microscope in the last couple of decades. .nly #hen industrialists traverse the green path
voluntarily, the results can e effective. Hence the concept of green capitalism, hitherto
sniggered at, needs to e evaluated o(ectively in a positive frame of mind y government and
capitalists ali1e.
1
Exploring Green Capitalism
Prudham -+,,/0 defines green capitalism as a set of responses to environmental change
and environmentalism that relies on harnessing capital investment, individual choice and
entrepreneurial innovation to the green cause. 2reen capitalism see1s to ta1e into consideration
the environmental impact in the capital accumulation process y modifying production processes
through innovation. 4n +,,6, Ha#1en, 7ovins and 7ovins revolutioni5ed capitalistic thin1ing in
their oo1 referring to green capitalism as 8natural capitalism'. %he three governing principles of
natural capitalism are to eliminate the concept of #aste, shift economic focus from processing
materials to creation of service and reverse planetary destruction y investing in natural capital.
&aste elimination is made possile y innovation of production processes, to reduce defect rates
and electricity consumption, and reusing materials to eliminate to"icity. 9ocusing on service
creation helps the green capitalist to improve customer relationships y meeting value needs
rather than (ust the need for material ac$uisition. 9inally, Ha#1en et al. state that investing in
ne# measures for re(uvenation of natural capital can help in the reversal of the destruction
#rought y man and industry.
%he term 8green capitalism' may seem to many an o"ymoron. According to 7evy and
3e#ell-+,,,0 organi5ational claims of environmental support are often seen as 8pulic relations
green#ash'. !nvironmentalists and capitalists have al#ays een on opposing sides of the
negotiation tale. %herefore, it is a shared perception that green capitalism #ill need to e thrust
upon industrialists rather than voluntarily ta1en up. Ho#ever, gloal #arming has emerged as a
significant threat that even profit:ma1ing capitalists cannot fail to ignore. %he re:distriution of
resources proves this point. &hen industrial revolution too1 place, s1illed laour #as scarce
#hile natural resources #ere availale in plenty. %oday, #ith the tipping of the scales, human
resources are availale in plenty #hereas the same cannot e said for natural resources.
%he arrier for eager capitalists #aiting to ta1e up the 8green cause', is the ovious
concern regarding shrin1ing profit margins and alienation of shareholders. ;rennan and ;inney
-+,,)0 as1ed /) senior mar1eting professionals if they #ould e #illing to trade profits for
sustainaility. &hile +< respondents said they #ere #illing to tradeoff profits, an alarming =*
#ere candid in saying 8no'. ;rennan and ;inney felt that, of the remaining respondents, +/ could
e persuaded to forego profits for sustainaility. %herefore, ma(ority of the professionals can e
#on over #ith a it of governmental persuasion and over#helming pulic opinion. And
companies that fail to get on the 8green' and#agon, ris1 future political attac1, pulic outcry,
strict regulation and possile legal liaility.
Roddic1 -+,,)0, founder of ;ody Shop 4nternational, argues that it is possile to invest in
the community and still e financially 8resolute'. Capitalists investing #isely need not forego one
for the other. Successful organisations li1e 4nterface, &al:mart, Dell, *M have emraced green
capitalism and are the etter for it. %heir financial statements continue to sho# mar1ed increase
in profits. Seligman -+,,)0 holds that the result of including a company li1e &al:mart in the
campaign for conserving nature is greater than the effort of any 32.. %his is ecause &al:mart
2
#ith its >,,,,, suppliers, 6.) million employees and 6), million customers every #ee1 has far:
reaching conse$uences.
Green Capitalism in India
82oing green' has ecome the ne# mantra chanted y several 4ndian capitalists. 9or
instance, %ata 2roup Chairman -%he %imes of 4ndia +,6,0 recently admitted as eing committed
to emar1 on a group:#ise initiative to ecome eco:friendly. As a result of this commitment %ata
Steel aims to reduce its caron emissions from the ?amshedpur plant from 6.) tonne to 6.@ tonne
per tonne of li$uid steel y +,6+. %a( hotels #ill no# feature eco:rooms that contain energy:
efficient mini ars, organic ed linen, nap1ins made from recycled paper and so on. An electric
version of 4ndica, a popular model car, #hich runs on polymer lithium ion atteries, #ill e
introduced in !urope this year. +<A of the po#er generated y %ata Po#er over the ne"t 6, years
#ill e from rene#ale resources. Data$uest -+,,)0 reports 4% companies in 4ndia as having
devised strategies for reducing po#er consumption, recycling paper and creating green spaces in
order to provide eco:friendly services.
&hile most companies have entered the environmental protection foray recently, there
are a fe# #ho have een conscientiously committed to eing sustainale from the time of
inception. .ne such shining e"ample is that of 3estlB 4ndia's Moga factory -Rao, +,,)0.
!stalished in 6/>6 in Pun(a, this factory has ensured its continuing success y facilitating the
gro#th of the local mil1 farmers through farmer education and technical assistance. %he farmers,
vie#ed as partners y 3estlB 4ndia, are empo#ered #ith technical 1no#:ho#, provided #ith
environmentally friendly e$uipment and are taught sustainale practices. 3estlB has een ale to
prove that long:term sustainaility can e achieved #ithout foregoing economic profitaility.
Most 4ndian companies have egun ta1ing efforts to turn green, primarily driven y
international usiness norms. 4t should, ho#ever, e rememered that this is (ust a eginning of
the greening process. Corporate social responsiility not only encompasses social development,
it also means protecting the environment and assisting in the reversal of environmental damage.
Hence, failure of 4ndian capitalists to ta1e up green capitalism in a serious vein #ould lead to
loss of pulic image, and suse$uently result in shrin1ing profit margins, as domestic mar1et
forces egin to clamor for environmentally friendly practices and products.
Pathway to Green Capitalism
Richard ;ranson -;;C 3e#s +,,>0, the celerity entrepreneur, pledged appro"imately
C6.> illion -* illion USD0 in +,,> to#ards fighting climate change. %o ;ronson's antagonists
this seemed to e a gimmic1, part of his attention:see1ing ehaviour. Det, this C6.> illion is no
meager sum. 4n fact, the amount that ;ronson pledged is the e$uivalent of all the profits of
Eirgin Atlantic and Eirgin trains for the ne"t ten years. Hence, the announcement of the Eirgin
2roup Chairman spo1e of a serious commitment to environmental protection ac1no#ledging his
sustantial ecological footprint. !very capitalist need not to# the same line in their crusade for
green capitalism. Ho#ever, they need to ac1no#ledge a genuine dedication to the environmental
cause. %herey the first step to#ards green capitalism is articulating a clear environmental vision
3
of #hat is sought. .nce this is done, garnering support for this mission #ill not prove to e an
arduous tas1.
Capitalists then need to evaluate if the product or service that they offer is sustainale.
!very product, eginning from the conception stage to the consumption stage, ta1es in energy
and produces #aste. %he ne"t step to#ards greening one's organi5ation is to redesign systems
and process ta1ing into consideration environmental conse$uences. 4t has een advocated that
organi5ations should calculate their ecological footprint for ensuring sustainale production. %he
7o#ell Center for Sustainale Production -7CSP, 0 defines sustainale production as,
The creation of goods and services using processes and systems that are: non-polluting conserving of
energy and natural resources economically efficient safe and healthful for wor!ers" communities" and
consumers and" socially and creatively rewarding for all wor!ing people.
.rgani5ations li1e 4nterface Corporations have significantly cut do#n on po#er
consumption y constant innovation and #illingness to invest in the green cause. A sincere effort
is made y these organi5ations to reduce #aste and to provide products #hich are safe for
everyone. 7ovins et. al.-6///0, insist that in order for 3atural Capitalism or 2reen Capitalism to
prevail, companies must increase the productivity of natural resources dramatically, shift to
iologically inspired production models, move to a solutions:ased usiness model, and reinvest
in natural capital in order to replace #hat is used in the production process.
Rao -+,,)0 argues that companies need to have a suitale environmental policy and ma1e
efforts to integrate all the suppliers, usiness partners and consumers in their greening initiative.
%he final ingredient re$uired for emracing environmentally friendly usiness practices is
8courage' to confront all opposition for producing products that are sustainale -Arogast, +,,)0.
#ddressing $r%an &ustaina%ility
%he concept of uran sustainaility gained momentum #ith the 6//+ U3 !arth Summit
held in ;ra5il. Addressing uran sustainaility has ecome one of the top priorities for #orld
leaders today. 3ot a day goes y #ithout mention of 8sustainale development' in the media.
Achieving sustainaility is deemed elusive and unattainale. According to Haughton -6///0, in
order to attain uran sustainaility, economic and social systems should encourage
environmental ste#ardship of resources for the long:term, ac1no#ledging the inter:dependency
of social:(ustice, economic #elleing and environmental ste#ardship.
9or reali5ing uran sustainaility Campell -6//>0 postulates a triangular model. 4n an
effort to promote greener cities, planners have three priorities and three conflicts : Social:(ustice,
economic development and environmental protection eing the three types of priorities that city
planners strive for. Many planners #or1 to#ards only one or t#o of the priorities. 9or e"ample,
the economic development planner loo1s at the industrial aspects of the city, emphasi5ing
production, consumption and distriution. %his planner evaluates his success ased on the city's
aility to attract ne# industries in comparison #ith other cities. %he environmental planner on
the other hand sees the city resource:consuming and #aste producing. %he sustainaility of the
city and protection of natural resources is the main priority of the environmental planner.
4
Campell states that the primary concern of the e$uity planner is to ensure e$uitale distriution
of resources and opportunities, #hich often stagnates in the hands of a select fe#.
Any planner focusing on all three fundamental priorities is #or1ing to#ards sustainale
development and #ill encounter three conflicts namely, resource conflict, development conflict
and property conflict. %here is resource conflict #hen economic development competes #ith
environment protection. A planner, #ho promotes the interests of the usiness in lieu of social
development, has (ust succumed to property conflict. Sometimes #hen the city planner tries to
protect the environment at the cost of industrial development, people perceive social in(ustice.
%his is ecause industrial gro#th signifies (o opportunity. ;y denying economic gro#th the
planner is denying social (ustice, hence there is development conflict. &hen there is a dilemma
on #hether natural resources need to e compromised or preserved for industrial gro#th, a
resource conflict arises. Campell says that the planner is placed in a difficult position, having to
alance all three conflicts for achieving uran sustainaility.
Agenda +6 of the United 3ations Conference on !nvironment and Development -6//+0
recogni5es the importance of involving usiness and industry for achieving sustainale
development. 4t states that,
Business and industry, including transnational corporations, play a crucial role in the
social and economic development of a country. A stable policy regime enables and
encourages business and industry to operate responsibly and efciently and to
implement longer-term policies. Business enterprises, large and small, industry,
including transnational corporations, and their representative organizations should
be full participants in the implementation and evaluation of activities related to
Agenda 21.
(sec. !.1"
A positive contribution of business and industry, including transnational corporations,
to sustainable development can increasingly be achieved by using economic
instruments such as free mar#et mechanisms in $hich the prices of goods and
services should increasingly re%ect the environmental costs of their input,
production, use, recycling, and disposal sub&ect to country-speci'c conditions.
(sec. !."
As ac1no#ledged y Agenda +6, industry contriutes significantly to#ards economic and
social development and can therey ma1e a huge impact on environmental protection through
innovation. ;y ma1ing it convenient for industrialists to proactively ta1e up the environmental
cause, the city planner can effectively overcome all three conflicts and #al1 the tight rope
to#ards uran sustainaility.
Conclusion
%he Copenhagen Summit +,,/, 1no#n popularly as 8Hopenhagen', raised e"pectations
for a comprehensive agreement among nations for comating climate change. Many #ere
dissatisfied #ith the outcome ecause of the failure to limit caron emissions. !nvironmentalists,
academicians, industrialists and the common man are concerned aout earth's sustainaility
given that #orld leaders #ere unale to arrive at a formidale consensus. %oday, the urden of
overcoming the greatest challenge 1no#n to man1ind rests on the shoulders of individuals,
5
institutions and their governments. Since industries are seen as the ma(or contriutors for caron
dio"ide emissions and ecosystem deterioration, there is a need for another industrial revolution to
ensure uran sustainaility. 2overnments' aility to promote environment friendly practices y
means of regulation cannot e effective #ithout the earnest participation of industrialists. Hence,
the need of the hour is 82reen Capitalism' for greener cities.
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