Davos watchers: the environment will lose out the economy in 2009

In surfing the Web to research green & sustainability trends,
in particular the impact the recession will have on green
investments, I came across an online debate on You Tube connected
with the World Economic Forum in Davos, Switzerland. The
site’s “Davos
Debates” environmental question was, “will the
environment lose out the economy in 2009?”

The results of this online poll weren’t even close. When I
checked on Friday, January 30, the tally was 71 percent of
respondents saying Yes, the environment will lose out to the
economy in 2009, and only 29 percent voting “no.”

Sure, this an unscientific poll of You Tubers—not a survey of
the leading economists and notables actually speaking in Davos–but
it points to the real concern people have that in hard economic
times funding for sustainability will dry up. But these concerns
are over-rated—certainly at an enterprise level—and
here’s why:

• The question zeroed in on 2009. We
  are in recession right now, but green priorities beg a longer view.
  Sure, jobs and the economy are top of mind right now, but business
  priorities must cut through to a longer view of what major
  customers, regulators, and consumers will demand.
• Manufacturing enterprises see cost
  savings as a leading driver for green and sustainability
  initiatives. This isn’t just my opinion—Manufacturing
  Insights, an analyst firm that’s part of IDC, did an
  in-depth survey on green and sustainability in September 2008.
  Of the 372 respondents, 221 of whom were in manufacturing,
  regulatory compliance was cited at the top driver for green and
  sustainability programs, but cost reduction came in second. While
  
  the report doesn’t make this conclusion, it stands to
  reason that companies will look to green initiatives as a way to
  trim costs as they deal with this recession.
• One type of green investment
  that’s likely to do well in this struggling economy is green
  IT solutions such as server virtualization. In a Dec. 15, 2008
  report, Forrester Research concluded that the slowing economy
  won’t slow down green IT initiatives. Indeed, the
  report’s survey found that among those companies adjusting
  the pace of green IT activities in response to the economy, those
  going faster outnumber those slowing down by two to one.

 
All this is not to say that many manufacturing enterprises will be
forced to adjust funding for green & sustainability projects.
It’s my guess that many of the more ambitious
projects—such as entirely new factories or distribution
centers built using the latest green technologies—will be put
on hold. Funding for enterprisewide software systems or large
industrial automation systems may also get delayed. But surely
companies will look toward smaller retrofits, upgrades or even
point solutions to cut energy costs. Then there are those companies
that will look at this recession and the talk of greater government
funding for green technology as an opportunity to focus their new
product development on the next generation of green products.

The trick will be to identify smaller green investments over the
short to mid-term, while continuing to identify and pursue the big
investments for the next generation of greener production systems
and products. Please share any insights on relatively low-cost
green investments that companies could be making, and I’ll do
the same in coming posts.