When people think about working within the environmental sector, they think about strange people stranding themselves up trees to stop a road being constructed or men with dreadlocks halfway down their backs living in a forest. This is not surprising when you think about environmentalism in popular culture; up until only a few years ago it was seen as something that only hippies took an interest in.
There is also the widely held view that it is bad for business. One of the ways this is subconsciously put across is in the form of raging against regulations. For instance, Scott Pruitt, the EPA administrator under Donald Trump recently claimed that 'The war on coal is over' claiming that through regulations being put in place to save the planet were actually there to simply harm a polluting industry. Similarly Mitch McConnell, Senate Majority Leaders said of the removal of the environmental regulation that 'A lot of damage has been done, this doesn’t immediately bring everything back, but we think it stops further decline of coal-fired plants in the United States and that means there will still be some market here.' The message here is clear - being environmentally friendly is only there to destroy business growth.
So is this actually true?
There is little doubt that there is some truth in what McConnell and Pruitt preach. One of the most important elements of any environmental agenda will be to remove elements that pollute the environment, most of which occur as byproducts of industry. The coal industry is incredibly damaging to the environment, not only when it's burned, but also when it's mined. Coal when it's burned gives off sulfur dioxide, nitrogen oxide, and carbon dioxide, all of which are damaging for the environment. Mining coal also causes significant environmental damage, not only from the destruction of millions of years of fertile soil, but also in the runoff from the mining process itself with hundreds of recorded cases of water contamination from nearby mines. However, through limiting these environmentally damaging actions, these regulations are limiting what these companies can do and how they can do it, so they are naturally going to lose money as a result. For instance, since President Obama took office in 2009 the number of jobs in coal mining went from 86,400 to 50,000, a decline of 42% in 8 years.
However, whilst it could be argued that regulations may have played a part in this, the correlation to the industry shrinking and regulations being imposed is perhaps masking growth in other areas. For instance, whilst 8 years ago when these regulations came into force there were 86,400 people working as coal miners, there has been a significant reduction occurring for the past 70 years and other energy industries have dramatically increased and created more jobs. For instance, in 1955 there were 258,616 coal miners in the US, which is fewer than the current number of people working in the solar energy industry alone (374,000) with the annual growth in the industry actually more than the entire coal industry (73,615 jobs added to solar versus 55,000 jobs in total for coal mining).
It is not only in the growth of industries that it makes sense, either. DuPont were an early adopter of the environmentally friendly approach, pledging to reduce their greenhouse gas emissions by 65% between 2000 and 2010. By 2007, they were already saving $2.2 billion, equal to their profit that year. In a study conducted by Harvard Business School, two sets of companies with similar financial performance in the early 1990's were chosen, one group was designated as high-sustainability and the other low-sustainability. In the long-term study it was found that on average the high-sustainability companies financially outperformed their low-sustainability counterparts by 4.8% over 18 years. So rather than environmental concerns being a drain on resources and holding companies back, those who embrace it are actually more likely to perform better.
Despite what many say, the reality is that taking an environmentally friendly approach makes a huge difference in the long run, not only in terms of saving money, but also through being outwardly environmentally friendly. Consumers today are more savvy than ever before and are mew aware of the impacts of their buying habits, as such many purchasing decisions have as much to do with protecting the environment as price. Companies that promise ethical products actually see increases in sales over their non-ethical competition. A study by Jens Hainmueller, Michael J.Hiscox, and Sandra Sequeira found that customers were 10% more likely to buy the same packet of coffee if it had a fair-trade label on it.
Similarly consumer products designed to decrease environmental damage have been growing well above the rate of their overall industry. For instance, in the US overall car sales increased by 5.7% in 2016, which is the highest the market has ever been. However, this growth is dwarfed by the 47% increase in the number of electric cars sold in the same year. Companies who have marketed themselves as being environmentally friendly are now very much in vogue, such as Tesla, Patagonia, and Whole Foods, who have all seen positive sales increases over the past few years.
So rather than environmentalism being this hippy, fringe element of business that makes little money, the reality is that those who adopt it are outpacing those who don't.