Why should businesses develop environmentally adapted products? We believe that there are a number of drivers:
Increased environmental awareness
Consumers increasingly demand products that are less harmful to the environment. This stimulates individual companies and entire industries to adapt their offerings accordingly. The solutions of the future will likely be a combination of “environmentally smarter” products and changes in consumption patterns.
Increasingly stringent legislation is an important factor in driving demand for new technology and solutions, but it is important that laws attack environmental problems at the right level. Technology-neutral directives that focus on pollution levels—rather than dictating the manner in which reductions are to be achieved—are more effective at harnessing market forces.
It is also desirable to pursue unification of environmental laws across different parts of the world. For example, new European Union member states must comply with the EU’s environmental directives. International agreements regulate some environmental threats, but these should, in many cases, be more explicit and legally binding.
Environmental taxes and levies, such as taxes on carbon dioxide emissions, trading in emission rights and charges on NOx releases from power plants can be used to persuade consumers and producers to choose more environmentally sound options.
State subsidies, such as “environmental discounts” on low-emission vehicles, can also have a major impact on markets.
Trans-national environmental agreements affect businesses and society in general. One example is the Montreal Protocol, which bans the use of certain ozone-degrading substances. Once adopted, these measures gained acceptance around the world, and quickly led to the development of new propellants for refrigerators and freezers and cooling plants.
Commercial threats and opportunities
Customer and consumer demands force companies engage in environmental issues and offer greener products. Many companies sign voluntary agreements to reduce energy consumption or otherwise improve environmental performance. This may include introducing environmental management systems or publishing sustainability reports. Many see a business opportunity in adapting their products to environmental requirements.
Environmental requirements imposed as part of public and private procurements impact producers. Companies adapt their products and services to fit the procurement criteria, since the alternative – ignoring the requirements – is regarded as a commercial threat. To facilitate communication between buyers and sellers, some sectors have developed voluntary systems which clearly indicate the environmental impact and characteristics of the products. These include various types of environmental product declarations and third-party environmental labels, as well as systems for certification and assessment of forestry products (FCF, PEFC).