Why This CEO Thinks Prioritizing Sustainability Can Help Us Get Through The Recession
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Why This CEO Thinks Prioritizing Sustainability Can Help Us Get Through The Recession

Why This CEO Thinks Prioritizing Sustainability Can Help Us Get Through The Recession

As our economy continues to feel the pressure from COVID-19, companies are starting to have a tough time balancing their environmental and economic goals. For most, sustainability initiatives have been an afterthought. After all, if sustainability is so expensive to pull off, shouldn’t companies just focus more on staying afloat?

It’s a valid question, of course. But the two approaches don’t necessarily have to be mutually exclusive. And for most companies on a micro-level, staying afloat during these unusual times isn’t contingent on damaging the planet.

From a macro-level, some might even argue prioritizing sustainability will actually help us get through the recession. One of those people is Brad Dockser, CEO of Green Generation (or GreenGen), which invests in cleantech companies and offers services like energy efficiency, power generation, project financing, and advisory support to clients including the federal government, helping them to lower their carbon footprint.

Though the clean energy sector has shed over 106,000 jobs in the last two months alone, GreenGen has surprisingly not needed to furlough any of its employees nor substantially delay work since the COVID-19 pandemic hit. This relative success could be attributed to the company’s double bottom-line approach to business — the idea that sustainability and profits can and should go hand-in-hand.

This week, I had the chance to chat about this approach with Dockser. But I also wanted to learn how this principle works in practice for GreenGen. So during our conversation, Dockser shares his company’s framework — Operate in the Green — with me.

Our conversation has been edited for length and clarity.

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Ari Kelo: Sometimes, ESG strategies don’t provide an obvious fiscal benefit. So why should companies still be thinking about implementing them, even during a time of crisis when times are tough?

Brad Dockser: Employing ESG strategies allows people to shine a light on areas of their business that have been historically overlooked. ESG forces you to think in a way that prioritizes the well-being of a broad range of stakeholders, including consumers and the people who buy your product.

In turn, those same customers will be influenced by what you do. For example, if you create a toxic work environment and employees speak out, consumers may be more reticent to buy your product. Consumers won’t want to associate with products that don’t align with their values. ESG has hard and soft returns — it lowers costs while creating goodwill with other buyers and stakeholders.

So in some ways, has the COVID-19 pandemic actually made it clearer that operating sustainably and paying attention to ESG strategies can be the right way to go?

As companies are seeing their revenue streams dry up, making hard decisions about letting people go, and evaluating all of their operating costs, they will turn to real estate costs as a way to save money. This pandemic has highlighted that actual utility costs may not correlate with economic activity, even though they should.

When you realize that lowering your energy costs can help you save money during a time when cash flow is more important than ever, energy efficiency and ESG strategies present themselves as an obvious short- and long-term solution. People are applying a broader lens to identify the things that help business. 

What does implementing sustainable practices look like for GreenGen as a firm? Is a strategy around sustainability one that’s looked at day-to-day or is it more of a macro-level goal?

ESG is a way of life at GreenGen and not just an investment strategy. We think broadly about who benefits and who’s impacted in everything that we do. This means that beyond our direct clients, we take into account the residents of the senior living places we’re working with, the community that relies on the services of the nonprofit we’re helping with building retrofits, our subcontractors and all the people that interact with the site we are visiting. We continually ask ourselves to think broadly about who the stakeholders are and their needs, which then helps us drive value for our clients.

What’s the idea around Operate in the Green? How do you think about the “double bottom line” around operating sustainably as a company?

GreenGen’s ‘Operate in the Green’ approach means we improve our clients’ double bottom line by driving both positive financial outcomes (money green) and environmental benefits (sustainability green). They are synergistic — it is not a zero-sum game. The people who think about sustainability as a critical part of their business plan become rewarded. Your cash flow and access to capital markets increase when your business strategy’s adds a focus on sustainability.

Additionally, the ability to create goodwill may cause consumers to buy more products and services. Goodwill is also important for internal stakeholders, as people are naturally drawn to mission-driven organizations. Our business model is one that is both mission-driven and for-profit. That is the mission — helping our clients understand that doing good is not at the expense of profit. 

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There have been some promising sustainability numbers that have come out since the pandemic hit (for instance, emissions have gone down). What are the critical questions we should be asking ourselves to prevent us from going right back to our old ways after the pandemic?

This recession gives us the chance to rebuild the economy in a more sustainable way. People have become accustomed to the cleaner air and lower levels of pollution now present in their communities. The question is: How do we recreate an economy that is also sensitive to environmental improvements we’ve begun benefiting from?

As a result of increased air quality, there have been significant reductions in pollution-related illness. It will be a balancing act. How do governments prioritize the newfound health benefits of the improved environment while restarting the economy quickly and effectively? The key will be to rebuild the economy that we want to have — not the one we previously had. It remains to be seen, but I am confident that the environment will not be forgotten about. 

Right now, a lot of leaders are in panic mode, trying their best to serve their constituents’ direct needs during this crisis. Are they acting in a way that reflects that sustainability should be part of overcoming our economic recession?

The majority of global political leaders recognize the importance of sustainability and continue to make it a priority, not in spite of, but because of the pandemic. The EU has strengthened its commitment to the Green New Deal. Leaders are prioritizing sustainability as a means of coming out of the recession, focusing on things like electrification of the grid, decreased reliance on coal, innovation in factories, and improvement in resiliency, as well as the jobs that come with this.

Our nation’s state and local governments are not walking back their commitments to a greener economy. For instance, New York and Washington have not moved previously legislated deadlines and targets for energy performance standards. They are not neglecting the long-term for the sake of the short-term.

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