Using a Financial Strategy to Stimulate a Company’s Environmental Strategy

It is a widely held view that companies exist to make money, and that attempts to encourage, legislate or tax them into better environmental performance will be met with little enthusiasm if such actions “cost money”.
In this paper we describe a postgraduate module which we have offered for over 20 years with strong links to local industry.
Students attending the module range from industrially based students with considerable environmental experience to new graduates from a variety of disciplines. The module assignment is key to this paper. It provides a challenge to all students and reveals a possible mechanism to promote companies to engage in a carefully orchestrated and economically viable environmental strategy.
Each student is allocated an individual company with basic company details. All of the companies are based on real SME s (small to medium enterprises). After conducting an environmental audit the student has to develop an environmental improvement strategy for the subsequent three years. In acknowledging the lack of commitment to the environment shown by most UK companies the assignment brief does not permit any new funding for environmental improvements: rather the student must make savings in the first year by judicious application of “no cost” or “low cost” measures. Any savings can be deposited into an environmental fund, which can be used to support more extensive and expensive improvements in the later years. This paper will present a typical student financial flow sheet which clearly illustrates that this approach can yield substantial economic returns while at the same time contributing to improved environmental performance. In the case presented we will indicate examples of savings and expenditure in heating, motors and lighting.