Can business be green and moral? This is the question which many business leaders, as well as those from other sectors have been pondering for some times. Can business achieve high profitability, but at the same time, make a positive impact on the society and the natural environment?
As part of the 2013 Bangkok Conference: Global Dialogue on Sustainable Development, TDRI held a special workshop to seek out the answers to this important question. The workshop is aimed to critically assess the current situation of the green business movement in Thailand, and to further explore opportunities and approaches for businesses, large or small, to move towards achieving a sustainable and green business model.
Dr. Kannika Thampanishvong, TDRI’s Research Fellow, first noted that the government has become more interested in the notion of sustainable development and green growth as can be seen in the National Economic and Social Development Plans. However, what Thailand needs is a ‘paradigm shift’ in order to create a new level of awareness across all groups of relevant actors – from state to private sector, civil society and consumers.
Green business development should start by focusing on sustainable production and consumption processes. In terms of moving towards a ‘greener’ production, Dr. Kannika argued that responsible resource use, increased usage of renewable energy, and exploring ways to protect the ecological systems of the environment in which the business operates in are vital starting points.
Essentially, this calls for a ‘green innovation’ which would enable the business model to be both green and inclusive. To do so, there must be a strong policy push from the state to create a platform and alliance for innovative cooperation. This means supporting collaboration and cooperation amongst green innovators and enterprises, as well as supporting innovation cluster so that new technologies can achieve profitability through economies of scale. Finally, state should play a more proactive role in providing information about financing sources for perspective green entrepreneurs.
In terms of consumption, Dr Kannika suggested that we need to change consumer behavior, which would require an investment in time and effort in our education system to understand the notion of ‘common property’ and how their consumption behavior can have an impact on the society as a whole. A green business would need to ‘understand their customers’ in terms of how green they are. Green customers can be ranged from lean green, shaded green, defensive green to extreme green which would require different level of green marketing tools.
The second speaker, Mr. Chonlathorn Dumrongsak, Siam Cement Group’s Center of Excellence and Sustainability Development, argued that large corporations have an active role to play in developing a business strategy that is environmentally friendly. For SCG, going green is not merely a CSR initiative, but it has increased the company’s bottom line, created new revenue and finally given SCG a license to operate in the community.
The green strategy has helped SCG to save 5.7 billion THB per year and reduced GHG 1 million tons through fossil fuel reduction. In addition, improving energy efficiency makes very attractive returns through more effective production processes and better use of equipments.
Apart from the green operation, SCG also focuses on R&D to develop environmentally friendly products which target real customer needs. In 2012, 1430 million baht was spent on R&D to develop high value added (HVA) products, and the revenue of these HVA sales contributed to 34 percents of total product sales at SCG.
In terms of SMEs, Mr. Vichean Jedsadakan, the managing director of Pig Family, an eco-friendly pig farm which focuses on green business model, confirmed that that having a in-depth understanding of the eco-system and the local community is a key success factor to a green business model. Particularly, gaining a license to operate in the local community means that the business will not go along with the wrong path which could produce consequential losses.
However, Mr. Vichean asserted that the main problem with green business in Thailand is the lack of access between consumers and producers. Producers do not have a full understanding of what the consumers want, and consumers lack a channel to communicate their needs to the producers.
Dr. Decharut Sukkumnoed, an economics lecturer at Kasetsart University, argued that a green business model should focus on ‘value’ rather than ‘price’. By focusing on the value aspect, it means that the business model can continue to make an impact in the society, rather than narrowing its focus on the comfortable space of improving profitability.
In the case of community enterprise, it was found that people do not lack innovative capacity but they need further support in terms of funding, setting up operating systems and cooperation amongst actors. So knowledge management, internal management structure and marketing tools are vital to the success of green community enterprise.
Finally, Dr. Saranarat Kanchanavanich, the Green Foundation’s Secretary General, strongly argued that the world has used up 30 percent of irreplaceable natural resources. Thus, we need an urgent restructure in how our production system works in order to achieve a more sustainable process.
Under the AEC, businesses should question themselves whether their deals, agreements and investment plans would have an environmental impact that would be irreversible and would cause significant damages to the environment and the future generations. Particularly with the closer economic integration, it would be impossible for one country to ignore the calls and trends of its neighbors. If we want to live together peacefully, and achieve successful economic objective, an effective cooperation is significantly needed.