Are green projects profitable?

Profitable in what sense? Even if we stick to the simple definition of economic profits the report published by GrantThornton on September 3, 2012 tells that 62% of cleantech businesses expect profits to rise compared with just 38% globally.

Being more resource and energy efficient produces itself cost savings and higher profits. There are also many other factors increasing the profits of green projects. As a general trend, clean-energy costs are falling as the costs of fossil fuel energy are going up. Cleantech industry is also receiving large amounts of capital and expanding economies in China, India and other rapidly developing countries demand new cleantech innovations. Governments are aggressively subsidizing the cleantech sector and consumers are demanding cleaner energy, products and services. There is as well a strong consensus on the urgent requirement for businesses and individuals to reduce harmful effects on the environment and to take social responsibility into account in their actions.

However, the whole concept of profitability must have a wider definition so that it considers environmental and social costs and benefits, even if they are seldom directly measurable and comparable with economic profits. Better risk management in environmental and social issues also lead directly to higher profits through reduced litigation and recovery costs, at least in the long term. The planning horizon must be long enough to consider also the lives of future generations and the use of precautionary principle (Principle 15 of the 1992 Rio Declaration), included in United Nations Global Compact principles, should be actively promoted. It states that “where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation”.