Big companies go green; SMEs stuck on amber

Surrounded by rocky outcrops, lakes and forests, Kandalama is home to a variety of indigenous species of birds and wildlife. It occupies a unique place in the cultural heartland, flanked by two world heritage sites - the 1st century BC Dambulla temple and the 5th century AD Sigiriya fortress. Kandalama Hotel is the first hotel in the world to be awarded the prestigious ‘LEEDS Green Building Certification’.

Prema Cooray has been Secretary General/ CEO of The Ceylon Chamber of Commerce for some time now. However - especially with the development of Kandalama Hotel - his reputation as the pioneer in developing eco-friendly tourism in Sri Lanka precedes him. Therefore, when he addressed The World Conservation Union (IUCN) last week, one was compelled to sit up and take notice.

“Many large companies today are committed to striking a balance between the planet, the people and the profits,” Cooray revealed. He dispelled the perception that the private sector is interested solely in the financial bottom line. “Companies are convinced that investment in environmental conservation provides for the survival of mankind in the long term, while yielding economic benefits to the organisation,” he said.

There is, however, some ambiguity about whether the SME (small and medium enterprises) sector has taken this concept seriously. Cooray appeared to condone their lukewarm approach when he said, “Their problems are so many – financial, technical, marketing… It’s a tough world that they are living in.”

To rectify this situation, the IUCN is involved in a programme where they enable the SME sector to have a greater sense of commitment towards the environment. One of the IUCN’s focus areas is to ensure that the Sri Lanka’s business community incorporates environmental concerns into its operating and decision-making practices.

One obstacle is that the benefits of investing in the environment are not easily measurable, Cooray pointed out. IBM has done a comprehensive exercise in this area; their CSR Annual Report 2005 evaluates their investment in the environment against the benefits that accrue. The company says that, over a period of time, the ratio of savings to expenditure will be 2.5 to 1.

Sri Lankan companies, on the other hand, have not done such a detailed analysis in terms of cost versus benefit. There have been isolated attempts at evaluating certain investments – such as: What would we save in electricity charges by investing in alternate energy like biomass?

They appear to be bent on competing with each other by revealing more and more of activities in corporate social responsibility (CSR), suggests Cooray. Most annual reports of companies devote a substantial number of pages to CSR, of which the segment on environment takes pride of place.

Cooray observed that many companies in the hotel sector have gone green. In his own experience, the Kandalama Hotel was able to command a price premium over the competition. This is visible in the marketplace and also in the profits the hotel has generated over the years.