Natural Environment

The natural environment involves the natural resources that are needed as inputs by marketers or that are affected by marketing activities. Environmental concerns have grown steadily during the past three decades. In many cities around the world, air and water pollution have reached dangerous levels. World concern continues to mount about the possibilities of global warming, and many environmentalists fear that we soon will be buried in our own trash.

Marketers should be aware of several trends in the natural environment. The first involves growing shortages of raw materials. Air and water may seem to be infinite resources, but some groups see long-run dangers. Air pollution chokes many of the world's large cities, and water shortages are already a big problem in some parts of the United States and the world. By 2030, more than one in three of the world's human beings will not have enough water to drink.38 Renewable resources, such as forests and food, also have to be used wisely. Nonrenewable resources, such as oil, coal, and various minerals, pose a serious problem. Firms making products that require these scarce resources face large cost increases, even if the materials remain available.

A second environmental trend is increased pollution. Industry will almost always damage the quality of the natural environment. Consider the disposal of chemical and nuclear wastes; the dangerous mercury levels in the ocean; the quantity of chemical pollutants in the soil and food supply; and the littering of the environment with nonbiodegradable bottles, plastics, and other packaging materials.

A third trend is increased government intervention in natural resource management. The governments of different countries vary in their concern and efforts to promote a clean environment. Some, such as the German government, vigorously pursue environmental quality. Others, especially many poorer nations, do little about pollution, largely because they lack the needed funds or political will. Even the richer nations lack the vast funds and political accord needed to mount a worldwide environmental effort. The general hope is that companies around the world will accept more social responsibility, and that less expensive devices can be found to control and reduce pollution.

In the United States, the Environmental Protection Agency (EPA) was created in 1970 to set and enforce pollution standards and to conduct pollution research. In the future, companies doing business in the United States can expect continued strong controls from government and pressure groups. Instead of opposing regulation, marketers should help develop solutions to the material and energy problems facing the world.

Concern for the natural environment has spawned the so-called green movement. Today, enlightened companies go beyond what government regulations dictate. They are developing strategies and practices that support environmental sustainability—an effort to create a world economy that the planet can support indefinitely. They are responding to consumer demands with more environmentally responsible products.

For example, A General Electric, the giant conglomerate that manufactures everything from jet engines to light bulbs, is using its "ecomagination" to create products for a better world—cleaner aircraft engines, cleaner locomotives, cleaner fuel technologies.

Taken together, for instance, all the GE Energy wind turbines in the world could produce enough power for 2.4 million U.S. homes. And in 2005, GE launched its Evolution series locomotives, diesel engines that cut fuel consumption by 5 percent and emissions by 40 percent compared to locomotives built just a year earlier. Up next is a triumph of sheer coolness: a GE hybrid diesel-electric locomotive that, just like a Prius, captures energy from braking and will improve petrol efficiency another 10 percent.39

Other companies are developing recyclable or biodegradable packaging, recycled materials and components, better pollution controls, and more energy-efficient operations. For example, HP is pushing legislation to force recycling of old TVs, computers, and other electronic gear:40

HP wants your old PCs back. For decades the computer maker has invested in recycling systems, giving it a head start against competitors. Last year, HP recovered 13 million kilograms of electronics globally—equivalent to more than 800 jumbo jets. HP also reused 30 million kilograms of hardware to be refurbished for resale or donation. And it's goal is to reduce PC energy usage 25 percent by 2010. No other electronics maker has a recycling, reuse, and resale program on this scale. HP's efforts have made it the darling of environmentalists, but its agenda isn't entirely altruistic. "We see legislation coming," says HP's vice president for corporate, social, and environmental responsibility. "A lot of companies haven't stepped up to the plate. ... If we do this right, it becomes an advantage to us."

Thus, companies today are looking to do more than just good deeds. More and more, they are recognizing the link between a healthy ecology and a healthy economy. They are learning that environmentally responsible actions can also be good business.

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