Zipcar: Environmental Sustainability Practices

If only environmental sustainability gave proven return on investment (ROI), it would be easy being green. Corporate executives would be echoing the same thing. The problem is, executives haven’t always connected the dots between the green of profit and the green of environmentalism.1 It is only in recent times, that we humans have been able to look beyond the obvious to understand the implications of not only not complying with sustainable development practices but rather more importantly knowing about the potential benefits of undertaking them. These practices, once viewed as a cost centre are now being identified as profit centres and measures to build both tangible and intangible values not only for a firm or a company but potentially an

This continued till the companies realised that ‘Quality’ was actually profitable to them as consumers demanded it and were ready to pay a premium for it. Zipcar is a prime example of a company successfully understanding the need, where the necessity of sustainability meets opportunity. 50% of the world’s population lives in cities, and they expect that number to climb to 70% by 2050. Also urban lifestyles are changing and the aspirations of car ownership is falling down, especially among the younger generations. Although every shared car can replace 15 to 20 owned cars and up to three parking spaces, Zipcar isn’t a car rental company with environmental objectives — sustainability is at the root of the value it provides.

Understanding that sustainability practices do not only mean higher profits for a company but also a higher growth and healthier economy for a nation as a whole is crucial.

The Green Economy refers to two interlinked developmental outcomes for any country:

 Growing economic activity (which leads to investment and jobs) in the green industry

Originally believed that sustainability or environmental protection was the responsibility of developed countries is no longer true. The developing countries have equal stake and probably more than the developed countries as it becomes extremely critical for them to use their resources carefully. Now that we have established through various industry cases of how sustainability can be profitable, let us look at steps an organization can take to internally promote sustainability

1. Incentivize Sustainability: If the organization wants its managers to think about the triple bottom line, incentivizing them helps achieve sustainability targets.

2. Empower Chief Sustainability Officer: Adding another major decision maker along with other CXO’s with the aim of aligning profitability with environmental sustainability

3. Manage Integrated Capital Allocation: Smart CSOs equipped with serious diagnostic tools can discover opportunities to increase efficiency and reduce exposure to shocks, such as those related to energy price volatility and water