Copyright 2007 Air & Waste Management Association26 em march 2007 awma.org

eminside the industry by Anthony Buonicore and Dianne Crocker

Anthony J. Buonicore, P.E., DEE, QEP, is chairman of Environmental Data

Resources Inc. (EDR) in Southport, CT. E-mail: ajb@edrnet.com.

Dianne P. Crocker is managing director of EDR’s Market Research Group. E-mail: dcrocker@edrnet.com.

One of the most talked-about business phrases of late—“the world is flat”—was coined by Thomas L. Friedman in the title of his best-selling book, The World Is Flat: A Brief History of the 21st Century (Farrar, Straus, and Giroux, April 2006). The dawn of the 21st century, according to Friedman, was characterized by a world-shaping convergence of factors: the Internet, global fiber-optic networks, and an explosion of software. Thanks to tele-communications breakthroughs that destroyed impediments to international competition, organizations are now globally networked to one another. This has created a means for intellectual capital to be dispensed by anyone from anywhere in the world at any time. The effect is a level playing field, or a “flat” business world, which grants companies unprec-edented new power to compete on a global scale. As a result, companies must innovate and identify ways to create business value, or risk being left behind. So, how are environmental firms adapting to this new playing field?

NEW MARKETSIt is not uncommon today for environmental firms to pur-sue new projects in areas that were not even on their radar screens in the not-so-distant past. Talking to consultants at industry conferences may lead you into a conversation about new opportunities in countries like Italy, Brazil, Ger-many, Croatia, and Venezuela. And geographical market differences matter. Opportunities, such as infrastructure development, are often directly related to hot spots for real estate investment. According to the results of the 15th annual survey conducted by the Association of Foreign Investors in Real Estate (www.afire.org), global real estate investors see the strongest opportunities in Japan, China, India, and Eastern Europe. Opportunities for the design and construction of basic infrastructure are opening doors

in countries like China, which has one of the largest popu-lations and fastest growing economies in the world.

ENviRoNMENTAl STRATEgiESAlso driving opportunities globally is the growing emphasis that international corporations are placing on environ-mental strategies. Companies that never thought about environmental challenges before, and have not tradition-ally included them as a component of their business strate-gies, are doing so today. Fortune magazine recently referred to “corporate America’s newfound obsession with green initiatives,” citing leading Wall Street investment banks, in particular, that have only recently adopted environmental initiatives in their overall business strategies (“Wall Street’s Green Machines,” Matthew Boyle, Fortune, October 25, 2006.). Such initiatives are creating business opportunities for environmental firms worldwide. Citigroup, for instance, vowed to reduce its own emissions of greenhouse gases by 10% from 2005 levels by 2010—not a trivial proposition given that the corporation currently owns or rents 13,000 properties. Bank of America took its promise a step further, pledging to cut back on the greenhouse gas emissions from its investments and loans to energy and utility companies by 7%. After being so vocal with their initiatives, you can bet that these large investment houses are likely to feel pres-sure from shareholders in the months ahead to support their promises to operate in a green fashion with their daily operations as well as their investment decisions.

What has been bandied about at industry conferences for years may now be taking root in corporate America. According to Daniel Esty, professor of environmental law and policy at Yale University and co-author of the book Green to Gold: How Companies Use Environmental Strategy to Innovate, Create Value and Build Competitive Advantage (Daniel C. Esty and Andrew S. Winston, Yale Univer-sity Press, October 2006), “In the very near future, no company will be positioned for industry leadership and sustained profitability without factoring environ-mental issues into its strategy.” Richard Branson, chief executive officer of Virgin, for example, made headlines recently when he pledged to reinvest US$3 billion of the company’s profits into combating climate change. As more and more international corporations follow suit, environmental firms are finding opportunities to provide services related to greenhouse gas emission reduction, due diligence, and risk assessment of investment and lending options in the global market.

Innovation and Differentiation in a ‘Flat’ Global Market

Copyright 2007 Air & Waste Management Associationawma.org march 2007 em 27

divERSificATioNNew opportunities are constantly emerging in an industry driven less by regulation and more by business and eco-nomic cycles. In response, environmental firms are increas-ingly diversifying their services to be more aggressive in some markets, and less aggressive in others. Target markets for new initiatives by environmental firms today include mixed-use development, brownfields assessment, and remediation projects, particularly in areas with strong real estate markets. Others are targeting business opportuni-ties in the areas of corporate social responsibility, aviation, ports and waterways, green buildings, alternative energy, and homeland security. There are also environmental firms with new offices set up to serve the ongoing recon-struction of the Gulf Coast region following Hurricane Katrina, military base closure/realignment investment, and infrastructure development in the Middle East.

With the market becoming even more competitive, environmental firms are being challenged to develop expertise in new niches in order to drive profits. Some of the most popular ways that firms are doing this today include

• pursuing unique environmental technologies to address environmental problems, such as greenhouse gas emissions, vapor intrusion, and contaminated soil;

• adding senior technical experts with experience in a particular new service area;

• expanding into high-opportunity geographic markets through acquisitions;

• opening new offices in regions with strong growth prospects;

• broadening services and expanding into new market sectors;

• assuming clients’ liability for environmental risk;

• cost-effectively reducing waste materials gener-ated from industrial operations; and

• assimilating environmental data quickly—re-search that used to take days—allowing clients to manage their businesses more efficiently.

As the international stage “flattens” and our industry’s globalization continues, think about what it means for your firm and whether it makes sense from a business perspective to expand geographically. Are there mergers or acquisitions that will allow your firm to expand into new markets or add technical expertise? Clearly, there is an increasing amount of funding flowing into develop-ment projects and more investors looking to place money overseas, creating global opportunities for environmental firms. In the evolving world characterized in Friedman’s book, in which points of competitive edge are flattening, separating your firm from the herd becomes even more important. Years down the road, we predict you’ll see the execution of a broader focus and geographic diversifica-tion in our increasingly globalized industry. em

This conference will investigate the technologicaldevelopments, case studies, and solutions toEnvironmental Nuisances. It will be structuredas follows:

• Half-day plenary session on the policy aspects of environmental nuisances

• Two half-day concurrent sessions on noise, light, odour, and fugitive dust

• Half-day plenary session dealing with stakeholder participation and management issues

This conference will be of interest to Federaland Provincial government employees, espe-cially those from the departments of Environment,Transportation, and Infrastructure; academia;business; agricultural business; and consultants.

May 7-9, 2007 • Vancouver, British Columbia, Canada

For more information, visit www.awma.org.

Environmental Nuisances: Noise,Light, Odour, & Fugitive Dust