Why the greenest businesses are learning to play nice together

For almost as long as the concept of business has existed it has been characterised as a highly competitive, even combative, sphere of human activity where a dog-eat-dog win-at-all-costs mentality is crucial to success. It is an enduring caricature that has come to define the public perception of corporate leaders as ferociously competitive, committed and often ruthless individuals who would sell one of their kidneys if it meant beating their competitors to a deal.

Yet according to growing numbers of experts the last five years has seen the remarkable, and largely underreported, emergence of a new breed of business execs who, while remaining as fiercely competitive as their predecessors are also increasingly willing to collaborate with rivals.

This trend is driven in part by globalisation and the emergence of the internet, which has made communication easier and more immediate than at any stage in human evolution. Companies have realised that with the whole world connected it is all but impossible to lock down information and as a result they have been forced to co-operate, often with competitors. "The competitive companies now are the ones that collaborate best," says Phil Smith, vice president for Technology Marketing at Cisco. "You need to allow people to collaborate and even give them incentives to do so."

And nowhere is this sense of corporate glasnost more apparent than in firms' sustainability strategies. Climate change in particular is the perfect topic for firms to pioneer this new co-operative approach as it is increasingly plain that no single firm or even industry can deliver worthwhile cuts in emissions on their own. "One of the rules of businesses is know your strengths and weaknesses and try to collaborate where you are weak," observes Paul Simpson, chief operating officer at the Carbon Disclosure Project (CDP), a lobby group which aims to encourage multinationals to report on the carbon emissions. "Well, when it comes to climate change all businesses are aware that they are weak – they know that from a macro economic perspective they are best off working together to avoid the climate change induced depression the Stern Review predicted."

It is this strength in numbers philosophy that has driven many companies into each others arms through groups such as the CDP and the Prince of Wales' Corporate Leaders Group on Climate Change. But what has surprised many (perhaps including the organisers of the groups themselves) is that those companies that have joined have treated them not as a glorified talking shop but as a means of generating genuine business benefits.

The primary benefit is the opportunity it provides firms to measure their performance against each other. "Sharing information and data through initiatives like the CDP is really helping firms benchmark their performance," says Smith. "Until you benchmark there is no way of knowing how well you are doing."

From benchmarking it is a small step for firms to start sharing best practices. "Most of the companies we deal with have CSR Officers and they all talk to each other [about best practices]," says Francois Barrault, chief executive at BT Global Services and a staunch advocate of a more collaborative approach to developing green business strategies. For example, BT recently updated its corporate travel booking service to include reminders to staff that they could use video conferencing facilities instead of travelling, a tactic Barrault is happy to admit it borrowed from its partner Cisco. Similar partnerships are apparent right across the growing green networks where more and more firms are willing to let their peers know how emissions cuts and energy savings were accomplished.

To old school business leaders this willingness to openly divulge how your green business strategies work is strange to say the least. "Why would you let a rival know how you managed to cut your energy costs and boost your bottom line? " they ask. But for Craig Bennett of the Corporate Leaders Group on Climate Change the answer is obvious and goes far beyond any treehugging desire to save the planet. "No company on its own can develop best practices," he explains. " But if you develop best practices together as an industry when environmental regulations do come in they are more likely to mirror those best practices than make onerous demands on the company's involved."

It is a truism evident in many IT and electronics firms desire to cooperate, through groups such as the Green Grid and Consumer Electronics Association, to improve the energy efficiency of IT kit. Meanwhile, some within the car industry may now privately admit that if they had only worked together to accelerate the emergence of greener cars they might not now be the subject of a major legislative crackdown on both sides of the Atlantic.

If sharing best practices is in part a defensive tactic there is a similar sense of risk mitigation underpinning many firms willingness to collaborate to develop new green products and drive new commercial opportunities. "There is a recognition that we need to create massive new markets and even the biggest companies out there find it more risky to go it alone," explains Bennett. "They realise that if they move in unison there is less chance that they will invest in a technology or process that quickly goes out of date."

One firm taking this collaborative approach to green product development to an extreme is IT giant IBM, which this month launched a new initiative to encourage firms to release patents for green products and technologies into the public domain. IBM, Nokia, Pitney Bowes, and Sony have all agreed to make patents available through the Eco-Patent Common scheme and have called on other firms to join them in making some of their the green intellectual property (IP) freely available.

IBM has for example released patents covering reusable packaging for electronics products and a gas-based process for cleaning microelectronic surfaces that is more environmentally friendly than current chemical based processes.

Wayne Balta, vice president of environmental affairs at IBM, admits that giving competitors access to patents appears like a "counter intuitive" move, but he is confident that there are commercial gains to be achieved through the scheme that go beyond the brand benefits associated with a bit of philanthropy. "We feel this initiative will provide a catalyst for further collaboration with people that IBM otherwise would not have run into," he said. "We can tap into some great minds by sharing this information. It is a model that has worked in the software sector with the open source movement and we feel it can work again here."

Of course there are limits to how far firms are willing to go with their collaborative efforts and Balta admits the IP offered through the scheme is likely to come from patents that "may not deliver top line or bottom line benefits" to the company's involved. Additionally observers claim much of the meaningful collaboration evident in the green business movement thus far has tended to be between companies in different sectors, as opposed to day-to-day competitors. Car firms, for example, are happier working with battery or fuel manufacturers to develop green innovations than they are working with each other. It will also be interesting to see whether the current thawing of inter-company relations will continue at its current pace as green credentials become an increasingly important.

But even if some firms do retreat to their previous ultra-competitive positions experts remain confident that the vast majority now appreciate that the only way to tackle climate change and exploit the opportunities the low carbon economy offers is to fully embrace the new era of corporate collaboration. "Traditionally the role of business has been to make as much money for shareholders as possible," observes Simpson. "I don't see that going away, but the role is diversifying and there is an understanding that they also have to create public good. It is businesses that combine the two roles that will in the long term make the most money for their shareholders."