Political issues tend to come and go. But the environment has lodged at the top of the international agenda over recent years. At the same time, the interests of business and environmentalism are coinciding more. The Stern Report, along with a raft of recent EU directives and strategies designed to reduce pollution and resource use, are setting the business agenda.

Greening a business, once seen as a bottomless and costly pit of good intentions, is now viewed as a part of good leadership. Using natural resources carefully and cutting those expensive energy bills is seen in the same light as effective management of people or capital.

Environmental regulation, provided it has an international reach, can also stimulate new ventures. The introduction of market mechanisms aimed at influencing environmental outcomes has created new opportunities, not just for the UK financial institutions designing carbon trading instruments.

There are also firms developing low-carbon technologies, creating schemes to recover energy or developing fuel cells and renewable energy products.
But the consumer's mood can be volatile. Reputation can suffer if companies are caught on the wrong side of an argument. Issues such as excessive packaging and pollution from factories have joined land contamination and oil spills as the unacceptable face of business.

One of the greatest challenges governments face is changing behaviour without upsetting voters. Politicians tend to prefer stealth. If business can shoulder the burden of initiatives and pass on the costs, it is preferable to confronting voters directly.

All of this creates opportunities for alert companies. But it requires an awareness of where costs are increasing and where new regulations have created opportunities. Energy is an example. The Climate Change Levy has applied to business energy use since 2001. Enhanced capital allowances are available to businesses that purchase energy-saving products from the Carbon Trust's list. But what businesses need from policy-makers is long-term certainty and an assurance that new regulations will not disadvantage UK companies in global markets.

Nick Paget-Brown is the editor of UK Environment News