I’m one of
those who’s been working on environmental issues forever--from
political activism in the late ‘60s, to co-founding a small
“eco-village” in the 70’s (Sirius Community in MA) with practical
demonstrations of solar and wind energy and organic agriculture, to
policy work for President Clinton’s Council on Sustainable Development
in the ‘90s. More than 12 years ago, the Council was working with CEOs
of major companies and directors of key environmental groups to create
innovative approaches to stopping global warming and creating
sustainable communities.
So I’m
especially happy to see the environmental movement get a real boost
from the popularity of Al Gore’s dramatic film, An Inconvenient
Truth. The film has greatly raised the visibility of the global
warming issue, as more and more people jump on the bandwagon and
“green” practices become the latest cool style featured on the covers
of Newsweek and Time magazines.
Sustainable
business practices that help protect the environment and reduce global
warming are growing rapidly, as companies find it helps the bottom
line. A 1995 Vanderbilt University analysis found that in 8 out of 10
cases, low-polluting companies financially outperformed their dirtier
competitors. In recent years, over 300 multi-national corporations
joined the UN Global Compact, pledging to support environmental
protection, human rights, and higher labor standards.
Many large
multi-national corporations are now making major changes, following
the lead of small innovative companies which have laid the foundations
for years. More than 560 pioneering San Francisco Bay Area firms are
certified as “green businesses” by the Alameda, California county
government and the Sustainable Business Alliance. Here are a few
examples of large and small companies:
Ray
Anderson, founder of Interface Carpets, the world’s largest
commercial carpeting manufacturer, trained 8,000 employees in
environmental sustainability, with the dramatic goal of reducing
pollution to zero percent in the next few years. Instead of buying a
carpet, you now rent a carpet, and when it wears out, you bring it
back to be recycled, and are given a new recycled one. Anderson
estimates that his accompany has already saved $185 million on waste
reduction efforts alone.
Starbucks
Coffee has partnered with Conservation International to work with
its farmer/suppliers in Mexico to promote water and soil conservation
and reduction of chemical fertilizers and pesticides. Home Depot
recently introduced a line of lumber products grown through
sustainable forestry practices.
Responding to
pressure from environmentalists, McDonald’s and Wendy’s
have developed more ecologically friendly packaging. At
Hewlett-Packard each product has a steward whose job is to
minimize its ecological footprint by reducing packaging, reducing
toxic materials in the product, increasing recycling, etc. By
reducing, reusing and recycling, Fetzer Wine has reduced its
garbage by 97%. It buys recycled paper, cans and glass for their
products, has switched from petroleum to biodiesel fuel, and farms its
own grapes organically.
Mistsubishi Electric American specified that their suppliers could
not provide them with paper or timber from old growth forests. Once
they set the example, almost 500 other companies followed their lead,
and together they saved four million acres of forest.
Sales of
Toyota’s popular energy-efficient hybrid car, the Prius,
climbed to 250,000 by May 2006, and the company is advancing its
research and development of plug-in hybrids which will have extended
range capacity using only the electric drive. Toyota and Menicon
Co., Ltd., Japan’s largest manufacturer of contact lenses, have
jointly developed an efficient manure composting process which helps
solve environmental problems caused by the storage of animal waste in
agricultural areas, using thermophilic bacteria and a new enzymatic
agent.
Organic
Valley (the second largest producer of organic dairy products) saw
25% growth in past few years. 45% of its profits are shared with
farmers; 45% with employees, 10% with the community. Seventh
Generation, which commands 48% of the natural household products
market, saw revenue growth of 40% in 2004.
Whole
Foods, the world’s leading natural and organic foods supermarket
recently made the largest renewable energy purchase anywhere to offset
100% of its electricity use in all 180 stores. It is purchasing more
than 458,000 megawatt-hours of renewable energy credits from wind
farms—the same environmental impact of taking 60,000 cars off the road
or planting 90,000 acres of trees. Whole Foods was ranked for nine
consecutive years by Fortune magazine as one of the “100 Best
Companies to Work For,” and CEO John MacKey says shareholders’
interests take a back seat to customers’ and workers’ interests.
Executive salaries are capped at 14 times the average worker’s pay.
Co-President Walter Robb, says, “We’re not retailers who have a
mission—we’re missionaries who retail.”
Recognizing the global importance of climate change, Coldwater
Creek, one of the fastest growing women’s clothing retailers, made
a decision recently to offset 100% of its energy consumption with
renewable energy certificates in order to dramatically decrease its
impact on the environment. Over the next three years, the company has
committed to buy more than 217,000 megawatt-hours of wind-generated
electricity. By supporting wind energy, Coldwater Creek is preventing
more than 299 million pounds of CO2 – a key greenhouse gas – from
entering the Earth’s atmosphere between now and 2009. This is the
equivalent CO2 savings of taking nearly 30,000 cars off the road for
one year. This is being accomplished through the purchase of an
innovative product known as renewable energy certificates, which are
independently audited by the non-profit Center for Resource Solutions.
Renewable energy certificates provide a means for consumers to
purchase and support wind power that is "injected" into the power grid
by renewable energy producers.
Wal-Mart
made a huge move in 2006 into organic foods, eliminating chemical
fertilizers, antibiotics, etc. Amory Lovins, co-founder of The Rocky
Mountain Institute and a world-respected pioneer in energy efficiency,
is working closely with Wal-Mart to reduce green-house gases.
Wal-Mart also pledged to run entirely on renewable energy and produce
zero net waste. It committed to double the fuel efficiency of its huge
truck fleet in 10 years – saving $300 million in fuel costs per year.
While
Wal-Mart’s track record of concern for the welfare of its employees or
the local communities where it builds is infamously dismal, its
bottom-line calculation of the profitability of these moves will
motivate other companies in similar directions. And its potential
influence on its world-wide supply chain could be far greater than
that of the U.S. government.
There are
three signs that demonstrate a company’s authentic conversion to more
enlightened practices: 1) publicly announced specific goals and
timetables; 2) buy-in at every level of the company and 3) transparent
reporting. So Wal-Mart will be closely watched.
The
sustainable business movement is one of the hopeful signs that
business, as the most powerful institution in world today, may be
transforming from within. As World Business Academy cofounder Willis
Harman remarked many years ago, “The dominant institution in any
society needs to take responsibility for the whole, as the church did
in the days of the Holy Roman Empire.” Each day, more and more
businesses are helping create a better world by becoming more socially
responsible--honoring “people, planet, profit”—the triple
bottom line. And their financial success is very convincing!
