The Green Business Decade in Review

Okay, I'll admit: The headline above is a bit of a come-on. I couldn't possibly do justice to the past 10 years' worth of green business activity — at least not in the following 1,500 or so words. But as we view the whatever-it's-called decade in the rearview mirror, it's tempting to assess what's transpired since the good old days of Y2K to see how far we've come — and how far we haven't. So, let's do that.

First, the good news: The greening of mainstream business has continued apace since the clock struck 2000, growing continually more rapidly as the decade wore on, even amid a Great Recession. The idea of green companies appears to have extended into the next concentric circle, beyond the true-blue, values-driven companies and the next tier of large leadership companies, to a third tier of companies that hadn't previously been concerned about global warming or other environmental issues. Today, it's hard to find a sizable company that isn't talking the talk and, to some degree, walking the walk. Trying to be seen as green is now more the rule than the exception.

The bar keeps rising, too: What seemed cutting-edge 10 years ago — carbon neutral products and companies, zero-waste factories, green chemistry, life-cycle analysis, green buildings — is now mainstream, or at least warrants a so-what? response when trumpeted by companies. Things that used to make headlines — or, at least, good promotional copy — are now business as usual.

And each year brings about a succession of whodathunk moments: Big-bad retailers committing to green up their supply chains, big-bad auto companies committing to transforming their products and manufacturing processes, big-bad packaged goods manufacturers launching green product lines, big-bad computer makers dramatically improving energy efficiency and recyclability, big-bad food processors and fast-food chains committing to sustainable sourcing, big-bad utilities committing to energy efficiency and renewables, and many other companies — big-bad and otherwise — announcing goals, partnerships, or achievements that wouldn't have seemed likely not that long ago.

Now, the big-bad news: Most companies are engaged in green business activities in only the most superficial ways, addressing just a small portion of their operations and impacts. Few have looked holistically at what they do from an environmental perspective, let alone made bold, audacious commitments to reduce their impacts or transform their products and processes to embrace a new green ethic. While more companies are engaged than ever before, their collective efforts are barely scratching the surface.

(On February 4, my colleagues and I at GreenBiz.com will issue our third annual State of Green Business report with specific measures of progress, or lack thereof. The report will debut at two State of Green Business Forums, in San Francisco and Chicago.)

So, while there is much to celebrate at the dawn of a new decade, there is a nagging feeling that much of this amounts to a false sense of hope — that all of this good news may be too little, too late. But maybe not.

In that decidedly indecisive context, here are three reasons why I'm discouraged, and three reasons that I have great hope for the decade ahead.

1. We're not moving the needle. As I said, the sum total of all this green business activity hasn't changed things much. Most global environmental indicators continue to head in the wrong direction. And where progress is evident, it isn't taking place at the scale and speed needed to address climate, water, air quality, toxicity, food security, biodiversity, and land-use challenges, among others. Even in developed economies like the U.S. and Europe, key indicators of progress — for example, the amount of energy and water consumed or waste and pollution emitted per unit of gross domestic product — has only mildly improved. In fast-growing developing economies — China, India, Southeast Asia, Latin America, and others — the story, in terms of consumption and emissions trends, is frightening.

2. The public still isn't getting it. There's little sense of urgency, and for good reason: Most people on the planet are focused like a laser on getting through the day — feeding and sheltering their families, staying alive and well, finding work, maintaining basic human dignities — and have little time or interest in protecting the commons. Meanwhile, the "haves" are largely focused on keeping what they've amassed, if not adding to it, and generally can't be bothered with the greater good. Most individuals have little understanding of the environmental impact of their lives, content to make a few simple, largely symbolic changes in their shopping or personal habits. As a result, consumer pressure on companies to transform their products and processes is relatively meek. Yes, there is a growing cadre of citizens concerned about the climate and other planetary ills, and a new generation entering the marketplace with a greater green ethic, but their power to effect change to date has been tepid at best.

3. There's little sense of urgency. In generations past, people took to the streets to protest wholesale injustices and inequities and, in the process, helped bring about sweeping changes, from the U.S. to the U.S.S.R. These masses were supported by political and business leaders who saw great opportunity in dramatic change, for both themselves and society in general. So, where are the masses marching in the streets demanding action on climate change in the name of future generations? Where is the anger over inaction on energy and climate issues — arguably among the greatest civil and human rights issues we've ever faced? Where is the bandwagon of consumer boycotts and shareholder actions forcing companies to respond? Where are the politicians expending their political capital fighting barriers to a green economy? Why aren't the threats to our security — food security, housing security, water security, energy security, national security — fomenting scores of green Manhattan and Apollo projects? Yes, there are encouraging examples of all of these things, but they are happening much too slowly and don't seem to be making much headway.

So much for the bad news. Amid all this, I'm encouraged, excited even, about where business is headed.

1. Green innovation is booming. There's a revolution taking place that even many of its participants can't yet see. It involves the confluence of energy, information, building, and vehicle technologies, and the promise of a wealth of impressive new goods and services. Some of these will be seen this decade in the emergence of the so-called smart grid, in which everything from appliances to automobiles are connected via two-way, always-on connections, enabling not just better management of energy resources, but an array of new capabilities that improve people's lives while reducing their impacts. These things may not be overtly marketed as "green," but much like the iPod and iTunes, they stand to transform how we live, work, drive, and play in ways that we can't yet imagine, while vastly reducing materials and energy needs. All of this will help to transform how companies think about what they do, leading to, among other things, closed-loop systems of commerce. And it's not just about technology. Innovations in food production, apparel and footwear manufacturing, and many other industrial processes and feedstocks are advancing faster than most people recognize.

2. Companies are reinventing themselves. Largely as a result of these innovations, companies will continue to find themselves crossing sectoral lines and entering new lines of business. I wrote in 2006 about the "new energy companies," old-line companies like chemical manufacturers, auto makers, IT companies, and food processors that have found themselves in the energy business. That trend has accelerated as the aforementioned technological convergence takes shape. So, too, with green building, as I noted recently: a new wave of old-line companies (think Firestone and Sanyo) are now in that sector, too. Each of these players brings new energy and momentum to the green business arena. Meanwhile, early-stage companies are getting out of the lab and off the ground, invigorated by capital flows that, while recently slowed, are beginning to rebound. Slowly but surely, some of these innovators are going public or are being swallowed by bigger fish, extending their capabilities and reach.

3. Sustainability is becoming about more than just the environment. This is long overdue. One of the more frustrating trends of the past decade was the conflating of "green" with "sustainability." The latter, of course, means much more than environmental responsibility, though you wouldn't know that listening to most corporate marketers and PR firms, which treated the two terms as one and the same. But that's changing. The social side of sustainability — a broad swath of topics including working conditions, community impacts, human rights, product safety, access to education and health care, increased opportunity for all, and more — is beginning to be considered by some large companies. It is showing up in corporate "responsibility" reports, of course, but also in the design and delivery of products and services for the poor, both in developed and developing countries. It is showing up in corporate concerns over obesity, product safety, access to clean water, and dozens of other things. Some of the companies involved were dragged to these issues by activists, but that's how many of today's environmental leaders were born — companies like Nike, McDonald's, Starbucks, Home Depot, and others. To be sure, the social side of sustainability remains early-stage, but the trends are encouraging.

At the end of the day — and the decade — how does all of this stack up? I won't venture to say. There are too many unknowables that could help or hinder the shift to greener companies and economies: the vagaries of world economics, rapid technological developments, dramatic political shifts, fast-emerging impacts of climate change, roller-coaster oil prices, natural disasters, populist movements, and many others.

One thing is certain about the green business decade before us: It will be at least as interesting as the one just passed. Whether that's a good thing or not remains to be seen.

Joel Makower is Executive Editor of GreenBiz.com and co-founder and chaiman of Greener World Media, Inc.