The State of Green Business 2010: Alive and Kicking

Editor's Note: To celebrate the launch of the third annual State of Green Business report, we will be highlighting over the next two weeks the 10 big trends that are shaping the future of the greening of mainstream business. You can download the report for free here, and read all 10 trends on GreenBiz.com.

"We're still here."

That may seem as fitting an epitaph as any for 2009, at least for most green business professionals.

It was a year that began with doom and gloom and ended on only a slightly more upbeat note. In between, the banks and the auto industry nearly collapsed, restaurants and retailers were shuttered, and those who managed to survive their employer's downsizing often received what is euphemistically called a "haircut" -- a reduction in pay, a loss of benefits, involuntary time off, or all of the above.

Amid all this was something notable -- something that made this economic downturn distinct from all the others we've seen over the past quarter century: Green professionals weren't among the first to be thrown overboard. True, their budgets were slashed, their headcounts frozen, all while their mandates sometimes increased. But they managed to survive, even thrive, during tough times. That's a sea change. And as the clock struck a new decade, many stood up, dusted themselves off, and exclaimed, sometimes with more than a little surprise: "We're still here."

Their survival is testament to how the greening of business has transformed in the past few years. What began as a seemingly altruistic endeavor, then shifted to a way to cut costs and improve reputation, has become a fundamental business competency, alongside accounting, finance, human resources, marketing, customer service, procurement, knowledge management and others. Indeed, in some firms, green thinking is becoming embedded in each of these other disciplines, increasingly woven into the corporate fabric. That has made green strategy and practices ever more valued, seen by top brass as a way to cut costs, improve operations, foster innovation, engage employees and satisfy customers -- all critical during tough economic times.

The result was that for some companies, environmental improvements and innovations became a means of surviving lean times, and being more competitive once things rebound.

So much for the high-level view. How did all this play out during 2009? To make sense of the year just passed, we combed nearly 2,400 news stories, blog posts, opinion pieces, resource reviews and podcasts published during 2009 on our five websites -- GreenBiz.com, ClimateBiz.com, GreenerBuildings.com, GreenerComputing.com and GreenerDesign.com -- in search of trends and themes. We will be presenting our top ten trends in green business for 2009 over the course of the next two weeks, in no particular order.

Radical Transparency Goes Mainstream

Green consumerism finally seems to be catching up to the Information Age. In recent months, a confluence of trends has brought more information about more products and companies to more people than ever before. Everyone from Washington to Walmart is demanding companies provide more information about the environmental (and health and social) impacts of what they do, and much of the information that results is being made public.

"Radical transparency" -- referring to the virtuous circle that develops when detailed information about companies, products and ingredients is instantly available, enabling consumers to make smarter choices, thereby moving markets toward less-harmful products -- comes in many forms. Some of it is born of social networking, a new generation of blogs, widgets, websites and apps made available to the tweet-and-text generation. This includes websites like
GoodGuide.com and HealthyStuff.org, along with their respective mobile applications that enable shoppers to get the sustainability backstory on products and companies while in the aisles.

But that's just the beginning. Detailed information about companies and products are coming from nonprofits, like the Interfaith Center on Corporate Responsibility and Climate Counts, both of which rate companies on their commitments and performance on climate change. It's coming from the mainstream media -- Newsweek, for example -- which is finding an avid readership for company ratings. It's also coming from the companies themselves -- sometimes voluntarily, sometimes not. Over the past year, Apple, Clorox and SC Johnson all agreed to fully disclose product ingredients. Pressure to do this came from activists, Congress, even lawsuits.

{related_content}And then there is Walmart. The retail giant placed a superstore-sized stake in the ground when it launched a Sustainability Index in 2009. The multi-phased project began with a questionnaire sent to thousands of its suppliers asking 15 questions in four categories: energy and climate, material efficiency, natural resources and "people and community." Though the questions were relatively simple and did not delve very deeply into suppliers' practices, its mere introduction sent both cheers and jeers through Walmart's stakeholder community, as nearly everyone tried to understand the initiative's impacts and implications.

The Sustainability Index is just the beginning. Walmart also announced an even more ambitious effort to create lifecycle-based standards for thousands of its products. To do that, it seed-funded a Sustainability Consortium, a group of academics and other experts charged with creating the metrics and, eventually, the standards by which products will be evaluated. The group has a monstrous task to do and it is unclear when its work will ever be seen on retail shelves. Even Walmart admitted that it was taking a long view of the project and that it found itself in uncharted territory: "Not only do we not have it all figured out, we don't want to have it all figured out right now, that's why we're working with all of you," as one Walmart executive explained to participants in a GreenBiz.com webcast.

There's more to come in the transparency arena, thanks to a new generation of environmental standard-setting and verification organizations that have launched new initiatives. They include established, name-brand players: Green Seal, which launched a company certification effort that aims to measure, verify and push for continuous improvement of a company's entire operations; the Good Housekeeping Institute, which launched a green version of its venerable Good Housekeeping Seal of Approval; and Underwriters Laboratories, the 115-year-old testing and certification icon whose "UL" logo is synonymous with product safety, which launched an environmental spin-off to provide independent green claims validation, product certification, standards development and other services. The U.S. Federal Trade Commission, which has been holding hearings on green marketing claims for more than two years, may eventually weigh in -- or not.

Where all this is going remains to be seen -- the websites, the activists, the voluntary disclosures, the Sustainability Index, the new ratings groups, the feds and all the rest. One thing remains clear: The amount of information about products and companies is about to grow exponentially. Whether all these data lead to increased awareness or increased confusion on the part of consumers is an open question.

Tomorrow: Green Marketing Gets Even Murkier