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How to Navigate the Green Seas
Published October 16, 2008
And if you look at the surveys, consumers have been telling us for, well, 20 years that they want to buy green products from so-called good companies. But it's actually the B2B world that's driving the changes far more so because businesses are setting standards in their supply chains.
Look, when a Wal-Mart says, "We want to get rid of unconcentrated detergents to these condensed 2X kinds of versions," nobody says, "Why?"
Ironically, this was tried in the early '90s and the consumers rejected it. Procter and Gamble is one company that tried to create a condensed concentrated detergent and put the same amount in half the size. You had consumers sit there and say, "O.K. There's a 64-ounce bottle and 128-ounce bottle, and they both cost the same" -- never minding the fact that they actually do the same number of loads. "I want the bigger bottle."
And so, even though it's heavier to carry home, people rejected those and it wasn't until Wal-Mart came along and said, "O.K., we're no longer going to sell the bigger bottle. We only want the small concentrated version," that the entire industry had to change.
And we're seeing that not just with retail, but with lots of companies that are saying, "We don't want those other products anymore. We don't want the raw materials that are polluting, that are over-packaged."
General Motors recently committed to having 80 plants around the world that throw away zero waste, (with) nothing going to landfill. Most of it gets recycled, and a little bit of it goes to waste-to-energy. They already have 14 plants worldwide that have already achieved that. That sends tremendous change down the supply chain as companies have to say, "O.K, we can't package things anymore the way we packaged them because it's disposable packaging."
Here's just one example of the savings: GM has basically eliminated wooden shipping palates from their supply chain because they're a one-way, one-time use disposable. They're throwing away hundreds of thousands of them a day. And by doing so, General Motors is saving $100,000 in disposal fees and earning $50,000 re-selling the corrugated cardboard pallets that have replaced them -- saving $100,000 and earning $50,000 every business day.
So once you've done that, why would you do business any way different? That speaks far more than consumers whims, where they say they want to change, but only on the condition that I want to buy the greener product as long as it doesn't mean I have to pay any more, suffer any inconvenience or go out of my way in the slightest. That's a much tougher bunch of hurdles in which to clear.
TH: Now, I've heard you say quite a bit in the past that one of the most frequent questions you get asked is: How good is good enough? What does that mean, and what is you answer to that, and how has your answer changed over the years?
JM: Well, this is a problem that we don't have real standards for what a green business is. If you start with the assumption that the market for any trend or technology or transformation requires some kind of norms and standards - whether they're legal ones or voluntary ones or just cultural ones. We don't have that here, and so that's causing companies to try and figure this out.
How do we know how good we have to be? I actually hear from companies asking me that question: "How good do we have to be?" And it sort of reminds me, my father was a dentist and some of his patients used to occasionally ask him, "Do I need to floss all my teeth?" To which he answered, "Only the ones you want to keep."
But how green do we have to be? Well, ideally you have to try and do everything right to some extent, but there's no standards and the market isn't telling you that. And consumers and even B2B customers aren't necessarily telling you here is the mark you have to pass or the hurdle you have to clear. So until we have those kinds of standards, it's really companies (that) are grappling with this. You end up with situations -- this paradox in which when you talk about what you're doing right, you often illuminate problems that the public didn't know you had.
"Oh, really, you're using 2 percent organic cotton now? Why? Oh, well, really I didn't realize that cotton was such a pesticide-intensive industry. That's incredible implications for groundwater run-off, and worker health and safety and the birds in the trees. Why are you only (using) 2 percent? Why aren't you doing 5 percent? You know, we're going to do campus boycotts until you commit to 10 percent organic cotton."
That's the challenge companies often face in thinking about, well, how good do we have to be?
TH: Well, that sort of touches on one of your previous points: greenwash versus greenmuting. Which do you think is a bigger concern?
JM: Well, greenwashing is a bigger challenge to companies. Greenmuting is a bigger challenge to society. When you talk about things that are accused of greenwash -- and these days that term is thrown around willy-nilly -- it's sort of guilty-until-proven-innocent. And particularly, if you're a big company, anything you do, any green claim you make is automatically assumed to be greenwash until somehow proven otherwise.
That's a problem for you as a company right now, although some companies just blow through that and say, "Look, does it matter what people say? We're committed to this and we're going to do this in either case."
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