Four years ago, the Shaklee Corporation began a ground-breaking partnership with the nonprofit Climate Neutral Network by developing a unique portfolio of carbon-offset projects that delivered both environmental and socioeconomic benefits in the communities they served. The partners aimed to create the first certification program for products, services, or enterprises that reduce and offset the greenhouse gas emissions associated with their production or operations. Now, as public interest in efforts to reduce greenhouse gas emissions heats up, the company has emerged as a leader in corporate policy on climate change. Since 2000, Shaklee’s entire enterprise carries the Climate Neutral Network’s Climate Cool label, making it the first Climate Neutral Enterprise. The company has achieved a net-zero impact on the Earth's climate, and it has proven that offsetting greenhouse gas emissions is about more than planting trees. For example, the corporation has invested in a solar electrification project in rural communities in Sri Lanka and India, offering an immediate alternative to kerosene lamps, diesel generators, and batteries -- and to the expansion of fossil-fuel-burning power plants. The company has also funded testing for the use of vented methane gas from abandoned coal mines to produce electricity, and paid for an upgrade to more energy-efficient boilers in the Portland School District.
Shaklee Corporation’s vice president of environmental, health, and safety Ken Perkins explains why all carbon-offset projects are not alike -- and offers some wisdom from the field. By Kelley Kreitz
Kelley Kreitz: How is the Shaklee Corporation’s initiative different from other carbon-offset projects?
Ken Perkins: Most companies today, especially in the multi-national oil and energy industries, primarily use carbon sequestration as their GHG mitigation strategy. However, most scientists believe that tree planting alone is an inadequate and unacceptable approach to offsetting one’s GHG deficit.
Trees take up to 40 years on average to sequester carbon. Shaklee's offset projects are unique because the Climate Neutral Network required that a majority of the offset projects (more than 60%) had to emphasize energy-efficiency and renewable-energy technologies. None of our projects involve carbon sequestration. In addition, the projects had to have measurable socioeconomic benefits as well.
A good example was our energy-efficiency project in the Portland school district. Shaklee underwrote the upgrading of oil-fired boilers to natural gas at four Portland high school and elementary schools. Reduced electricity usage from the more-efficient boiler systems resulted in reductions of GHG emissions and other environmental pollutants -- such as NOx, SOx, CO, and particulates -- as well as financial savings of more than $250,000 over the life of the project.
KK: At the outset, there was no evidence that there would be a financial return on this project. Why did the company decide to take the risk?
KP: Shaklee's senior management have always known that the fundamental success of their original business proposition was anchored around Dr. Shaklee’s “biodegradable” leadership in the 60’s and 70's and the intrinsic buy-in it created with the company’s independent sales distributors. However, they realized that times had changed. The environmental issues that consumers are concerned about today are very different than those of the 70’s, 80’s, even the 90’s. As Shaklee approached the 21st century, management saw that the most innovative and leading-edge companies were committing themselves to new environmental initiatives such as Energy Star, eco-efficiency, and sustainability. In addition, market research was showing that younger consumers were demanding products that were not only high quality and low cost but were environmentally friendly as well. So the company wanted to do something that the competition had not even thought about. Senior management came to believe that becoming the first Climate Neutral Enterprise in the U.S. would give employees a renewed sense of pride and create a unique and persuasive platform with which to educate its sales force about the new environmental problems facing Americans, such as global warming.
It’s true that the climate-neutral certification was a new and complex process, which took a tremendous amount of both employee commitment and financial investment to complete. To be first to market with a new product, service, or corporate commitment, you have to be willing to take risks even if you don’t know what the financial return will be.
KK: What are the measurable benefits of taking that risk?
KP: The company has received a number of reports that independent sales distributors throughout the U.S. have been able to attract new customers because the company is able to differentiate itself through its environmental leadership. In a recent story in the Los Angeles “Times,” a Shaklee distributor from Michigan, Ellie Rogers, recounts how she uses Shaklee’s legacy of corporate responsibility, especially the company’s status as the first Climate Neutral Enterprise, to “tap into an ever-growing base of environmentally minded consumers and ultimately increase sales.” It’s these kind of stories from across America that now convinces us that our climate-neutral investments are starting to pay valuable dividends, both in brand recognition and corporate reputation.
KK: What challenges did you face in gaining company support?
KP: Senior management at the time was not very familiar with the issue of global warming. Some thought it might be too big and too distant a problem to tackle. And they wanted to know how climate-neutral certification would benefit Shaklee’s overall business objectives: to increase sales, build brand strength and corporate reputation, and enhance business recruitment.
To answer these questions, I had to get a clear sense of was keeping senior management up late at night. I had to see how they looked at environmental issues through their tightly focused business lens. With help from the Climate Neutral Network, I was able to convert the Climate Neutral Enterprise proposal into a business strategy that addressed each of the business objectives I just mentioned. I tried to address their concerns with complete, balanced, and credible information. I learned that any time you attempt to convince others to risk the company’s resources or personal reputation on an environmental initiative, you have to identify and address all of the objections and criticisms, then refute them. This is what kept me up late at night for about six months.
KK: Should companies look to their CEOs to start environmental initiatives?
KP: Not necessarily. At least not initially. I have learned over the years that most successful environmental initiatives originated from the middle ranks of a company. It’s the middle managers, in my opinion, who are the unsung heroes of America and who have been primarily responsible for educating CEOs and senior staff about current environmental issues and opportunities for action. Sure, ultimately it’s senior management that gives an initiative the necessary financial and managerial support to make things happen, but much of the creativity, innovation, and entrepreneurial spirit that resides within a company is found within middle ranks.
KK: What was the advantage of partnering with Climate Neutral Network?
KP: The big thing that we gained from our alliance with the Climate Neutral Network was credibility. The network is a diverse group of NGOs, businesses, governments, universities, and communities. The network’s advisory board is made up of a broad spectrum of some of the most responsible and knowledge environmental experts in America. Endorsements from these groups gave our certification the credibility it needed to overcome any claims of “green washing.” Also, the network’s collaborative approach allowed us to tailor the certification around our own unique business objectives. This is critical if you’re going to get senior management buy-in, and the network has been very creative in their business thinking. Last, the network offers opportunities to build partnerships between all of its members, which can help companies deliver on their business objectives, communications goals -- a whole range of key deliverables. They’ve helped create visibility for our climate-neutral achievement and bring new partners to help extend our certification in other creative ways for the company going forward. In short, the network offers creative ideas and partnerships that are really helping Shaklee’s certification deliver bottom-line success.
KK: What recommendations do you have for other companies considering adopting carbon-offsetting initiatives?
KP: Cutting GHG emissions is, of course, a company’s first step into developing a credible climate-change strategy. For many companies this means pursuing energy-saving measures with lighting, HVAC, compressed air and motors, and so on. If a company is thinking about offsetting part or all of their remaining GHG emissions, they will have to first conduct a comprehensive inventory of GHG emissions associated with the production and delivery of their products and services. This would involve engaging all of the manufacturing, facilities, distribution, human resources, and sales folks to begin collecting that data and tracking any changes over time. Chances are that most of this data is already sitting in someone’s database.
For those that haven’t started the process, there are fortunately a number of resources and organizations that can provide assistance. For example, a copy of Shaklee’s 90-page GHG inventory evaluation can be obtained by contacting the Climate Neutral Network. There are also a number of Web sites that have carbon calculators and numerous organizations that can help a company better understand the business risks and market opportunities from implementing a climate-change strategy.(Editor's note: See GreenBiz.com's
Climate Change Resource Wizard.)
KK: What would you like to see other companies doing?
KP: Within a very broad social purpose, I believe that the problems with environmental degradation have always been, in large part, the business sector’s responsibility. No other segment of society has the resources, the organization, the will power, or the imagination to contribute to the ultimate success of climate protection and sustainability. As more and more companies come to accepts this, I believe Shaklee’s status as a Climate Neutral Enterprise will become commonplace.
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By Kelley Kreitz, a GreenBiz.com staff researcher and writer. Copyright 2002 Green Business Network, all rights reserved.
