This article first appeared at Shelton Insights and is reprinted with permission.
One of the interesting challenges of running a marketing firm entirely focused in sustainability is that our clients define the spectrum of sustainability in very different ways (as do Americans, incidentally). Some utilities have been reticent to hire us for fear that we're "environmental advocates," while some consumer packaged goods companies have asked, "Don't you guys just work in energy?"
The truth is it's all sustainability. But I rarely see utility employees at conferences focused on sustainability, and I never see a CPG representative at a conference focused on dealing with energy issues.
That's one thing I enjoy so much about the Fortune Brainstorm Green conference. It takes on the whole mix: how to motivate adoption of renewables, energy efficiency and plug-in hybrids; how to solve the looming water and food crisis; how to deal with chemicals of concern; and overall, how to meet the needs of an ever-growing, demanding population without compromising profits and the world's finite resources.
I've included a few interesting takeaways (below), but what was generally missing in this year's program were new success stories. It may be that most companies who are really working to solve energy, water, waste and chemistry problems have already done (and reported on) the easy stuff, and now we're slogging through the time-consuming, not-so-sexy, hard work that has to happen before the next successes can occur. Or maybe the solutions are not so forthcoming on our own, and that's why we're doing a lot of talking and collaborating instead of sitting back and listening to the splashy success stories of breakout "superstars" who've "figured it out" for us.
We'll see what we hear at Sustainable Brands in two weeks. In the meantime, here are a few things I walked away with.
The solar industry doesn't need the Sierra Club. There was a very interesting point/counterpoint discussion between Michael Brune, executive director of the Sierra Club, and Michael Shellenberger, president of the Breakthrough Institute. It appears the two men are/were friends, and Shellenberger was practically doing an on-stage intervention with Brune, begging him to stop embarrassing himself by being so quixotically focused on supporting only solar and wind as the way forward, without consideration at all for natural gas in the short term and nuclear in the long term. Based on other panel discussions (and what we're seeing in market data), renewables are doing really, really well and will continue to do well. So perhaps it's time for the Sierra Club to focus its considerable energy on another fight.
A few progressive utility executives really are starting to figure out a future where distributed energy is the norm. David Crane, president and CEO of NRG, earned a lot of buzz earlier this year with his "Jerry Maguire-style" letter on GreenBiz.com about what the future should hold, and how NRG will respond to it (essentially enabling — and profiting from — customer generation). He continued in the same vein at the conference, saying something like, "Ninety-eight percent of our revenue today comes from the grid, but we're betting big on off-the-grid technology." Based on this and one-on-one conversations I had with folks at extremely large technology companies who referred to the grid as a "back-up" vs. a primary way of getting power, all utility execs would be wise to follow Crane's lead.
If we don't define "value," we won't see a lot of progress in sustainability. There aren't many hard numbers around the value of sustainability, specifically in three key areas. The incremental revenue/profit resulting from employees who are engaged in sustainability efforts is still a mystery. We also need to take into account the dollars and cents associated with the social impacts of sustainability and the potential profitability associated with curbing the negative impacts of climate change.
Plus, sustainability reporting is typically done separately vs. being integrated into annual reports and financial statements. And while CEO compensation packages always include bonuses associated with profitability or revenue growth, they rarely include incentives related to the bullets above. If we don't define what value looks like and begin measuring it, we won't really see sustainability become the norm.
Walmart is rolling out organics at conventional price points. That's one of the huge advantages to its scale. We know, from our ongoing polling of Americans, that its typical customer is very worried about what to feed the kids and feels very angry/guilty/conflicted about not being able to afford organic food. So this is truly a home run in terms of meeting a market need.
Michael Dell delivered a hell of a presentation on packaging. His company has figured out how to replace the plastic cushioning inside packages with mushrooms; make the exterior package out of bamboo; and make the plastic sleeves for components without petrochemicals but instead from carbon sourced from the air! I have no idea how that's possible, but the notion is super-cool, and Dell delivered all this innovation in a very relatable, grounded way. When asked, "Doesn't all this add a price premium?" Dell responded, "We don't sit around making up ways to make our products more expensive … so, no, we've found a way to do this without increasing costs and, in fact, some of this is reducing our costs."
So maybe I can take back part of my early moaning. I would say Dell was actually the standout at this conference, in terms of sharing something real and tangible it has committed to that will move sustainability further toward the norm. And presuming Walmart is getting the price down on organics in a way that still allows farmers to earn a fair wage, I'd give it a big pat on the back, too. Hopefully, we'll see next year that these bold commitments have inspired more companies to do the same.
Light bulb image by Chones via Shutterstock.