Why Green Business is Like Teen Sex
Corporate sustainability is like teen sex.
Everybody talks about it.
Nobody does it very much.
And when they do it, they don't do it very well.
My friend and colleague Joel Makower likes to tell that joke, and it's as good a way as any to introduce Greenbiz.com's third annual State of Green Business report. The wide-ranging report was unveiled yesterday in San Francisco at a conference hosted by Makower. I won't try to summarize it; it's available free for download here, and well worth a read.
Among other things, Makower and his colleagues identify 10 green business trends -- they include radical transparency, green fleets, toxics as strategy, and the rethinking of packaging -- and they measure progress (or the lack thereof) around 20 different metrics, including carbon transparency, carbon reporting, cleantech investments and green power use.
The teen sex joke is fitting because the ratio of of talk to action in the green business arena remains high. Particularly when it comes to climate change -- now and most likely forever the No. 1 environmental issue for business, and for everyone else -- progress has been halting because of the absence of consistent government policy, at the national or global level.
Only 34 percent of the S&P500 companies have promised to reduce their carbon emissions, and some of those commitments have been modest. Greenbiz reports that 37 percent of the reductions were set at 2.5 percent or less, while nearly 15 percent didn't specify a target. That's not going to get us where we need to go. Partly that's because for many companies, the business case for voluntary action is weak.
As a senior writer at Greenbiz, I interviewed Carl Bass, the CEO of Autodesk, and moderated a couple of panels -- one on corporate carbon strategy post-Copenhagen with Christina Page of Yahoo!, Robert Parkhurst of PG&E, Sarah Skikne of The Climate Group and Holly Kaufman of Environment and Enterprise Strategies, another on the intersection of big business and cleantech with Rick Rommel of Best Buy, Kevin Surace of Serious Materials and Lynelle Cameron of Autodesk.
The most surprising moment, at least to me, came when Bass said he was occasionally discouraged by the lack of progress towards a sustainable economy. That morning, he'd said, he was on a platform waiting for the BART train to San Francisco as hundreds of cars flew by. Yep, the CEO of Autodesk, a $2-billion company, takes the subway. This shouldn't be unusual behavior but, trust me, it is.
The carbon management panel uncovered some strategic differences over offsets. Yahoo! dropped its plan to go carbon neutral last summer, choosing instead to focus on energy efficiency in its data centers. Pag said the company didn't think buying offsets was worth the money or commitment of executive time. (I'm summarizing, but that was the bottom line.) By contrast, PG&E has a Climate Smart program that, Robert explained, has signed up 700 customers who want to go carbon neutral despite the murky payoff. Sierra Nevada, for example, decided that buying offsets would score the beer company points with its customers and workers, he said.
My favorite panel explored “Green Marketing in the Age of Transparency,” again because it teased out some useful disagreements. Dara O'Rourke of GoodGuide.com talked about his effort to make GoodGuide “the world's largest and most reliable source of information on the health, environmental, and social impacts of the products in your home.” The company has an iPhone app that can be used to scan a barcode of a product and quickly find out about its health, environmental and social impact.
O'Rourke argued that consumers are increasingly eager for guidance around sustainability issues. “We have people debating bisphenol-A and debating pthalates and debating carbon in ways they didn't a few years ago,” he said.
But Wendy Cobrda, president of a marketing and research firm called Earthsense, was skeptical. She said:
Nobody wants to swim in filthy water or breathe fithy air but in your day to day life, it's very hard to think about every product you buy. Most consumers are thinking me first. My kids have to get to school. My boss needs me. If I'm not going to get an immediate benefit, it's not likely to get on my radar screen.”
I'm inclined to agree with Wendy. Much as I care about sustainability, I'm not going to use an iPhone app to analyze the social and environmental impact of, say, a can of soup when I go to the store. The health impact, maybe, but don't the nutrition labels take care of that?
The good news, also from that panel, is that big retailers and independent standard-setters may do the job better and more efficiently than hundreds of millions of consumers can. The sustainability consortium being convened by Walmart is trying to measure the life cycle of products; presumably, Walmart and other big retailers will then give preference to greener products. We also heard from UL Environment, which is developing standards around sustainability.
You can already see the impact on Walmart in the chart below, taking from the State of Green Business report. It looks at one of the bright spots -- packaging. And why has there been such a reduction in packaging? Partly because it's a way that companies can save money, and partly because Walmart has been asking urging pressuring its suppliers to reduce their packaging.
So there's encouraging news out there, if you know where to look.