Green in Spite of Ourselves
Green in Spite of Ourselves
[Editor's note: In this exclusive excerpt from Joel Makower's new book, "Strategies for the Green Economy,"he describes one of the many ironies of green marketing. You can read a previous excerpt here.]
One irony of the green economy is that over the past two decades, while consumers have expressed both an ambivalence toward changing their shopping habits and cynicism about companies' sincerity in being more environmentally responsible, the products we've been buying have gotten greener, often unbeknownst to the public. In many cases these environmentally improved products make no green claims at all.
The reason: Companies in nearly every sector are continually improving their efficiency, engineering waste, inefficiency, and toxicity out of their manufacturing and distribution processes. Many companies have learned how to deliver products and their functionality using far fewer resources; a few have upended their business models in the name of resource efficiency and enhanced productivity. They do these things partly because of the reduced environmental impact but largely because they make good business sense.
Companies that pollute are inefficient. Simply put, waste and emissions represent things that a company bought but which had no direct value to the customer and for which a company may have had to pay to get rid of. In other words, it's lost profit. Thus it's not surprising that in an age of globalization, in which companies are competing to be the hyperefficient, low-cost provider of goods and services, one by-product would be a reduction in their emissions and waste.
Consider five somewhat random of examples of what companies have done:
* Anheuser-Busch developed an aluminum can that is 33 percent lighter. This reduced use of aluminum, combined with an overall recycling plan, saves the company $200 million a year.
* Thanks to a smaller box used for about half the phones sold by Nokia during 2006–2007, the company saved $150 million in packaging and transportation costs related to packaging. The packaging is also made of 100 percent recycled paper.
* Over the past decade, Procter & Gamble, the giant consumer products company, has reduced the weight of its Pampers disposable diapers by about 40 percent and their packaging by 80 percent while improving their performance (measured in terms of their ability to retain moisture and reducing diaper rash) along the way. Meanwhile, Pampers has become P&G's largest brand with more than $7 billion a year in sales.
* General Motors has made a concerted effort to eliminate manufacturing waste in its assembly plants. In the mid–1990s, it set out to reduce or eliminate the 86 pounds of packaging waste that resulted from building the average car, managing to reduce it to a pound or less in some facilities. Eight of its North American assembly plants and 14 plants globally send no waste to landfills.
* McDonald's eliminated the embossed golden arches on its napkins, making them 24 percent thinner. That freed up shipping space by the equivalent of roughly 100 tractor-trailers a year.
What's spurring these efficiency efforts? The motivations invariably include cost savings, reduced liabilities, improved community relations, and enhanced corporate image -- all valuable commodities for companies. Yet none of these efforts can be found on a product label, brochure, hang tag, or advertisement. Which makes good sense. Should Anheuser-Busch's profitable aluminum-saving effort result in an eco-label on cans of Busch and Bud? Does GM's zero-waste factories yield a greener Yukon SUV? Should Big Macs be included on a list of environmentally preferable products because of less-wasteful napkins?
In all cases, of course, the answer is "probably not." And yet most of these companies' efforts -- which represent only a tiny fraction of similar waste-reduction and efficiency-enhancing measures I've heard about over the past 20 years -- arguably yield significant environmental benefits, possibly far more than some of the green-labeled trash bags, cleaning products, and recycled paper goods hyped as being better for the planet.
Here are a few more interesting facts about big companies, current as of early 2008:
* Wal-Mart and Nike are the world's largest buyers of organic cotton.
* General Motors is the world's largest user of landfill gas to generate electricity.
* Intel and Pepsico are the two largest corporate buyers of renewable energy.
* Starbucks is one of the world's largest buyers of fair-trade coffee.
* Home Depot is the largest buyer in the United States of wood certified by the Forest Stewardship Council to be sustainably harvested.
* McDonald's is one of the largest buyers of recycled products, committing to spending at least $100 million a year on recycled products and materials.
Again, none of these facts is meant to suggest that the companies named are "green" or even "good." In most cases, the achievement in question represents a token percentage -- of, say, GM's energy use or Starbuck's overall coffee purchases. But it is an achievement nonetheless -- one that no doubt each of these companies would love to trumpet, if only it believed it could do so without risking a backlash from consumers or activists complaining that it isn't good enough. And it probably isn't, as impressive and surprising as some of these achievements may be.
All this adds complexity for consumers. Should an eco-conscious shopper consider individual products, or can he or she have more impact by seeking out companies with exemplary environmental records, even though not all these companies' products may be seen as green? Is there even any way to determine the greenest companies? Who should decide, and on what basis?
Companies aren't necessarily waiting for consumers or activists to figure this out. They're forging ahead, regardless of whether their efforts receive the attention they're due. After all, there's profitability in all that efficiency.
Joel Makower is executive editor of GreenBiz.com. Excerpted with permission from Strategies for the Green Economy, by Joel Makower, published by McGraw Hill. © 2008 Joel Makower.