Business + Sustainability

I remember reading Ecology of Commerce laying on the grass in front of my house when I was 17, awed by the possibility that business could actually be good for the environment. Exxon was still mired in a costly legal battle over the Valdez oil spill while Prince William Sound was mired in a clean-up effort. At the time the notion was radical: everybody knew that economics and environment mixed like water and oil. Apparently I wasn’t the only one who discovered a new possibility in the book.

Last week I wrote about the Green Company Leaders who proved the market and developed early sustainability standards for business. This week’s part of the mini-series entitled Business + Sustainability 101 covers the Industry Titans that followed.

Industry Titans

In the deep south in the early 1990’s a carpet company little known beyond its market rose as the first Titan. Ray Anderson, president and CEO of Interface also read the Ecology of Commerce and for him it was personal. According to Anderson’s TED Talk, Interface was specifically called out by author Paul Hawkin as a “plunderer of the earth”. He floored company executives when he decided to turn the claim on its head and begin the ascent of what he called Mt. Sustainability.

A much more public pressure prodded Nike and Walmart to begin their sustainability journey. Toward the end of the 1990’s the apparel industry was under public scrutiny and outcry for labor practices of its supply chain and Nike garnered much of the attention. A small team was tasked with evaluating social and sustainability practices of the company to make sure something like the withering attacks never happened again.

In the middle of the last decade, pressure on Walmart mounted from an increasingly organized cadre of environmental NGO’s and labor groups. Walmart eventually tired of fighting the accusations of poor working conditions and environmental degradation and decided to try a more proactive approach by announcing its first sustainability commitments in a 2006 Fortune Magazine cover article.

Many more companies launched sustainability initiatives in their own ways. GE created the “treasure hunt” to identify energy efficiency projects. Coke and Pepsi discovered a new form of competition in sustainability and tried to outdo each other with greener products and waste, carbon, and energy reductions.  Manufacturing behemoths Alcoa and Dow plowed full steam into reducing carbon, energy, and water intensity of their products and Ford built the largest green manufacturing facility of its time.

Some initial commitments were too bold for the time. BP shocked the oil industry as the first major oil company to publicly acknowledge climate change. It launched a very aggressive campaign to move Beyond Petroleum, which it abandoned several years ago (and went Back to Petroleum?). In the mid 2000’s, Dell announced it would become carbon neutral and retracted this past year.

Successful Titans find ways to leverage sustainability for competitive advantage. Interface is #1 in the industry and cut greenhouse gas emissions 82% while doubling profits since sustainability became a goal of the company. Nike tied sustainability to its innovation process and discovered it could drive significant breakthroughs and performance benefits.  GE’s Ecomagination program claims $18B of its revenues are generated from the eco-friendly portfolio. Walmart plans to save hundreds of millions of dollars by squeezing inefficiencies from its operations and supply chain.

These are bold moves and radical departures from the mindset of business even ten years ago. And yet carbon keeps rising, biodiversity keeps falling, ecosystems are in decline, and species are lost. We have known about many environmental problems for decades but recent science suggests the ecological challenge me be even bigger than we think. Even given these initial efforts by Green Company Leaders and Titans, the response of business may have to be bigger than we think.

Next in series: The Ecological Challenges